Small businesses in Britain can’t succeed without retail investors, and it’s time women got involved, says Melissa Sturgess, CEO of Ananda Developments

At a time when Keir Starmer is promising to build a Britain that works for everyone, and Chancellor Rachel Reeves continues this theme in her speeches, those of us working to actually build small businesses into bigger ones are facing daily challenges .

We fight to attract investors, we fight through layers of red tape and we strive to deliver innovative products that can make life better for everyone.

But despite these efforts, one truth remains: we need private investors to succeed.

Those of us who have set up small businesses and listed them on the London stock exchanges – whether that’s the LSE, AIM or the Aquis Stock Exchange – are natural optimists. We don’t take ‘no’ for an answer and are committed to delivering value for our shareholders. Yet small businesses are often overlooked, underanalyzed and dismissed. There are always risks involved; After all, without these resources, great returns are not possible.

But with so much capital flowing into index funds, many exciting opportunities in smaller publicly traded companies are being ignored. There is one upside: the current malaise has led to valuation anomalies that are unrelated to the company’s fundamentals: bargains, in other words.

Warren Buffet famously said that if you believe in a company, a lower stock price should be taken as a signal to buy more and not walk away. Investors should look at smaller companies the same way.

In fact, small cap investors have an added advantage: the ability to connect directly with company management and actively participate in the company’s journey. This level of involvement not only provides financial returns, but also a sense of personal investment in a company’s success.

So how do you learn to invest? The same way you learn to trust someone – by doing it. There are plenty of online share trading platforms in the UK that make investing simple, safe and affordable. You don’t need thousands of dollars to get started. You can participate in the game for just €100. The key is to take that first step, and experience will teach you the rest.

If we don’t start supporting small businesses, helping them grow and do important work, who will? We cannot rely on pension funds; they long ago lost their ability to support small businesses. We also cannot count on larger funds, which seem to have lost interest in supporting entrepreneurs in the listed business space. The support for small businesses must come from us, from individual investors determined to see Britain regain its place as a powerhouse of innovation and success.

Reforms to simplify stock investing are long overdue. Such changes would not only benefit individual investors, but also provide growth companies with broader access to capital. Unfortunately, today’s enterprising companies face the looming threat of tax reform – such as changes to the estate tax – that could have the opposite effect. To compound their challenges, these companies are increasingly marginalized on stock trading platforms.

It’s no surprise that small companies are exiting the market in large numbers, with many considering a move to the US, where investors are more focused on supporting growth.

And it doesn’t stop there. The next generation of unicorns will remain private longer, allowing private equity and venture capital to capture growth and value appreciation at an early stage, leaving private investors with fewer opportunities after the IPO.

That said, improving access to investment opportunities is only part of the challenge. Another crucial step is encouraging more women to become investors, especially in listed small-cap companies. There’s a lot of talk about why women don’t invest in stocks, and a common reason is a lack of confidence. The solution? Start with what you know. Invest in companies that sell products or services that you use and believe in. I don’t recommend betting your retirement money on small caps, but most of us can afford a small amount to dip our toes in the market.

As CEO of Ananda Developments, which is conducting clinical trials for a CBD-based drug to treat chemotherapy-induced pain and endometriosis, I hear from male investors all the time. I receive daily WhatsApp messages from a group of 75 male investors trading in Ananda shares, constantly asking me about endometriosis research.

Yet I can count on one hand the number of female investors who reach out, despite the fact that endometriosis affects 1 in 10 women worldwide. Where are the female investors? This is a matter that should resonate deeply with them.

It’s time for all of us – men, women and anyone who believes in innovation and growth – to support small businesses. Let’s invest, have fun and maybe even make some money. More importantly, let’s help get this country moving again. Britain has a long history of entrepreneurship, and we need to revive it. Supporting small businesses is how we do it.

The future of the British economy does not depend solely on government promises or speeches. It depends on us: the investors, the entrepreneurs, and the people who believe small businesses can have a big impact.

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