The idea of an exchange to trade assets in a specific area is nothing new – and it is a concept that has already stood the test of time. Just look at the London Metal Exchange or the Tokyo Commodity Exchange, both of which have been established for decades at least.
New Investment Concepts: wider trends
Stock trading – whether on a specialist exchange or a general one like the London Stock Exchange or Nasdaq – was for many years a world of high barriers to entry, limited to big players on both the investment and company side. But in recent years this has changed dramatically. ‘Investment’ now means many things to many people.
New platforms, often called neobrokers, have thoroughly democratised investment, making it available to nearly anybody with a smartphone. Among many well-documented examples are America’s Robinhood and Austrian company Bitpanda. By reducing fees and simplifying processes, platforms like these are also now making small (or even micro) scale investments viable.
In parallel with simplified access to trading, the range of possible investment products has also exploded. While traditional shares and funds have gone nowhere, exchange-traded funds (ETFs) and trading directly in metals are now popular options for non-specialists. Then, of course, there are even newer concepts such as cryptocurrency and the controversial SPAC.
Startup Investment: A world of new possibilities
Unsurprisingly, considering the trends outlined above, it’s also becoming easier – in terms of execution at least – to invest in startup companies and innovative projects.
While the skill in identifying a worthy investment remains essential, there are now more ways to back startups. One no longer needs to have a huge amount of cash in order to buy a ‘ticket’ and startups invariably no longer need to go down the traditional venture capital route. Crowdfunding platforms, ranging from Kickstarter to SyndicateRoom, have changed the game in this regard. It’s now even possible to invest a lump sum in an automatically diversified portfolio of startups, such as SyndicateRoom’s Twenty8.
And a stock exchange specialising in startups? The inevitable became reality in September 2020, when the Long-Term Stock Exchange opened for trading in America. It was approved by the Securities Exchange Commission (SEC) and is geared towards investors making long-term bets on innovative companies. It’s a far more reputable alternative for serious investors than a SPAC.
Considering all of these trends together, it is hard to disagree with those who claim that we will see sector-specific startup stock exchanges in the near future.
A Longevity Stock Exchange?
You may argue that the idea of a specialist stock exchange is a dated concept in a world where we can invest in anything with our phones at any time. But we also live in a world characterised by more content than we can handle and one in which niche specialists are thriving.
Apart from things like positive network effects and more liquidity for the sector as a whole, something like a longevity stock exchange will help those with an interest in that topic to focus on it; they’ll be more aware of both opportunities and trends – and so will longevity innovators. And that’s a good thing all round, because it provokes thought, promotes competition and thus ultimately leads to better solutions faster.
It could also make it easier for longevity startups to raise much-needed cash directly, and to do so at an earlier stage while retaining their independence. Nearly all BioTech startups face high costs due to their intensive research work, and funding can be a constant battle. Not all of them are suitable for crowdfunding models, and some are forced to sell out to giants early on or even depend on one-sided partnerships. A specialist stock exchange would provide them with other options.
Consider the claim that 99% of the hundreds of longevity startups are not publicly traded, meaning the vast majority of them are missing out on the most established company funding model of them all.
Dmitry Kaminskiy, a partner of the Deep Knowledge Group is among the most active proponents of a stock exchange, albeit with a particular focus on the intersection of longevity and WealthTech. Kaminskiy aims to create longevity exchange-traded funds and derivative products as the first step, followed by a longevity investment bank and then, ultimately, a longevity stock exchange.
As mentioned on his site: “The launch of a specialised Longevity stock exchange and Composite Longevity Index is the culmination of the Longevity industry’s transformation into a fully fledged and matured industry. This would provide increased liquidity, which in turn would enable greater flexibility and greater leverage for the further growth of the companies listed on the exchange, and as such greater opportunities for the advancement of the Longevity industry as a whole globally.”
It is probably fair to say most of us have more than a passing interest in seeing longevity technology succeed as soon as possible. If not for our own sake, then for that of our children. That being so, many will be keen to see this (for now) fictional stock exchange become a reality as soon as possible so they can get their money behind any ideas that merit investment.