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Post by ablrate on Jan 9, 2019 18:25:35 GMT
Does it really matter which platform a company chooses for fundraising? I'm a novice in off-exchange sharedealing but would have thought the quality of the underlying business is what counts. Of course there will be quite a few losses/failures but isn't that the nature of start-up investing? IMO yes. Equity platforms don't make huge profits and if CC are facing legal action (possibly multiples) then that undermines the financial stability of the platform. If the worse was was to happen where would that leave the equity investments that have been made under CC's nominatition. Possibly lost in the eather. If anything like happened... we would still have a list of investors underlying the nominee... so it wouldn't affect holdings.
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Post by Proptechfish on Jan 9, 2019 18:28:37 GMT
IMO yes. Equity platforms don't make huge profits and if CC are facing legal action (possibly multiples) then that undermines the financial stability of the platform. If the worse was was to happen where would that leave the equity investments that have been made under CC's nominatition. Possibly lost in the eather. If anything like happened... we would still have a list of investors underlying the nominee... so it wouldn't affect holdings. Ok that's slightly more reassuring
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Post by Butch Cassidy on Jan 9, 2019 18:36:16 GMT
Personally would have preferred that they had launched with Seedrs, as it appears CC still has some questions to answer but leaving that to one side. Valuation (Abl on 15x revenues + upto 3% cashback) looks quite strong compared to similar platforms that I'm already a shareholder in; with AC 2.5x but with a 15% discount/bonus & Crowdproperty at 8x, not to say it's still not reasonable but certainly not too generous for new investors, given the inherent risks.
Overall I'm undecided but will likely only have a token investment if at all given the outlook for P2P is getting more problematic in general & I was unhappy with the recent unilateral way that they gave the brewery an overly generous refinancing.
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Jan 9, 2019 18:46:57 GMT
Does it really matter which platform a company chooses for fundraising? I'm a novice in off-exchange sharedealing but would have thought the quality of the underlying business is what counts. Of course there will be quite a few losses/failures but isn't that the nature of start-up investing? I guess the argument being made is how the platform handles due diligence on the information presented to investors that enables to assess risk. The charge being made by FECF is that CC in particular aren't very good at policing the info companies provide leading to exaggerated claims being made. At the risk of getting Ozboy excited, it's on a par to allegations being made against RICS valuations on lending platforms ... some platforms allow borrower friendly valuations to be presented. Otherwise you are right ... investing in early stage businesses is high risk but it shouldn't matter which platform quality companies raise on. One big difference is Seedrs have an SM and shares have to have pre-emotion rights ... though I note that ABL shares do have that on CC. CC also has upfront fees now.
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wysiati
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Post by wysiati on Jan 9, 2019 21:33:00 GMT
One big difference is Seedrs have an SM and shares have to have pre-emotion rights ... though I note that ABL shares do have that on CC. CC also has upfront fees now. Just to note - even with the presence of pre-emption rights there is scope for a company to seek to dis-apply these using any relevant provisions in the company articles and Seedrs, AIUI, may, at its discretion, support this stance for nominee holdings.
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TitoPuente
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Post by TitoPuente on Jan 9, 2019 21:43:16 GMT
Does it really matter which platform a company chooses for fundraising? I'm a novice in off-exchange sharedealing but would have thought the quality of the underlying business is what counts. Of course there will be quite a few losses/failures but isn't that the nature of start-up investing? I guess the argument being made is how the platform handles due diligence on the information presented to investors that enables to assess risk. The charge being made by FECF is that CC in particular aren't very good at policing the info companies provide leading to exaggerated claims being made. At the risk of getting Ozboy excited, it's on a par to allegations being made against RICS valuations on lending platforms ... some platforms allow borrower friendly valuations to be presented. Otherwise you are right ... investing in early stage businesses is high risk but it shouldn't matter which platform quality companies raise on. One big difference is Seedrs have an SM and shares have to have pre-emotion rights ... though I note that ABL shares do have that on CC. CC also has upfront fees now. CC's record applying their DD charter is appalling and they will potentially end up in the courts being sued for misrepresentation, gross negligence and fraud (who knows). However, the issue IMHO is that Ablrate should pride themselves for their due diligence capabilities but they have chosen an ECF vehicle that fails all due diligence best practices.
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wysiati
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Post by wysiati on Jan 9, 2019 21:55:59 GMT
Syndicate room is a more professional EIS platform Perhaps, but as a business their own recent 30% down round and how it was handled seems rather less professional. They missed their own targets for 2017 revenues (latest available) stated in the 2015 business plan by >80% IIRC and it turned out they had shut down what had been due to be a material new part of the business without telling all their investors. Such performance would normally see the company responsible publicly eviscerated on FECF, but in this case... not a peep. My impression is not helped by the SR platform CEO writing public articles purporting to advise other companies how to conduct themselves but seemingly failing to carry out his own advice.
