An Interview with a Crowdcube investor

Following on from the last Proud of Our Crowd blog, we now have an interesting insight into the world of crowdfunding with our next spotlighted investor.

joanna-wittJoanna Witt is a freelance journalist living in London. Her main areas of interest include entrepreneurs/start-ups, careers, and media and digital marketing. Having worked for a number of large media organisations including the BBC and the Guardian, she’s now self employed and looking to balance her career with looking after her three sons age 3, 4 and 6. Passionate about flexible working, Joanna also runs a blog for working parents called Panorama Road, and is keen to diversify her income streams by choosing a portfolio career encompassing a range of different activities.

What interests you about crowdfunding?

“I’ve always wanted to start my own business but I haven’t yet had an idea that I think will actually make money! Investing in crowdfunding is my way of getting some of the buzz of being involved from the start of a business and watching that business grow. Having decided to work for myself, investing is also a way of diversifying my possible income streams. I’m very keen to work flexibly as I have three small children, so for me, investing is something I can do alongside freelance work – although I’m very aware that it’s a risky path to take!”

What do you look for before investing in a business?

“For me it’s all about the idea. I’ve got to love it and naturally think it will work. I tend to look for something a bit novel, something that really gets me excited. I also like start-ups as it feels like you’re able to make a real difference, rather than simply contributing to another round of funding for a more established brand. I have quite a mix of investments, from clothing to finance to e-commerce. I also take a good look at the numbers and the founders. If the CEO has a decent track record you are perhaps more confident that they can replicate that success.”

Is there one element of the pitch that you value above the others?

“For me it’s a clear exit strategy and time scale for the return on investment. Of course all the other elements are important, you have to like the product, you must have faith in the founders and agree with the valuation, but I think a clear exit strategy helps you understand the founders’ intentions and how likely you feel the company is to hit its targets.”

What has been your experience with investing so far?

“I started investing in 2015 when someone I had worked with emailed me about their pitch. I decided to invest as I knew them and liked the concept of their magazine. Since then I have invested in a coffee chain that opened near my office, an e-commerce business that I have used before, a travel start-up, a lighting brand, a couple of financial start-ups as well as Crowdcube itself. I have faith in all of them. Some update you more than others, but I’m looking forward to the moment when each company’s prospects become clear and I’ll be able to see which ones (if any) I make a return. Obviously the dream is to re-invest and continue supporting new businesses.”

Have you talked directly to any of the companies, and if so, has this been valuable in your decision whether or not to invest?

“I have been involved in a number of forums and have always been impressed by how quickly and comprehensively founders reply. I think these forums are invaluable in making the decision whether or not to invest, as it also allows you to see any issues that other would-be investors are having, which may or may not ring alarm bells for you. At the end of the day you must have faith in the ability of the founders – however good the idea they will ultimately make or break the business.”

What advice would you give to fellow investors looking to invest?

“Be prepared to lose it all. You hear this all the time, you tick boxes saying you understand it, but you really really have to put this money aside, forget about it and be prepared to lose it all. I once tried trading on Selftrade but I was terrible at it, and lost money. It’s always a hard lesson, but I think the important thing is to almost treat it as a hobby. Diversify so you’re not investing all your capital on one business and choose businesses you’re genuinely excited by. Chances are if you rate the business, other people will too.”

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We would love to hear from investors on Crowdcube, so if you would like to share your story with the crowd, please contact us by filling in your details here.