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Post by moneymagnet on Jan 11, 2019 17:20:24 GMT
I have been an investor in Ablrate for the past few years. I have done well with them and like the way they handle the platform. However, I've never invested with CC or any similar platform before. I've done some quick research over the last couple days online, but I am still unsure as to why investing in this pitch is a good idea.
Basically, it appears that you give CC money to give to Abl to use to accomplish the company expansion goals set forth in their pitch. There is no SM, so your money is locked in. If you invest enough funds, you will get a bonus to be used on Ablrate. There may be some tax benefits from investing.
The rest of it seems incredibly vague. Abl may or may not give some or all of your investment back with or without some gain completely at their descretion. If they do return any invested funds, it will be at a time of their choosing.
Do I have this right? If so, how is any of that a good deal? Wouldn't I be better off investing in a market tracker fund or continuing to invest in Abl loans directly where the conditions and benefits of the loans are clear to the lender? What's to keep Abl from buying us out after some time, having used our money to grow the business and then not sharing the gains with us?
I've been burned in the past with investments that are vague and hope to have become wise enough to avoid similar situations in the future . If this pitch were not from Abl, who I am familiar with, I wouldn't give it the time of day. However, as it is Abl, I want to give the pitch its due. Could anyone tell me if there are elements beneficial to lenders in this pitch that I have missed?
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Post by Proptechfish on Jan 11, 2019 17:53:41 GMT
moneymagnet, it's probably best not too look at startup equity offerings as your traditional monthly investment/return deal. Look at companies you know, you love, are willing to support to succeed in long term. Substantial returns within 5 years are very rare. Two thirds of Start ups statically fail within 5 years which will usually mean a total loss of investment. One exit route is to IPO but the fundamental financial burden is so high many profitable companies don't meet the bar to IPO anyway, these are are usually referred to as 'zombie companies'. I'm involved in a number of startup equity offerings but i psychologically write off the capital in the short/medium term not expecting my capital to be released or see a return. However, say you have 20 positions 15 might flop, 3 might break even/small return with an available exit after 5 years, but the one or two could deliver 20/30 times return after 5 or 6 years canceling out your other losses and walking away with a decent return. So you can't really look at startup equity on a short term basis and on a traditional short term return expectation, no offing will look like a good deal in that sense. It's a huge risk but get it right and it can be financially worthwhile, but equally as importantly IMO you are actively supporting a company you believe in.
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Post by moneymagnet on Jan 11, 2019 19:15:32 GMT
Thanks for the info Proptechfish. What you've said makes sense to me.
Now will I actually put funds into this pitch? I believe Ablrate is worth at least a punt. (They're far from Fumbling Stooges after all!) However, like others on the forum, I would prefer to wait until more information is ready to be disclosed regarding some of the precarious pub loans.
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Post by GSV3MIaC on Jan 11, 2019 21:18:52 GMT
I'll second that Proptechfish input .. basically I regard most EIS-able funding punts as a variant of charitable giving to causes I like. With a faint chance of winning the lottery.... well, getting a cash return at least. You get a 30% tax break on the way in, and then you have something interesting to watch. Riskier than P2P lending, and that's barely possible.
Ablrate looks like it might pay better than the Severn Valley Railway, but no free rides. 8>. Do not invest what you can't smile about losing. Ever.
