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


#41

I’m very surprised at the preference for Crowdcube over Seedrs here having used both extensively.

I have a major preference for Seedrs as think the secondary market and community is worth the potential fee. It’s 7.5% of gains so interests are aligned, and if you are making diversified investments likely to be less than the Crowdcube charge.


#42

Hi @ETF-harro,
Been searching for a way to get access to a seedrs community forum. This would be cool if existed.

What I do find is a communication channels between investors and the companies they’re invested in. Which is good, but not the same as what I was looking for


#43

What you’re looking for does exist but is only available to those who have invested in Seedrs.


#44

What do you mean? For those who invented in seedrs and own shares of seedrs; or for those who bought shares of other companies using seedrs platform?


#45

Sorry for the ambiguity. If you own shares in the company Seedrs. It is exactly the same as any other investor forum on the platform but obviously there is more activity and discussion than most since it’s about the functionality etc.


#46

So… what I was looking for doesn’t exist!?


(Matthew) #47

Ok, I’ve invested in three companies via the Seedr’s platform. Post the closure of each funding round we shareholders still have a private set of company pages that contain the pitch information & doc’s, EIS paperwork, company updates and a discussion board/forum. This appears to remain open to us for each company for as long as we are still shareholders, but as far as I can tell they are closed/private groups.

I hope that this helps
Matt


(Andrew Clark) #48

There is a basic discussion forum on Seedrs which is successful when the company is communicative. There are LOTS of threads on there with people asking for an update, I am one of them.

I still don’t get how 7.5% share of success is better than 1.5% up front, can’t see I’ll ever agree with that.

One other point, I do think Crowdcube get better companies (Monzo, Freetrade etc) - it is far rarer for me to find anything interesting on Seedrs.


#49

Completely agree - on your last point I’ve noticed that Seedrs investors come across as more sophisticated & invest larger sums, but the quality of some of the companies on there are truly shocking! The end result is unrealistically high valuations, even by crowdfunding standards.


#50

Isn’t their a way to invest directly in to the app itself. Monzo pulled this off during the last round of their Crowdfunding. Cut out the middle men.


#51

Monzo still used Crowdcube behind the scenes.


#53

Another way to think about Seedrs 7.5% fee. Let’s say (hypothetically) that £10m is raised in this round at £50m valuation. If Freetrade turns out to be the next £1bn unicorn that we all hope it to be, the £10m invested would achieve a 20x exit at £200m, which means Seedrs would get an eye-watering £14.25m. Surely this is not in the best interests of either Freetrade or crowdfunding investors.


#54

On the other hand Seedrs 7.5% on the profit covers their costs if you do well, so they are incentivised to do good due diligence, I recall something about Seedrs rejecting a large number of pitches submitted to their platform.

While the 1.5% fee on the total investment may, or may not have additional charges. So not only do you pay regardless, if you do well, then you may pay a extra undisclosed fee.

Having said that neither is perfect.


#55

Surely it’s a no brainier this conversation re seedrs v crowdcube

1.5% vs 7.5%…

#nobrainer


#56

1.5% is only a #nobrainer if it means 1.5%. Would you be happy if they add a 8.5% two years from now? Or how about a 18.5%? Or a 3.5%? Really it could be any positive number.


(Ben) #58

So if crowdcube were to be awful and then charge an extra 2% I’m still struggling to see why Seedrs is better? Most of us are here for the long haul and I don’t want large cuts going off on a high risk investment. Worst of both worlds. I think most people just want to pay the least to the middle man as possible.


#59

Yep but I think you’d want the middle person to be stable, and not add extra unknown fees, or add extra clauses that disadvantage the investor later on.


#60

One more small point as far as I know all Freetrade shares have been direct ownership rather than Crowdcube’s nominee service. So the damage might be minimal.

Finally I’m not a advocate for either, Crowdcube, or Seedrs. I think neither is perfect. I just have certain expectations.


(Chris) #61

I think the only clear answer is to have the raise split in two and go on both platforms.

/s


(Andrew Clark) #62

You might enjoy the comment I had from one of the companies I’ve invested in on Crowdcube today who, in the past year have had an investment from an Italian bank and issued preferential shares. I have asked for information a number of times, literally any information would be nice. An email in December contained a single paragraph with one number in it but the comment today took the biscuit - “I remind you that if you are C shareholder you do not have information rights.” (this is not true, they rank equally with B Ordinary Shares in every respect (including the right to participate in dividends and capital distributions), save that C Investment Shares do not have any voting or pre-emption rights.) Formal complaint has been raised!

This is one of the fundamental problems with Seedrs and Crowdcube, they really need to insist that the regular sharing of data is a condition of using the platform.