Fintech start-up Tulipshare wants to shake up the boardrooms of some of the world’s largest companies, by bringing activist investors together and using their combined voices to lobby for lasting and meaningful change in business practices.
North London-based Tulipshare, which is an appointed rep of FCA-regulated Khepri Advisers Limited, has a focus on ESG and believes that coordinated activism can be a much more effective tool than demonstrations and protests.
Though its UK-based Tuliipshare focuses on US stocks and has run campaigns on issues that range from climate change, governance and operational transparency, racial equality, CEO pay and political donations.
The firm is currently lobbying for change at Coca-Cola, Amazon, JP Morgan, Salesforce, Google and Mcdonald’s, among others.
Tulipshare was successful in lobbying Johnson and Johnson to stop selling talc-based powders, which had been linked to cancer, at the company’s 2021 AGM.
Data gathered by Tulipshare shows that 71% of US retail investors think companies should be held accountable for the damage they cause to the environment and society, but only 40% of those surveyed had voted at an AGM before.
Tulipshare also found that only 47% of recipients had been notified by their broker about an upcoming AGM and the issues they could vote on at that meeting.
However, it has recently announced the impending launch of a new platform, designed to allow more retail traders and investors around the globe, to take ownership of their investments and learn how to use their shareholder rights effectively, in order to drive positive ethical change.
The platform known as PYS or “Pledge Your Shares” will provide retail investors with early access to shareholder proposals allowing them to vote ahead of Annual General Meetings or AGMs. Regardless of whether they are clients of Tulipshare or not.
The new platform will sit alongside Tulipshare’s existing UK brokerage offering, through which retail traders can invest in target companies, and make their voices heard.
Is this the new face of Ethical Investing?
Well, it’s certainly an interesting concept and of course, we have seen what the power of social trading can achieve when large groups of like-minded inventors come together to focus their attention on a particular stock, or group of stocks.
The meme investing bubble saw effectively worthless, or even bankrupt businesses resurrected, as thousands of retail traders bought stock to confront hedge funds and other short sellers.
Some of these were driven into liquidation by massive rallies in stocks such as AMC and Gamestop.
Online trading has helped retail investors in many ways and has bought new investors into the stock market.
However, the boom has not necessarily been beneficial in terms of shareholders’ rights.
And, as Tulipshare have found very few shareholders have voted at an AGM or have been made aware that a meeting was upcoming, or which issues and proposals were up for discussion and a vote. So there is clearly room for change or improvement.
It’s all about achieving critical mass
However like so much in the online world, the success or failure of Tulipshare’s initiative will likely depend on its ability to obtain critical mass. Particularly, when the brokerage fees that the firm charges are fixed at $5.00 per trade.
CEO Antoine Argouges has plenty of experience in building and scaling social apps, however, that was in the dating space, and I can’t help but think that Tulipshare will need to partner with a large US broker to achieve that critical mass.
Tulipshare has previously raised just under $12.0 million in seed capital, but as we saw recently, with the closure of wealth manager Clim8, which ran out of money and was unable to raise more, in an environment where VCs are turning away from startup investing. A narrow product focus is not optimal in the current market.
Funding for European Fintechs fell by -83% in Q1 2023, when compared to the same period a year earlier, according to data from Dealroom and Sifted.
That means, that a good idea is no longer a guarantee of funding or success, and even eight-figure war chests can be emptied very quickly, particularly when you occupy such a niche position.