The sale of Feedr should be a thing of celebration but it is not currently as some Crowdcube investors are questioning the supposed Return on Investment.
An investor I know personally is disputing the claim by Matt Cooper that investors got 2.8x returns as He only got 1.768x return on investment which is 1.69x after fees.
His calculations:-
share price bought at £1.34
sold at £2.37!
2.37/1.34 = 1.768x
but in fact after fees I received 1.69x only
£19.5m / £4.5 = 4.33x
Where
£19.5million (His conversion) = sale price in Dollar terms was $24million
4.5million = preMoney
I think there is need for full transparency. I did not invest in Feedr so I do not know what is going on only sharing the information given by my investor friend.
As for the information on 2.8x it was Matt Cooper of Crowdcube who posted it on LinkedIn in a congratulatory message to Damien Lane of Episode 1.
So is it 2.8x or 1.79x or 4.33x?
Another point raised by my source 
was the promise of 8 - 10x during their raise. Was the Feedr team rushing off the sale too early or too optimistic in their projection?
Feedr investors this is your day in the sun!
+72.52% return based on my calculation using what I invested and what was paid out.
Even based on the figures in the email it’s in the +76.86% region. But then they said there were transaction costs, hence the slightly less amount.
Unsure where the 2.8x comes from.
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Hmm, interesting.
I received 1.69x return after the transaction costs.of 3.5% in the end. This is return is estimated based on me having to pay back the EIS benefit as the company was sold within 3 years, otherwise it would be higher.
Do not really know the details the acquisition but assuming they sold for ~$24m it certainly looks like crowdcube investors lost out a bit.
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My friend’s question is was the Transaction cost £10millionish?
If all investors have “the same economic rights” as stated in the company memorandum why was the whole transaction not open to every investor to peruse the documentation(s)? Transaction costs is a vague statement. Who benefitted from the cost accrued to the transaction and why?
Transaction cost of 10 million for a small company and a small exit would be unreal.
Has your friend asked Crowdcube?
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According to the communication shared by Crowdcube, the transaction cost was something imposed by Feedr. Below is an excerpt of that email:
“… we have received notification from the Company that it intends to deduct a small percentage of transaction costs from the purchase price payable to all of its shareholders (including Crowdcube Nominees Limited). These costs will be distributed between all shareholders on a pro-rata basis. These costs comprise professional fees (including legal fees) incurred by the Company in relation to the sale.”
With regards to the transaction not being open to every investor, it may have something to do with the shares being held by Crowdcube Nominee account. But this is just me speculating, I don’t really know the intricacies of the legal rights crowdcube investors has relative to other investors - it’s probably best to reach out directly to Crowdcube on this
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I am curious that is why I am asking? Company was sold for £19.5million ($24million) investors only got £8.8million leaving £10.7million.
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