Crowdfunding round seven, Wed 24th Nov 2021 🎉

The response from Crowdcube says, “In the event of a sale or return being made to you”

I interpret that as, Crowdcube thinks if Freetrade is bought buy a company and they want Crowdcube to distribute the funds back to investors, or if an individual wants to sell their share through Cubex. So, If it passes through Crowdcube they will take 5%.

But if Freetrade IPO’s and shares go to a public exchange, or Freetrade adds our shares to its app to be traded, nothing to do with Crowdcube, and no involvement from them, so they cant claim anything.

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It doesn’t mention that carry fee only applies to nominee shares

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I’ve made my investment based on the 5% charged so Adam will only make my day if he confirms it’s not.

But to be honest, we all getting focused on 5%. Don’t forget the tax man is going to take 20-45% (for anything above the CG limit) without EIS protection. At least the 5% fee is tax deductible :stuck_out_tongue_winking_eye:

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If the 5% fee applies I certainly will not be taking up my allocation.

A fee like that should be so obviously clear and upfront.

The 1.5% fee was hard enough to take as it was


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Not for non resident’s! :wink: We get to have our cake and eat it too. :100:

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One thing I do know is that wherever theres money theres always someone trying to take a slice of it.

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I know a lot who commented here were already invested so not sure what process they went through but as someone who made a 1st time purchase through CC I have to be honest and it seemed perfectly clear to me that I would be charged 5% at some exit stage on my investment from the prompts I was given by CC.

I would be delighted if I don’t have to pay it but I was informed of this by CC before I invested similar to standard warnings about confirming payment on normal investments. It was so clear that when I was explaining to someone I had convinced to also invest that I read out the claim and double checked they were aware of this.

That said, reading lots from above I am very confused and don’t have a clue what the deal is now. :rofl: :rofl:

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Guys, let’s take a step back. CC have to this in order to build a sustainable business model. They built a platform that has enabled many of us to invest and get introduced to interesting business and also have provided vital funding to many startups.
It is not a charity and they will eventually run out of funding if they don’t attempt to be profitable.

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I don’t understand people who are saying they won’t invest dues to 5% carry. That’s like saying you don’t want £100 because you have to give £5 of it back

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I agree and hence my comment that I 100% expected to pay 1.5% in and 5% out, no problems to me for the reasons you mentioned. :+1:

What is not good is when there seems to be very conflicting information from either side of the official sources. Forum gossip is one thing but it seems the companies are posting opposite views and that is confusing. :man_facepalming:

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Its not that Im resentful of paying fees. I understand that CC need to be a sustainable business but they are taking fees direct from the business being listed, then direct from the investors at investment time and then again on exit. Seems a little excessive but ive not really looked at CC profitability or margins.

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It’s also like saying I refuse to work because HMRC will deduct NI :joy:

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Hi,

Does anyone know when these are awarded? I sit in the ÂŁ100+ bracket.

Also, how do you go about claiming them?

Thanks :slight_smile:

Bit surprising that Freetrade need to clarify the investor fee structure with Crowdcube after the UK leg is fully funded.

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Only if you’re employer is telling you that you don’t pay NI and HMRC are saying you do.

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I really don’t understand why we are here talking about “Crowdcube margins”, “Crowdcube have to to this in order to build a sustainable business model”, “it is not a charity”, etc. We are here to invest on Freetrade, so it is not the point to discuss CC business model.

As a former investor, I invested on Freetrade since 2018 and when CC introduced their new 5% fee, I asked several times to clear this out because, as @GMCay said, their wording wasn’t clear at all and they never explained if the fee applied for Freetrade new rounds or not (because their business opened to investment before that date) and how matching previous shares with X conditions and new ones with Y conditions would be done if the fee applied.

Reading “5% carry will be charged on shares bought after April 2021 and only applies to profits made on investments in businesses that opened to investment on or after the 1st of April 2021”, my point of view was clear: Freetrade opened to investment BEFORE that date, so 5% carry fee didn’t apply.

And that point of view about no 5% carry fee applied to Freetrade was confirmed by @adam on his tweet (“We’re still using the structure from 2016, so everyone is a direct shareholder. There shouldn’t be any carry”) and on his answer on this thread:

“I suspect the customer service person wasn’t aware that we aren’t using the nominee structure, which is standard at Crowdcube now (it didn’t exist when we first raised in 2016). He implied that Crowdcube would receive the proceeds of any share sale, which is not correct for direct shareholders.”

I am an investor on Freetrade (not on Crowdcube) and Freetrade is telling me that 5% carry fee model doesn’t apply, so why I have to pay a 5% success fee when conditions indicate it is not the case?

I am also not a charity for Crowdcube and as a former investor, on my calculations about investing again on Freetrade or not, that 5% fee is relevant for my decision. That is why this situation needs an urgent clarification.

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Not sure on timescales. My guess is couple of months (R6 updates took a lot longer). Email / details cross checked with your freetrade app details then updated could take some time (for everyone).

Agreed. All I can hope for is my 5k worth of shares eventually make me a profit irrespective of the 5% from CC.

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CC are taking none of the risk in investing their hard earned money, but are taking 5% of the success after already charging to make the investment.

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Hi Louis
I missed out. How much are you selling?