Another fan of Tim Harford. Just listened to his podcast series, Understand: The Economy.
Might be a bit basic for some, but it was a good reminder to me of whatās currently going on with inflation, interest rates etc and what things mean, without having to wade through emotional stuff.
As for my investments in Freetrade, I invested in rounds 3-5 and always saw it (crowdfunding) as a big risk, with no real expectation or return.
If Iām honest, liking the company, liking Adam and Viktor when I met them, wanting the company to do well and wanting to invest via the app ranked higher than wanting to make money out of the company.
I think some are disappointed they will lose money from R7 after FT did not do what they implied they would get done back in those days. Everything was coming soon and most still is not done. Now the early investors will make a lot and the R8 are in a better terms position than R7.
This understandably makes R7 investors feel they got the poor deal and wonder what the value would be if what was promised coming actually came. I invested in FT as I believed it was going to be a long-term investment and thought they wanted to change the way investing was done etc as they said. Selling to JPM is not doing that and good luck to them, it is understandable as lots will make a killing and can retire to a great life or start a new project.
During the pandemic a lot of new people joined FT and invested in crowdfunding for a first time as they became a part of the forum family. This then will be a bit of shock to them and will feel that the FT they knew is changing and may soon be gone. First, we lose @NeilB and then this news comes in a short time and is a negative feel.
It is also worth remembering it is all hearsay at the moment and IF they do sell it is obviously what they believe is the best option for everyone as we may lose X amount, but the owners would lose an awful lot more in what profit they would have made if they sold in the good times. I would rather lose 80% now than 100% in a year or whatever.
As the saying is always repeated āInvest at your own riskā
Without context fully irrelevant. It actually doesnāt matter if Freetrade is a non profitable company. The question is can it grow on its own now without any additional funding?
Have another read of what I said. I did not compare the AUMs (I absolutely did not state Freetradeās AUM). What I did say is I am not sure what the attraction of Freetrade would really be to JPMorgan. And that is where I am. There is another post in which I go on to comment that JPM actually disposed of its retail investment trust customers. Of course, it may have changed/new business imperatives now (but I donāt know what these are).
Some people might be surprised but the fact that the company up for acquisition not turning a profit might not be that relevant to another organisation. These things are all contextual. I have been involved in the acquisition of two non profit making companies - the revenues were not at the heart of the acquisition and in fact did not play a role in the decision. I was involved in one acquisition of a profit making company and there the numbers were significant and material. But in all three the dominating thing was how the acquisition was relevant to our (meaning the acquirerās) strategy.
Freetrade has a number of positives that will be relevant to the appropriate suitor. To keep to the specific article I donāt know what Freetradeās plus points would be to JPM.
I remember reading that post also and I was hit and miss with this round as well but went with is as to try somehow to recover on the previous rounds loss but hey ho
Curious.
No threads discussing a possible takeover of Freetrade - reported on 1st Dec 22
From CityAM āJP Morgan is reportedly gearing up to buy stock trading app Freetrade in a grand push to expand its fintech offering.ā
From Sky News āJP Morgan is in discussions about a takeover of Freetrade, a British stock trading app that targeted a Ā£700m valuation during talks with investors earlier this year.ā
I do sincerely think whatever does happen, Fteetrade needs to wean itself off endless crowdfunders and try to stand on its own two feet financially.
I get that in the beginning stage of a fintech start up crowd funders are a nescarry fact of life.
Once a company has passed the early stages of being a fintech it needs to somehow cease being a caterpillar and spread itās wings for the first time as a butterfly, metaphorically speaking.
Freetrade may be bought, or it may choose to reject the offers and go-it-alone, but whatever happens ideally now isnāt the time to keep the endless chain of crowdfunding rounds going.
I think the vast majority of crowdfunders do not object to an exit via private sale per se. From what I can gather, what the crowdfunders with negative views on the potential sale at this moment in time moan about comes down to the price being potentially too low, below even what they may have paid for it.
As for the idea of endless crowdfunders. An equity crowdfunder of a start-up is as a shareholder as the millions of shareholders in Coca-Cola, Amazon, Alphabet, Berkshire, et caetera. Start-up or established blue chip, it does not matter. A shareholder is a shareholder.
I donāt think there is a valid reason to consider the ownership of a company by both big and small investors incompatible. Crowdfunders are not a dead weight on a companyās performance. Itās not like we are holding the birdās wings. Quite the opposite. We want it to fly high. Forever. And we want a decent return on our investment, unless obscene returns are available of course.
As for no more crowdfunding rounds. I think it would be a mistake to stop doing them. Crowdfunding is a great marketing tool. I think it still has a relevant role to play in brand recognition and customer acquisition in the new markets Freetrade wishes to expand into
Iām pretty sure Freetrade continues to crowdfund to grow awareness while allowing the community to participate, rather than as the primary source of funding.
agree, afterall the difference is just you are huge or small investor; the investee is performing or not, if you have millions +, then you can become VC, if you are not there yet, you are crowdfunder or angels
Hi - maybe one for @Viktor or @adam to comment on (if possible )
When I first saw the AltFi article I wasnāt too bothered to ask yet now also seen it reported on Sky and in other places.
Iād be very sad to see it fall into big bank hands (at this point in time) vs actually riding out the crisis and go to IPO. Yet I donāt know the path to profitability etc. and equally understand an acquisition might secure returns now to both the (hard working) team and founders plus investors. Versus the risks of building / investing in growth in the current macro-economic environment, and seeing a potential larger payout.
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