We’ll also be holding a community meetup next Tuesday 13 September, save the date. More details to follow very shortly!
See you soon,
Investing in start-ups and early-stage businesses involves risks, including illiquidity, lack of dividends, loss of investment and dilution, and it should be done only as part of a diversified portfolio. Crowdcube is targeted exclusively at investors who are sufficiently sophisticated to understand these risks and make their own investment decisions. Investment opportunities are not offers to the public and investors must be eligible Crowdcube members.
Is this round happening through Crowdcube? I’m severely against their Success Tax model that skims off our profits when we’re winning but doesn’t compensate us when we lose with our crowdfunding investments. I’m happy to pay them a flat fee but if they want the rewards of investing then they should take the risk themselves.
’ A Convertible is a type of equity funding round. Companies generally raise capital through a Convertible as part of their funding strategy if they’re looking to get funds quickly, opening up equity to their valued community, or in the process of securing cornerstone investment, and have a larger funding round coming up in the foreseeable future (roughly within six months).
A Convertible is very similar to a regular equity round on Crowdcube. However, the company doesn’t set a valuation or a share price. Investors pay an amount (a multiple of £10).
At a later date, the Convertible amount is converted into shares, usually when the anticipated follow-on funding round is completed. Generally, a company will complete a follow on round within a certain time period after the Convertible round. The follow-on round can be on Crowdcube or it could be a VC round etc.
Yup sadly Crowdcube is a part of this. @Adam and @Viktor claimed to be against middlemen so not sure how they square that up with doing this with Crowdcube or anyone that profits with no skin in the game from Freetrade investors.
I appreciate the need to use an external platform for the crowdfunding (don’t want it to end up like the merch distribution!), I just dislike Crowdcube’s Success Tax and don’t want to use them until they see the error in their ways and scrap it.
I imagine there’s a lot of internal politics around it too, with Molten having big holdings in Crowdcube and Freetrade. It’s not something I want to berate Big V and The A Man about too much because of that Molten link.
With reference to Crowdcube’s sudden imposition of a carry at the time of R7: I don’t think that Freetrade management played it fairly either … there were several confusing and misleading messages. With respect @Adam and @viktor are responsible for this. They did not answer several questions that were directed to them. When push comes to shove, in case of a complaint, I am sure the FCA would not be impressed.
Yes, it would appear that as Crowdcube is a Molten Ventures portfolio company it has something to do with it. But that is neither an excuse nor a comforting thought. Integrity is more than words.