Should Freetrade use Crowdcube or Seedrs for the next crowdfunding round?


#1

I’ve pleaded before but Freetrade, PLEASE don’t use Crowdcube for the next round.


4th round?
(Matt) #2

I agree. Seedrs would be better at this point, and this is from someone who has shares in Crowdcube.


(Alex Sherwood) #3

I can’t make any promises but we’d be interested to hear everyone’s feedback on this. This isn’t something that’ll be decided based on a vote so if anyone does have a preference, it’s more useful to hear your reasoning :ear:


(Rafael Solano) #4

Yes! This is a really sensitive information to be shared upon. You can’t just make up a decision based on the voting. Seedrs seem a little out of my cup of tea, to be honest (wireless router settings with username and password). Read something about it on some blog and haven’t actually used it afterwards.


#5

Well, there’s the 1.5% fee to start with. But more importantly it’s that investors who have been doing this for years have completely lost trust in Crowdcube. No due diligence, terrible customer service, they will allow any old crap on the platform and as soon as they’ve got their cut, just do not care a jot. If you want thousands of naive investors pledging £10-50 it’s probably your best bet. If you want your own community to be involved, Seedrs would be much more suitable.


(Alex Sherwood) #6

Thank you :raised_hands:


(Aris David) #7

Seedrs will charge you 7.5% on profits made when your investment increases in value.

The 1.5% fee on crowdcube is nothing.

The only good thing about Seedrs is their secondary markets.


#8

Crowdcube has 1.5% fee upfront, but Seedrs has a 7.5% fee on any profit made (i.e. in excess of the capital invested).
Next difference is that Seedrs uses a nominee structure, and has a secondary market.


(Aris David) #9

I’d rather take 1.5% hit on my initial investments than a 7.5% fee of potential future profits and y’all know FreeTrade is a potential unicorn : p !


#10

To hell with paying 7.5% on exit - talk about taking all the reward and none of the risk!

I would rather pay 1.5% now when Freetrade is only worth £100million :wink: than 7.5% when Freetrade is worth £1billion!


(Pablo) #11

A baby unicorn already, just needs to keep being fed :wink:


#12

Don’t use Seedrs- I don’t want my shares in their nominee and I certainly don’t want to pay 7.5% of my future value.

To my knowledge Crowdcube will simply enable the purchase of the shares but once all done it will be Freetrade who manage the shareholding through their share register and Crowdcube will have no further involvement.


#13

Okay. I suppose the way I see it that Crowdcube gets paid as long as it sells a product, whereas Seedrs gets paid if it’s a good product. No incentive for Crowdcube to support the company and investors after the fundraising.


(Dave Smith) #14

I know Crowdcube are a bit rubbish on the due diligence side, and their site is full of crap, but we also know that Freetrade is not part of the chaff, and 7.5% of the profit is probably gonna be way more than 1.5% now


(Kenny Grant) #15

Yes I’d prefer to stick with crowdcube - it’ll be simpler and cheaper for freetrade to do so, and the crowdcube fees (at least at present) don’t strike me as that onerous - certainly compared with seedrs. It would also be simpler for existing investors to have everything in one place.

The ideal of course would be for freetrade to manage their own crowdfunding completely in the app and just issue shares directly, but that is probably not something they want to get into at present!


(Dave Smith) #16

And I supposed if you do back a loser and it goes bust it doesn’t really matter whether the money you lost included a 1.5% fee or not :smiley:


#17

Worth noting that Crowdcube has raised a few rounds without the 1.5% fee in the last few months. So perhaps you can do something similar?

Whatever happens I don’t want to be under Crowdcube’s nominee structure, as it seems they will unilaterally switch terms in their favour in a opaque way.


#18

So, I guess the question comes down to:

a)is it worth to pay a 6 percentage points premium on potential gains in order to have access to a secondary market?

I don’t think so. If the company fails no one will want to buy the shares anyway. I the company is successful prospective buyers and sellers will find a way. Sure it might involve more hassle, but is 6 percentage points worth it?

b) and to have more transparent terms?
This might be something worth considering. Is there any hidden costs to add to the initial 1.5% fee? Are they so high they gonna match seedrs premium? Or become more expensive? Are our holdings less safe with crowdcube?


(Dave Smith) #19

It’s not 6 percentage point because crowdcube’s 1.5% is on the investment, but Seedr’s 7.5% is on the profit. If you back a future Unicorn at a low valuation and you put a few grand in your profit could be hundreds of thousands, 7.5% might be a few grand!


#20

I’d prefer to have 92.5% of something than 100% of nothing.

Okay, okay, we believe in Freetrade, but Crowdcube is not a trustworthy platform.