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Post by ablrate on Jan 10, 2019 10:43:03 GMT
I am not sure that issues you are discussing about CC are relevant to us. I can imagine if you were looking at a gadget manufacturer that was started yesterday by a couple of whiz kids asking for investment at a zillion valuation.... I get it... choose the best due dil platform. As an FCA firm it would be suicide for us to to talk cobblers on the pitch. We were asked for, and provided, evidence of all the claims we have made on our 'pitch' and have been realistic about projections. Unfortunately, there is a lot of tosh talked by some firms in this space when raising money, with little to back it up, we have increased revenue year on year by over 150% and have plans in place now to scale further... various announcements over the next month will make this clear.
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dandy
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Post by dandy on Jan 10, 2019 11:03:23 GMT
I think the choice of platform is fine. Crowdcube are older and bigger than Seedrs and have a bigger audience. If CC were so bad then the likes of Monzo and Revolut would not have used them. Ultimately there is only so much the platforms can do - they don't run the companies being promoted. Both are regulated by FCA so clearly have the same obligation to verify claims.
Also Seedrs charge 7.5% of any profit on sale. They do have a secondary market but it should really be called a 'cancellation policy' as all you can do is sell your shares at cost price (unless a new round with new valuation happens years down the line) - so not really a market that finds the real value of the shares being traded.
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blender
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Post by blender on Jan 11, 2019 11:37:01 GMT
...
A high risk punt, if you ask me. That's not to say "AVOID", of course - if you fancy a flutter then why not? But I'd be very clear that it would be a flutter rather than an investment.
It is tough to counter comments here because of the 'financial promotion' rules. So forgive me if i don't comment on opinion. I am not being rude or ignoring it, but we can only respond with information. The opinion has to be yours.So to answer the points: ... 3. Recovery has always been a priority and anyone who has been with us for any length of time will know that we are not too bad at it. M** is almost done, the Fishing loan is the same, the containers are in court (finally) and the pubs will have some news shortly which may change your view. I said earlier that I would not comment on the fund raise until we had a resolution on the pubs. Pubs are addressed here, and need a reply. Firstly, on 'recovery' we all know that past performance should not be taken as a predictor of future performance. If it could then it might follow that past performance in overhanging, or dangling future carrots, could also be predictive of current or future dangling of carrots. Secondly, there have been no recoveries on M** and the fishing loan because they have never been defaulted, as so it is misleading to suggest that they are indicators of current performance on recoveries. On the pubs, news has been coming shortly for a long time, so let's have that news now. The view-changing part is opinion and more carrot-dangling, not information. There are six pub loans in trouble, and on none of them do the lenders have any idea of how or when the principal will be repaid. 67&68 are in administration but the loans have not been defaulted, so no losses have been declared. 85 has been unilaterally reconstructed so that the borrower has greatly reduced monthly repayments, and one repayment has been falsely marked as paid when it is outstanding according to the admin notes. The repayment schedule is contrary to the addendum. The other three, seem to have had one repayment marked as paid in each case, with a reference to admin notes which do not exist. This is misleading because the contractual repayments have not been paid, and istm that the unpaid amount might have been moved to a later payment, without any notice to lenders. Four of these loans are, in my opinion, presented with a misleading status, at a time when particular care should be given to avoiding accidental lack of accuracy and transparency. So let's have that news, as information, and let's have the opportunity to change our view, or form a view. I am not suggesting that people base their decisions on investment on just this one issue. I have not read the pitch, yet.
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nw99
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Post by nw99 on Jan 11, 2019 12:23:44 GMT
Well said Blender my thoughts entirely until we know where we are on the defaults cannot put any new money to work
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blender
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Post by blender on Jan 11, 2019 13:06:22 GMT
I should have said that the way that Ablrate has handled the fishing loan, M**, and the defaulted 21 is good, imo. Containers are not visible to me.
