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


(Harry) #63

My preference is to remain on Crowdcube. I like the platform and user friendly. The main reason for me is consistency - all shares held on the same platform makes it far far easier, plus as an existing investor I think a Crowdcube has a greater profile and reach, and therefore is more likely to facilitate a successful raise (in terms of total capital) vs Seedrs.

I don’t think there is a huge difference, the difference in fee is negligible. Comes down to how comfortable you guys are on the back end, frankly it is more simple to stick with CC unless there is a particular benefit to switching.

Due diligence is not a consideration - Freetrde do not filter good/bad companies on their platform, if a PLC goes bust I’m hardly blaming the broker.


(Jake) #64

Freetrade wouldn’t you feel it be easier to cut the middle man out and do the raise yourself? You got so much support here on the community and from investors, then you could also add a share value of the company on the app for investors, just add a page for the app to follow to invest direct with all information and T&C? Worse case you go to CC for the remaining amount needed? Seen this done many times by smaller companies


(Matt) #65

It’d be cool if they did something similar to what Monzo did where they allowed people to invest through their own app but it was powered by Crowdcube.


(Jake) #66

Yeah for me the biggest issue I have is keeping up with how my shares are doing having invested in things from 3 years ago be nice if they added a secondary market with updates even partner with CC that way share members and sometimes like me feel like investing in the market rather then start ups just be good to have it all in one place


(wayne lamb) #67

What about syndicateroom, they are a very good platform.


#68

Site differences below - personally I would be concerned about share dilution and pre-emption rights on Crowdcube if this is correct…

Syndicate Room blog post


(Ben) #69

Bit shocked at the possible pre-emption rights of crowdcube. I always knew that share dilution happens if you can’t afford to keep up with multiple rounds, but the idea that someone could issue 1,000,000 shares and buy them for a measly quid leaving your investment worthless while they walk off with 99.999% of profits defeats the whole idea of investment. Why would any of us bother? If that’s correct, then I’m more than alarmed! Maybe giving seedrs 7.5 isn’t so bad after all!!


(Kieran) #70

Can anyone point to any real life examples of this btw? Everyone always talks about the Facebook guy but that’s a bit niche, he ended up winning a load of money in a settlement in the end anyway and did very well for himself considering it sounds like he did absolutely nothing towards the development one Facebook.


(Matthew) #71

Two of my CC investments have had subsequent investment rounds from Angels or VC’s that we original investors were excluded from. In both cases I discovered that our preemptive rights had been removed by looking it up on Companies House. Both follow up investments were for at least the same share price that we paid, but it’s not very nice to suddenly find that you’ve been excluded.

Matt


#72

Out of interest, what are fees for using SyndicateRoom??

Though realise it probably can’t happen, but I do love the idea of simply purchasing FT shares from the FT platform!


(Matthew) #73

https://www.syndicateroom.com/faqs/are-there-any-fees-for-investors

Matt


#74

Well, syndicateroom get my vote. Perhaps there should be a poll?


(Matthew) #75

Worth noting as SR might not br right for everyone.

https://www.syndicateroom.com/faqs/why-is-the-minimum-investment-1000

Matt


(Emma) #76

That would exclude the vast majority of potential investors


#77

Is it possible to run an investor campaign over multiple platforms (eg. both seedrs and syndicateroom, etc)??


#78

I’m not currently a shareholder but I would want to invest in Freetrade only if it used Seedrs. On top of the anti-dilution protection, it also has tag-along-drag-along rights on each investment. I think people underestimate how important this is.

A company might want to buy enough shares in a company to gain control or access to assets, but not want to buy 100% of the company. This could leave Crowdcube investors in a position where founders and VCs have sold out, and their shares will never be bought, or they might only be offered a significantly lower offer than the large shareholders. tag-along rights give you the option to choose to sell on exactly the same terms as other shareholders sell for.

Drag-along rights benefit the founders/large shareholders more, as it allows them to force a 100% sale on the same terms as them if they buyer wants 100%. My understanding is that Crowdcube companies often have drag-along, but not tag-along rights.


#79

Am I missing something? Crowdcube would simply action the purchase of new Freetrade shares, they won’t administer them or have any control over them once the purchase is complete - this will be handled by Freetrade themselves using their share register?

Whereas with seedrs you are stuck with their nominee and all the risks that comes with (even if small risk)

Again I would prefer a one off transaction costing me 1.5% all done and dusted with Freetrade in control of my shares, than pay 7.5% exit fee (which will be HUGE) and also have my shares in someone else’s nominee - just look at Monzo share fiasco with them being held in nominee.


(Emma) #80

How many shares do people have that they’re worried about dilution?


(Dave Smith) #81

Interestingly, having never thought about pre-emption before It’s come up twice for me since it was mentioned in this thread. First nanusens had a private pre-emption round. Previous crowdcube investors were invited to take part, so all good there. Now pod point has sold a 13% stake to Legal and General, we didn’t get pre-emption rights with that. I guess there will be some dilution there, the good news is the valuation went up. Not sure if I’m allowed to say how much as it’s not in any of the public articles I’ve read


#82

What happened with Monzo shares?