Psychedelic Investor Pulse Survey
In Summer 20221 we conducted our inaugural Psychedelic Investor Pulse Survey, publishing the results shortly thereafter. In Q4, we decided to again poll our community of psychedelic investors to see whether sentiment and investment intentions had changed.
Below, we briefly present the results, focusing on any changes that have emerged between the two surveys. Readers who did not access our 40+ page analysis of the inaugural survey might benefit from doing so. There, we discuss each question in much greater detail.
Part of our Year in Review series
Given that macroeconomic headwinds were already in full swing by summer 2022, it’s perhaps unsurprising that psychedelic investors have not demonstrated a great deal of change in their attitudes since our first survey in Q2.
Responses to our survey—which was advertised on two occasions via our newsletter and investment opportunities list—were up in Q4, with 2342 respondents. The survey once again sought to understand the investment activity, sentiment and forward-looking intentions of a diverse array of investors: from individual retail investors through to family offices, VCs and investment banks.
In order to allow for comparison between survey cohorts, we utilised an identical format and question set, adding just one new question in the Q4 survey: Are you looking to invest in the Oregon market?
Below, we provide a brief overview of the findings, pointing out any notable differences between the Q4 responses and those from Q2.
Type of Investor
As with our Q2 survey, the vast majority of respondents in the Q4 survey were retail investors.
A not-insignificant portion of respondents were accredited investors3, with a third segment of respondents identified as institutional (or quasi-institutional) investors including corporate investors, investment banks, family offices and VCs. These latter two categories are slightly more prominent in the Q4 survey than in Q2, though it is not a significant change.
Amount of Capital Invested in Psychedelics in the Past Year
We asked our investor community to estimate how much capital they have deployed into the psychedelics space during the past 12 months. The self-explanatory results are displayed below:
Respondents in the Q4 survey were slightly more likely to have invested larger sums, reflecting the inclusion of a handful more institutional investors in this cohort.
Next, we asked investors how they deployed capital in the space: from the purchase of publicly-listed shares through to participation in private financings.
As is to be expected, private financings were more commonly the domain of accredited and institutional-type investors4.
Given the larger number of respondents from accredited and institutional classes of investors, it’s unsurprising to see more respondents from the Q4 survey investing via private financings and funds.
Investors’ Personal Experience with Psychedelics
A slightly larger portion of investors that responded to our Q4 2022 survey identified as having never used psychedelics (represented by 1 on the scale).
When we disaggregate the data by investor type, it’s apparent that this trend is driven by retail investors.
In fact, there was a large increase in the portion of accredited investors that have significant personal experience with psychedelics.
Attractiveness of Psychedelic Value Chain Segments
There were no significant changes in value chain segment attractiveness between the Q2 and Q4 survey respondents.
Drug Discovery and Development continued to be a consistently popular value chain segment, with three quarters of respondents finding it attractive. There is a mild increase in investor interest among more infrastructure-related investment segments such as therapist training, clinics and care delivery, and technology. This is unsurprising, as these topics have become more salient in the sector throughout the course of the past year.
This chart shows the value chain segments that investors deemed to be attractive in a simpler fashion:
The next set of questions guage investors’ sentiment and forward-looking investment intentions.
There is no major change in sentiment among psychedelic investors, but some subtle shifts.
Though a greater portion of investors reported 2, representing pessimistic sentiment, fewer reported the most negative sentiment, 1. The median sentiment shifted from 4 in Q2 to 3 in Q4.
Planned Allocation (Next 12 Months)
The majority of investors that responded to our Q4 survey intend to allocate either a similar amount or more capital to the space in the next twelve months than the prior.
Accredited and institutional-type investors demonstrate staying power, too, which is important as a large number of psychedelics companies are engaged in capital-intensive clinical trials.
The below chart, which maps investment plans for the next 12 months onto the respondent’s past 12 month allocation, again demonstrates staying power among larger cheque writers.
Note that, unlike other charts in this piece, the below chart does not show Q2 results, due to difficulties in normalising the data across the two cohorts.