Like you Ben, I also invested more than I would normally in round 4, for a startup. But I liked the pitch & team and I am using the app regularly so I am glad I did.
Interactive Investor, which is also private/unlisted has an estimated valuation of around Ā£675M (pre pandemic) and is profitable with > 300K customers. With Ā£30 billion of assets under administration.
It will be interesting to see how the FT Round 6 valuation compares to this.
Could someone clarify which tax relief scheme will apply if investing in Freetrade?
Is any element can be tax relieved against Income Tax (grey area from reading up online)
If you can claim EIS then you can get an income tax offset but Iām not sure if Freetrade will be eligible in this round.
Adam mentioned at the last AMA that there would be EIS available for the next round.
That is actually a very sensible strategy which is used by all VCs and successful business angels. If you have a winner in your portfolio, you protect your position against dilution by following up in subsequent rounds. If fundamentals havenāt changed, follow-up rounds should be less risky as business has matured and outlooks are much clearer.
Iād like to think FT would at least consider Seedrs, given the secondary market. Unless CC pull something out of the bag (looks like that will be along way away).
100%.
Seedrs is objectively the better platform.
I think the valuation per user was a fair bit higher in R4 and R5, in the 1.0+k region (30k users, 33m pre-money valuation maybe?). Not that that necessarily implies anything about where the valuation should be next round.
Does the next crowdfunding have to happen during a global pandemic and high unemployment? I hope it happens afterwards when people have more spare money (I am a two-round investor).
The multiples - I can imagine theyāre being revised downwards or are more conservative. VCs are telling portfolio companies to tighten belts.
Canāt believe Revolut, Tesla and Square managed to raise so much money right before the poo hit the fan.
Teslaās raise was truly incredible. They timed that to perfection in so many ways.
From a previous thread on seeders or crowdcube the main issue I remember with seeders is they take a % chunk off any future sale which is almost like a tax (eis shares are exempt of capital gains tax)
7.5% carry fee on net profit.
Seedrs have also introduced a transaction fee to sell via secondary market.
Iād be interested. Do current Freetrade members get priority access to investment?
Usually they do
An interesting analysis, but you failed to take into account any value impact due to COVID-19. How many customers will clear out their investments as they need cash now due to loss of income? How many new investors will be too scared to carry on after seeing their chosen stocks bomb over the last few weeks? How many newly unemployed wonāt be able to save or invest?
You then need to factor in upcoming competition from Robinhood and other startups, old school platforms playing catch-up, and other risks including a possible global recession.
Letās hope FT succeeds, but in the meantime please donāt make any investment decision based on the love of a brand while being blind to the risks.
Yes Adam mentioned we would get this chance, but speed is again going to be key!
Thatās not true. T212 were offering unlimited free trades back in 2018, well before Freetrade Android was released and R4/5.
Even so, during earlier rounds I donāt think anybody expected there to never be any extra competition, the incumbents would follow and/or more players would enter the market. The market is big enough for plenty of players and the likelihood of Freetrade being successful with 180,000 users is a lot higher than when they had 30,000 users.
If EIS (Enterprise Investment Scheme) applies to your investment ā there is usually a first come, first served based limit to this for each round of investment ā you can then claim 30% of tax relief on your invested amount. I got mine paid as a PAYE tax code adjustment and it was quite easy, albeit it took a few months to be processed by HMRC
Me too. I want a bit more financial security in my own life before making any big private investments.
At least my portfolio can be liquid, a private investment Iād have to be happy having that money locked away for good.
Iād love to be involved but it will come down to what happens with the lockdown.
Lots of suspicious new members commenting once again! Just like the last fundraising round they (competitors) get all nervous and try and dissuade people investing. Hilarious given the last time they did this FT raised funds faster than anyone in the history of Crowdcube and ended up crashing the Crowdcube website.
