Equity Crowdfunding: Megathread

Yes am looking at that now, first glance it ticks all the boxes, Octopus backing, reasonable motivation to pursue crowdfunding (basically a bridge round and Octopus is contributing), sticky platform, reasonably scalable (not like pure software though, but good enough), seemingly adds customer value, team with good credentials.

Main questions for me are in understanding how this exactly adds value, total market size, digging into the team further and traction. Valuation seems full too, at 17,5x LTM revenue and 7,5x NTM revenue… Will update later

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Just an observation about Crowdfunding as I’ve pivoted in my approach recently and would appreciate thoughts.

1: I’ve historically invested almost exclusively through Seedrs and Crowdcube, About 50 investments from £5K down to £100. If, and it’s a big if, I was to get full current value against their valuations I’d have a 4x return from the past five years I’ve been doing this. (Freetrade, Monzo, Bird and Blend make up 75% of that return). I clearly won’t get all of that but they’re also still growing so will be interested to see where I end up. It comes with its own fears, what if Freetrade goes to nothing, what if Monzo goes to nothing…
2: I read Jason Calacanis’ book over Christmas where his main thesis is that your investments should be in Silicon Valley almost exclusively to get the outsize returns we would all like. (I’m not looking for a critique of this, the book is compelling on why this is the case.)
3: I would add that I believe UK fintech can also give outsize returns, although the time of cheap valuations may be behind us.
4: So my thesis is as follows:
a) in the UK continue to invest almost exclusively in Fintechs unless something special turns up
b) start loitering around US crowdfunding sites with a view to try and get Silicon Valley based startups. I’ve been accepted into a good syndicate and, I have to say, the deal flow is really exciting me already.

So those are my thoughts. I’m looking for outsize returns and think that focusing in on these two areas I’m more likely to hit them. That means being strict with myself about opportunities outside these areas which will be really difficult.

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Good post :ok_hand:t3: Would appreciate you sharing any good opportunities as you are seeing them :rocket::eyes: and are you willing to share details on the syndicate? ATB :handshake:

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I’ve sometimes taken a slightly different tack to what I’ve done on crowdfunding / early stage investments.
My focus has often been on the impact - í.e. Drug company with focus on COPD, PedalMe with their focus on pollution (also makes business sense), etc. so trying to blend the two, returns and impact. In the case of Freetrade í like the focus on the customer and aligning the interest of both…

:slight_smile:

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I totally get that and agree. Nothing wrong with a bit of Conscious Capitalism :ok_hand:t3:

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Here’s an interesting one for you. Serious heavy hitting founder (match.com :open_mouth:). Many parallel opportunities….

I like that it’s a platform and not a capital intensive business reliant on stocking the items them selves

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Greta post but what are the best US crowdfunding places to go to?

Anything @TickTock posts & @CashCow avoids! :joy::joy:

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:rofl: :clap: Very good! So who would they be? TBH I haven’t looked much further than CC but have downloaded Primarybid so now thinking I need a bit more info on what is best for these nice S.Valley stocks :stuck_out_tongue_winking_eye:

That’s exactly what my thoughts were when I first saw it but then realised it is a platform and a serious heavy hitting founder. Going to continue to do some digging on this one for the next few days…

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:rofl::rofl: I’ll keep ‘em coming and make sure I lift my game to only bring the good ones :pray:t3:

@Big-g The main ones are Wefunder, SeedInvest, Republic and Start Engine. I mainly use Wefunder (you’ll really need to filter through the rubbish though but there are some really good ones) and SeedInvest. Check out this slide I posted a few weeks ago (top graph Wefunder specific, second graph CF landscape)

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:open_mouth: Looks like I need to do some damage control on my reputation…

I’ve turned over a new leaf for 2022! No more :cow: :skull_and_crossbones:HOOVES OF DOOM :skull_and_crossbones: :cow:

I will only be applying my skills and knowledge to picking the finest growth stocks AND I’m going to win the FT Double Bagger competition this year with my well informed choice of Twitter. Just wait and see.

Ol’ :cow::large_blue_diamond:DIAMOND HOOVES :large_blue_diamond: :cow: is back in the game. I’m like the bovine Pied Piper, follow me to massive wealth!

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Fully agree with your approach of U.K. fintechs plus valley firms.

Like you, have been only doing first part of that equation as yet and actively looking to get spend more time on the latter.

Could you share the name of the syndicate? How does one go about becoming a member. Ofcourse there are the US crowdfund platform but think a syndicate would bring better quality deal flow.

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Most syndicates are effectively private clubs. You need to know someone who is a member, and who will vouch for you. That’s normally tough, as most of us don’t talk about investing habits in the real world and don’t share ‘club membership’ details with friends. It’s like the first rule of Fight Club.

So you have to ask around within your network.

Even then, most syndicates want to know how you add value beyond just ‘dumb capital’ - i.e. can you help with financial or strategic analysis, how strong is your own network, and will you bring deal flow? Some have interviewing processes and vote for admission.

I suggest starting with https://angel.co/ and signing-up as an investor, then applying to join some of their syndicates. You will learn a lot just from being a node amidst all the signal flow. But always do your own dispassionate research. Good luck!

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On TaxScout (raising on Crowdcube):

What I like;

  • Team has strong backgrounds and has a decent size.
  • Multiple prominent VCs and angels backing them.
  • CEO is investing GBP 200k on his own account.
  • Good traction (>2x p.a. revenue/customers).
  • Probably quite sticky, customers really like it (4.9 stars out of 2500 reviews Trustpilot, NPS >80).
  • CEO very responsive.

What I like less;

  • Certified accountants; scaling requires accountants, they seem to like pay them ~50 GBP per filing (GBP 119 price, 50% COGS, 80% of that they mentioned in a post), more of an unknown thing than directly a problem because don’t really have insight whether this is attractive. Company said accountants provide the service as a side income stream.
  • Unit economics: see discussions on Crowdcube, they spend alot to acquire customers, for the business model to be viable, products needs to be pretty sticky in order to have LTV > CAC.
  • Valuation: to me, valuation implies this is mostly a bet on their internationalization strategy, UK alone probably won’t make the bar in terms of risk/reward at the price

All in all, I think its a good quality deal, I’m leaning towards investing personally, mostly due to the VC support and great customer feedback.

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Sure thing. It’s Jason Calacanis’ “The Syndicate” although I understand that he’s pretty much oversubscribed on that now. I note he has three other syndicates now. Minimum investment tends to be around $4K (£2700) so I have to choose carefully as my budget for this year is fairly limited.

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@Andrewpclark good one mate, TY :pray:t3: Have taken a look and will defo connect into this guy and his opportunities. Perfect example how sharing on here can open up new opportunities :ok_hand: Hopefully can offer some value back to you going forward :rocket:

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SeedInvest founder Ryan Feit to talk about creating the ‘Robinhood for private startups’. An alumni of the I’ll freed Lehman Brothers (before the recession) who had to get a law passed to make his business work.

I’m sure you’re aware of Calacanis, I know he’s a very marmite figure but I get a lot of value from listening to him. His podcasts are great (TWIST and All-In), and his book Angel is a great listen on Audible. The Syndicate in theory sends out two opportunities a week on average.

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