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

[Raul (Ann Onymuz)]

@lizmcp

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

@mjk97

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

@lizmcp

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.

@adavid

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.

@Dave

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

@saf

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, they happily switch terms in their favour unilaterally in a opaque way.

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?