Could you find investment opportunities here? [Source: Fabbaloo]
Investment is the energy that powers companies, and it’s very rare that a company makes sufficient cash to fund itself during periods of rapid growth. Let’s talk about investment in additive manufacturing.
Investing in Additive Manufacturing
That’s why it’s key to obtain outside investment, where a typically small slice of the company is sold to others in exchange for the money. Both the investor and growing company strongly believe in the concept and expect it to lead to significant growth.
It’s that belief that is so important. You wouldn’t invest in something unless you had supreme confidence that it would work, would you? For so-called “angel investments” where the parties often know each other, that confidence comes from familiarity. But what happens when the parties don’t know each other at all? How does that confidence generate?
That’s the eternal dilemma facing growing companies. It’s extremely difficult to attract investors, particularly professional investors. That’s because they are usually besieged daily by questionable propositions from suspicious parties looking for cash. As a result, they put up strong walls to help let only the best concepts through.
Investment Returns To 3D Printing
Investment flows, as you might guess, largely around perceptions of an industry and company. In the 2012-2015 period, 3D printing received a significant amount of investment due to the massive technology hype at the time. However, those investments largely turned bad and we then saw a significant drop in investment in 3D printing companies.
As the technology has gradually shown that it truly can be highly profitable in different niches, investors are slowly coming out of the woodwork to place large funds in likely winning companies. In fact, we’ve heard recently about a major investor setting up a massive US$ fund for investment in the technology.
How To Find 3D Print Companies To Invest In
But such funds, like individual investors, still need to identify and connect with good investment opportunities. How is this done?
Sometimes it’s word of mouth, but that is pretty haphazard. Once at a New York 3D printing event I saw a couple of suits who apparently had taken the afternoon off from their dealmaking offices and wandered the show. One of them literally said out loud while passing by:
“I’m looking for the next Shapeways!”
That’s not the best way to find investment opportunities, obviously. But what is a better way?
I see that the Formnext exhibition this fall in Frankfurt has set up a special “investors dinner”, hosted by Wohlers Associates. Additive manufacturing guru Terry Wohlers will speak on the state of the industry to an audience of, presumably, investors.
I think this is a good step forward, as said investors would likely be wandering the near-endless floors of Formnext in search of “the next Shapeways”, without much happening.
3D Print Speed Investing?
Another good step would be to explicitly arrange for companies seeking investment to be presented to potential investors. I could see an event much like speed-dating, where the two types are exposed to each other briefly to see if there is a match. I’m not sure anything like that exists in the 3D printing world, but at events like Formnext and other similarly large collections of relevant parties, it shouldn’t be that hard to do.
Maybe we will see such an event in the future.