ANDREW BIRD – FINTECH INVESTING
Speaking at IMAP’s 2017 InvestTech conference, Andrew Bird, a serial fintech investor, highlights his journey in running a fintech before becoming a full-time investor.
Bird unknowingly started his own fintech in 1997. It was called Aspect Financial and produced independent equity information for self- directed investors, offering an alternative to full service brokerages. After a merger and selling his fintech off and running it at Morningstar, Bird decided to become a full time (angel) investor in 2010, with roughly 25% of all investments put into fintechs.
To this day, Bird has invested in some very successful companies including Sharesight, an award- winning cloud investment portfolio system that tracks thousands of self- directed and corporate investors and LegalVison, an online commercial law firm that delivers cost-effective legal solutions for businesses.
To be a successful fintech investor you must be contrarian and be right, states Bird. You have to pick out companies before they become successful, like Google. If you are buying the stock after the company has performed exceptionally then you are still paying a premium price for it even though the company stock is likely to continue rising.
Being able to manage risk is another massive aspect of being a fintech investor.
“You are going to make mistakes,” says Bird.
Investing in fintechs with a partner is a smart move as it allows for you to not get caught up in your own biases. Being cautious as to not spread your investments out too widely is another. Bird states that investing in fintechs are more like options than stock – approximately 60% fail. You want to be able to not run out of funds so that you can keep investing in the 40%.
The third piece of advice that Bird has provided is to avoid corporate venture capitalist. A corporate is rarely a compatible investor as employees get transferred between divisions all the time and once someone who supported your idea gets transferred away their replacement is not likely to be as willing to fund your idea.
When Bird is searching for the next successful fintech, he focuses on self- directed investors.
“This is everyone without a defined benefit scheme,” states Bird.
Bird takes a particular interest in ‘hobbyist investors.’ These are people who enjoying tinkering their own portfolios and are the early adopters of fintech.