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Post by solicitorious on Feb 26, 2015 16:36:31 GMT
Please only answer if you have given it some considered thought. Don't just wildly guess, or give way to wishful thinking.  And please ignore any EIS tax breaks. |
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niceguy37
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Post by niceguy37 on Feb 26, 2015 16:43:38 GMT
I wonder if you need a few more options such as 1.25 x and 1.5 x initial investment.
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Post by solicitorious on Feb 26, 2015 16:50:27 GMT
I wonder if you need a few more options such as 1.25 x and 1.5 x initial investment. Mmm, don't think I can edit it now. I guess you'll have to go with either break even or 2x. 
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Post by pepperpot on Feb 26, 2015 18:57:36 GMT
I've given it a fair amount of consideration, and have no idea where to pin the tail, sorry. It's a sliding scale, depending on performance. There is the possibility of it being north of 10x, but could equally be worth it's equivalent weight in old rope should there be a mass breakout of leaky pipes.
Going off the "£100m loan book by the end of 14" prediction being at least half right, I'm hoping for the upper end.
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Post by mrclondon on Feb 26, 2015 20:14:33 GMT
If you assume the approach of the valuation being directly proportional to the cumulative loans written is true now, and will still be true in four years time, then for the valuation to be 10x what it is today (the absolute value today is irrelevant) in four years time the cumulative loans would be c. 10x what it is today i.e. £600m. If AC can write in the next 4 years £80m, £110m, £150m, £200m of loans respectively (total £540m) then the £600m of cumulative loans would be achieved 4 years from now. However I'm far from sure such a valuation methodology would be applicable in four years times if the growth rate in the loan book was as modest as my example above, which is a small fraction of the growth AC themselves are predicting. If that kind of growth is achievable profitably over the four years then who knows ? So to answer the OP, I've given it some considered thought, but still made a wild guess. Sorry 
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mikes1531
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Post by mikes1531 on Feb 26, 2015 21:46:55 GMT
If you assume the approach of the valuation being directly proportional to the cumulative loans written is true now, and will still be true in four years time, then ... However I'm far from sure such a valuation methodology would be applicable in four years times if the growth rate in the loan book was as modest as my example above, which is a small fraction of the growth AC themselves are predicting. So to answer the OP, I've given it some considered thought, but still made a wild guess. Sorry I don't see how that valuation approach could be true in four years. I'm not even sure it's true now. Does anyone here think Zopa would be valued at £750M if they had an IPO today? I certainly don't! Like mrclondon, I think any valuation -- now or in four years -- would be very sensitive to loan book growth rate. AC have very ambitious plans, and the question is whether they can deliver. They fell rather short of their £100M goal for the end of 2014, and I have my doubts whether they can achieve £1B by the end of next year as I believe they're hoping to. I'm not even sure they can meet their short-term goals. Somewhere -- possibly in a P2PIF thread -- I thought I remember AC suggesting they were going to be writing £6M/month of loans (or possibly even an amount in double-digits) in the next month or so. The total of Upcoming Loans, however, is less than £3M at the moment, and if it takes about a month on average to progress from a loan being completely funded by underwriters -- and thus appearing on the Upcoming Loans list -- to drawdown, that would produce loans at a rate of £3M/month. I also see that there is only £2.3M of loans on the active list with loan numbers higher than the infamous #146 (SCP&M) which drew down back in November. No doubt AC have much better visibility of their loan pipeline than I do, but the results seem rather slow to appear. I have enough confidence in AC that I'm participating in the Seedrs fund raising, but I'm really uncertain about what AC's growth rate will turn out to be. Since that has such a great influence on AC's valuation, I don't feel I can make even a wild guess for the poll after considered thought.
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jjc
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Post by jjc on Feb 27, 2015 12:08:16 GMT
Upside impossible to call really, so many unknowns. Before counting unhatched chickens worth investors considering the downside risks too perhaps - part & parcel of private equity investing. I’d personally put the risk of capital losses well into double figure % terms. This is marginal in the context of PE, but worth bearing in mind. AC execution risks & other less controllable external factors (political / regulatory/ financial market risks) the main concerns. Good luck to all, wherever it goes.
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Post by stuartassetzcapital on Feb 27, 2015 17:03:23 GMT
Upside impossible to call really, so many unknowns. Before counting their unhatched chickens worth investors perhaps considering the downside risks too - part & parcel of private equity investing. I’d personally put the risk of capital losses well into double figure % terms. This is marginal in the context of PE, but worth bearing in mind. AC execution risks & other less controllable external factors (political / regulatory/ financial market risks) the main concerns. Good luck to all, wherever it goes. Hopefully our news and deal flow over the next few months will see this become a clearer answer in due course. The team is really focussed on us becoming one of the next big financial institutions and that will help the multiple above.
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Post by solicitorious on Mar 8, 2015 18:54:09 GMT
Now down to the last £1/2 million available. Another big pledge of £25k just made, IIUC.
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pikestaff
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Post by pikestaff on Mar 8, 2015 23:26:49 GMT
The most likely individual outcome, statistically, must be a loss because the profitable outcomes have been split up but the lossmaking outcomes have not. (If I was an optimist I might say that the chance of a loss is, say, 40% and the chance of a profit of some kind is 60% but I've no idea how much profit.) That alone would be enough for me to vote for a loss.
I'm not actually that optimistic. This type of investment is always over-hyped...
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Post by solicitorious on Mar 8, 2015 23:45:04 GMT
After 20 votes the average forecast is close to 4x with the median perhaps closer to 3x... pikestaffCan you elaborate on what you mean by "the profitable outcomes have been split up but the lossmaking outcomes have not"? |
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Post by pepperpot on Mar 8, 2015 23:50:29 GMT
I just hope it's equally over-hyped when I get a chance to cash it in! |
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bigfoot12
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Post by bigfoot12 on Mar 8, 2015 23:52:29 GMT
pikestaffCan you elaborate on what you mean by "the profitable outcomes have been split up but the lossmaking outcomes have not"? All the different types of loss are in one box. But all the different winning outcomes are split between 6 or 7 outcomes. If this was a summer fair guess the weight of the cake type competition the rational choice would be to bet on the loss. Pikestaff might think that expected outcome is positive, merely skewed.
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Post by pepperpot on Mar 8, 2015 23:54:11 GMT
After 20 votes the average forecast is close to 4x with the median perhaps closer to 3x... pikestaffCan you elaborate on what you mean by "the profitable outcomes have been split up but the lossmaking outcomes have not"? i.e. there is no option for -1%, -2%, -3%, -10% (-100%, eek!) etc to mirror the positives listed. edit; crossed with bigfoot12
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Post by solicitorious on Mar 9, 2015 0:09:15 GMT
After 20 votes the average forecast is close to 4x with the median perhaps closer to 3x... pikestaffCan you elaborate on what you mean by "the profitable outcomes have been split up but the lossmaking outcomes have not"? i.e. there is no option for -1%, -2%, -3%, -10% (-100%, eek!) etc to mirror the positives listed. edit; crossed with bigfoot12 Not sure how my (admittedly imperfect) survey design can impact on the actual fortunes of AC...
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