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zedi
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Post by zedi on Jan 11, 2019 13:19:15 GMT
If CC were so bad then the likes of Monzo and Revolut would not have used them. Ultimately there is only so much the platforms can do - they don't run the companies being promoted. Both are regulated by FCA so clearly have the same obligation to verify claims. Also Seedrs charge 7.5% of any profit on sale. They do have a secondary market but it should really be called a 'cancellation policy' as all you can do is sell your shares at cost price (unless a new round with new valuation happens years down the line) - so not really a market that finds the real value of the shares being traded. CC can´t be that bad because Monzo and Revolut used it? What kind of logic is that? Monzo and Revolut don´t care whether the average investor makes money on CC or not, just like any other start-up. Just because an attractive start-up is choosing CC doesn´t mean CC is a good place for investors, it can also just be a good place for raising money (which usually is a bad place for those who supply that money) or getting attention (which IMHO is one of the main reason "attractive" start-ups are using crowdfunding instead of traditional VCs). Seedrs charges 7.5% on profits (probably most pitches won´t be profitable in the long run on any crowdfunding site) and it´s expensive but at least the interests of the platform are aligned with the investor´s interests. CC is also expensive if you calculate all fees but their interests are certainly not aligned with yours because they earn with each successfull raise (that´s why FECF always makes fun about CC´s definition of "success"-> as soon as they get their upfront fee, a start-up is a success for CC). Seedrs provides as the only crowdfunding platform (AFAIK) the option of an early exit for investors. Of course they cannot guarantee liquidity and also trading is only possible at fair value at the moment (and there are good reasons for that) but it´s a great feature and they are developping it further. In addition to the SM, the post-pitch communication on Seedrs is on a totally different level compared to CC and the user-interface much better as well. Other people already commented on DD and pre-emption rights, which are also advantages on Seedrs. Ablrate is an interesting platform (the valuation seems a bit high but not totally bloated) but I won´t invest on CC anymore, I totally focus on Seedrs.
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Post by ablrate on Jan 11, 2019 13:28:29 GMT
It is tough to counter comments here because of the 'financial promotion' rules. So forgive me if i don't comment on opinion. I am not being rude or ignoring it, but we can only respond with information. The opinion has to be yours.So to answer the points: ... 3. Recovery has always been a priority and anyone who has been with us for any length of time will know that we are not too bad at it. M** is almost done, the Fishing loan is the same, the containers are in court (finally) and the pubs will have some news shortly which may change your view.
blenderI said earlier that I would not comment on the fund raise until we had a resolution on the pubs. Pubs are addressed here, and need a reply. -There will be something soon, we have spent considerable time working things out and will be letting everyone know soon. There has been background events that have given us different options. Basically we are awaiting agreement for our proposals
Firstly, on 'recovery' we all know that past performance should not be taken as a predictor of future performance. If it could then it might follow that past performance in overhanging, or dangling future carrots, could also be predictive of current or future dangling of carrots. -not sure what you mean, but get the gist.
Secondly, there have been no recoveries on M** and the fishing loan because they have never been defaulted, as so it is misleading to suggest that they are indicators of current performance on recoveries. -Recoveries/delinquent, they maybe technically different, but they are the same to us... behind and in need of recovery... . If we had said we had 'no defaults' we would have been accused of misleading people...
On the pubs, news has been coming shortly for a long time, so let's have that news now. The view-changing part is opinion and more carrot-dangling, not information. There are six pub loans in trouble, and on none of them do the lenders have any idea of how or when the principal will be repaid. 67&68 are in administration but the loans have not been defaulted, so no losses have been declared. 85 has been unilaterally reconstructed so that the borrower has greatly reduced monthly repayments, and one repayment has been falsely marked as paid when it is outstanding according to the admin notes. The repayment schedule is contrary to the addendum. The other three, seem to have had one repayment marked as paid in each case, with a reference to admin notes which do not exist. This is misleading because the contractual repayments have not been paid, and istm that the unpaid amount might have been moved to a later payment, without any notice to lenders. Four of these loans are, in my opinion, presented with a misleading status, at a time when particular care should be given to avoiding accidental lack of accuracy and transparency. - These issues are not something we can be flippant about and give opinion on what might happen. It has been a complex situation that has required patience and a great deal of information gathering, negotiation and man hours. We deal in facts, not fictional recovery and until something is agreed properly and correctly, then there is little value for lenders or us in dealing with opinion. The raise is a separate issue and certainly will not influence what and when we tell lenders about these loans. We are working things through correctly and will let lenders know at the appropriate time. This is not something that is on the back burner, it is something that is a major priority and we will have news very shortly, but no sooner than we are convinced of solid proposals.
-Reference not defaulting loans, a knee-jerk reaction to defaults or delinquency is likely never going to be the best result for lenders. We have been talking, waiting and gathering data and that will allow us to do the best for all lenders, which believe is what lenders would expect us to do.
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blender
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Post by blender on Jan 11, 2019 15:24:28 GMT
Thank you, ablrate, for taking the trouble to reply to some of my points. They should be seen in the context of lending a significant sum since early 2015, which continues.
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