Sugru - investing in startups carries risk!


(Vladislav Kozub) #11

@HannahCrowdcube, could you please clarify this one? My card would be classified as “rest of the world”.

My thinking was that as per https://www.gov.uk/government/news/card-surcharge-ban-means-no-more-nasty-surprises-for-shoppers, charges are not allowed in the UK and EEA from January 2018.

As per “rest of the world”, Regulation 4 of The Consumer Rights (Payment Surcharges) Regulations 2012 would have to apply.

Thank you!


(Hannah) #12

Hello @Vlad, these charges are only incurred by the company that is raising funds. We do not charge any kind of fees to investors for making an investment.


(Vladislav Kozub) #13

Thank you for responding. @Rob / @Viktor, any chance you could advise on the following?

Does it mean Freetrade is charging additional payment processing fees?

Thanks!


(Hannah) #14

No, Stripe (the payment processing service) charges Freetrade for each payment taken. No fees are charged to investors from us, Freetrade or Stripe.


(Vladislav Kozub) #15

Okay, so dumb question coming now:

If I invest £10 with a card registered in Antarctica, I, as an investor, will have received all shared equivalent to the value of £10 but Freetrade will only get =£10-CrowdcubeFee@7%-StripeFee@2.9%. Am I correct?

Thank you!


(Hannah) #16

Yes that is correct :blush:


(Viktor) #17

Adam just shared this VC article on Sugru: https://medium.com/@robinklein/sugru-an-investment-failure-but-worldwide-success-1948774db579

Interesting take-aways for me:

we lost most of our investment

So they recouped a little bit of it - VCs might have had different terms than crowdfunding investors? :thinking:

To build mainstream awareness for Sugru, along with mass retail distribution, takes much longer, and requires more investment than any of us imagined.

To me, marketing really makes or breaks startups in 2018.


#18

It’s up to all of us to get Freetrade out there and known (and adopted) … but I might leave the bulk of the marketing to you guys :thinking:


(Viktor) #19

That’s fine. :+1::muscle:

My point was more about how much startups tend to underestimate marketing.

:nerd_face: Somewhat related: andrewchen.co/paid-marketing-addiction/ :nerd_face:


(Vladislav Kozub) #21

Make sure to return these 10% back to the taxman :wink:


(Vladislav Kozub) #23

You knew what I meant! :yum:


(Viktor) #25

I’m tempted to dig into this and maybe share what I find, if any useful. Marketing costs could be low with a huge following, but I don’t know what I don’t know.


#27

I’m more than happy to provide any guidance Freetrade would like to ask of me. :sunglasses:

Stephens guide to running a business (follow at your own risk)
Rule #1 focus on your product/service/offering
Rule #2 make people aware of your product/service/offering
Rule #3 get it out to market
Rule #4 don’t try to be what you’re not
Rule #5 spend the money where it is needed not where your pet interest is (i.e. No Sugru you don’t need the latest in server technology and ERP software that costs £500,000+ just use a damn spreadsheet for now)
Rule #6 make your business scalable
Rule #7 make your community richer!

I personally like rule #7


Freetrade’s CrowdCube Fundraise
(Viktor) #28

Did they really spend £500k on ERP? Even without context, that sounds like a poor decision to me.

This article is trying to say that Sugru “almost crowdfunded itself to death”, whatever that means.

To me it’s hard to see how crowdfunding was an issue here, as it sounds like an execution issue. Not different from most of these extremely costly VC-funded startup failures.


#30

There’s talk about misleading claims and poor due diligence on

Not sure whether it’s enough evidence for those claims.

Good to see the product live on but feel bad for the investors, last fundraise was last year or something.


#32

I feel bad for the hard working staff, after all their effort and years of work their options are worth £0 - the selling price was below the option threshold and so they get nothing.

Some members of staff even took salary cuts so they could have more options, they lost out twice. :slightly_frowning_face:


#33

I didn’t know that. The lack of transparency is another thing I’ve noticed as well as CrowdCube and Sugru spinning this as a success, when it’s clearly not.


#34

If I remember correctly, they mentioned implementing SAP Business One in one of their updates.


#35

When did that happen?


#37

Based off what the email they sent out said, I saw a snippet, it said something to the effect of the company has been sold to one of the worlds leading etc with the difficult news is the low price…

Additionally there was some Tweets which also lent more towards it’s good news.

I get that in some ways it’s good news, the product lives on, investors got some money back. However, overall the whole way it played out has poor optics and I’m saying that as someone who has committed a good chunk of money in startups on CrowdCube, including in Crowdcube itself.