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Post by welshman on Jan 14, 2019 16:38:43 GMT
moneymagnet , it's probably best not too look at startup equity offerings as your traditional monthly investment/return deal. Look at companies you know, you love, are willing to support to succeed in long term. Substantial returns within 5 years are very rare. Two thirds of Start ups statically fail within 5 years which will usually mean a total loss of investment. One exit route is to IPO but the fundamental financial burden is so high many profitable companies don't meet the bar to IPO anyway, these are are usually referred to as 'zombie companies'. I'm involved in a number of startup equity offerings but i psychologically write off the capital in the short/medium term not expecting my capital to be released or see a return. However, say you have 20 positions 15 might flop, 3 might break even/small return with an available exit after 5 years, but the one or two could deliver 20/30 times return after 5 or 6 years canceling out your other losses and walking away with a decent return. So you can't really look at startup equity on a short term basis and on a traditional short term return expectation, no offing will look like a good deal in that sense. It's a huge risk but get it right and it can be financially worthwhile, but equally as importantly IMO you are actively supporting a company you believe in. I agree with Proptechfish- EIS and especially SEIS is quite risky as most businesses are start ups and the majority go belly up, hence the 30% up front tax relief you get from these investments. However, the ones that do succeed can multiply many times which can easily offset the losses from the majority AND provided you keep shares for 3 years are free from CGT!!! However, this offering from Abl , is not a start up as they have been trading for a few years and are now making a small profit so there seems less chance of them going belly up which is good. Decision to make is whether the valuation at £26m is realistic or not?? If they expand as per the projections then the valuation is cheap but there again any business plan can look good on paper!! They say they have over £10m of new loans coming onto the platform in near future and provided these have some new borrowers then it should help the forecasts. I'm afraid I do not like the idea of a small company raising money and actually sponsoring none business events such as Abl is doing with the EuroTourPro golf - I do not know how much they spend on this but would query the value for money? Unlike lending on the platform - this is Risk capital and any investment should be made with view to not getting any return for a minimum of 3 yrs and more likely twice that time!! So far they have raised over £44k from 33 investors and target is £70k from platform users before it opens to general public so that is encouraging and it will be interesting to see how much they actually do raise by the end of february
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Post by ablrate on Jan 14, 2019 18:02:00 GMT
moneymagnet , it's probably best not too look at startup equity offerings as your traditional monthly investment/return deal. Look at companies you know, you love, are willing to support to succeed in long term. Substantial returns within 5 years are very rare. Two thirds of Start ups statically fail within 5 years which will usually mean a total loss of investment. One exit route is to IPO but the fundamental financial burden is so high many profitable companies don't meet the bar to IPO anyway, these are are usually referred to as 'zombie companies'. I'm involved in a number of startup equity offerings but i psychologically write off the capital in the short/medium term not expecting my capital to be released or see a return. However, say you have 20 positions 15 might flop, 3 might break even/small return with an available exit after 5 years, but the one or two could deliver 20/30 times return after 5 or 6 years canceling out your other losses and walking away with a decent return. So you can't really look at startup equity on a short term basis and on a traditional short term return expectation, no offing will look like a good deal in that sense. It's a huge risk but get it right and it can be financially worthwhile, but equally as importantly IMO you are actively supporting a company you believe in. I agree with Proptechfish- EIS and especially SEIS is quite risky as most businesses are start ups and the majority go belly up, hence the 30% up front tax relief you get from these investments. However, the ones that do succeed can multiply many times which can easily offset the losses from the majority AND provided you keep shares for 3 years are free from CGT!!! However, this offering from Abl , is not a start up as they have been trading for a few years and are now making a small profit so there seems less chance of them going belly up which is good. Decision to make is whether the valuation at £26m is realistic or not?? If they expand as per the projections then the valuation is cheap but there again any business plan can look good on paper!! They say they have over £10m of new loans coming onto the platform in near future and provided these have some new borrowers then it should help the forecasts. I'm afraid I do not like the idea of a small company raising money and actually sponsoring none business events such as Abl is doing with the EuroTourPro golf - I do not know how much they spend on this but would query the value for money? Unlike lending on the platform - this is Risk capital and any investment should be made with view to not getting any return for a minimum of 3 yrs and more likely twice that time!! So far they have raised over £44k from 33 investors and target is £70k from platform users before it opens to general public so that is encouraging and it will be interesting to see how much they actually do raise by the end of february The sponsorship of the PGA Europro tour was paid out of revenue and is not as much as you would imagine. Our analysis of the sponsorship deal is that it has paid for itself easily, or we wouldn't do it.
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Post by Ace on Jan 18, 2019 9:18:27 GMT
Equity raise has now crossed the 20% raised barrier, so presumably will be going public imminently.
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blender
Member of DD Central
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Post by blender on Jan 18, 2019 9:37:15 GMT
Equity raise has now crossed the 20% raised barrier, so presumably will be going public imminently. Pleased to hear that.
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Post by welshman on Jan 18, 2019 12:50:23 GMT
Brilliant news - with 44 investors from Ablrate lenders it gives confidence that Abl getting it right.
Will be interesting once it open to all Crowdcube investors as could also add more users to the platform when people understand what they do!!
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Post by ablrate on Jan 18, 2019 13:00:51 GMT
Thanks all
If any of you want to help promote it, DM us your mail address and we will send you a unique link and we will reward you for any investments that come through your link... I am sure we can think of something suitable!
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Post by welshman on Jan 20, 2019 18:16:50 GMT
I see that according to Crowdcube the funding is still not open to General Public even though £88250 (25%) - which is fantastic - raised with 36 days left!!
When will it be opened to everyone else?
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Post by ablrate on Jan 21, 2019 9:45:37 GMT
I see that according to Crowdcube the funding is still not open to General Public even though £88250 (25%) - which is fantastic - raised with 36 days left!! When will it be opened to everyone else? Firstly, thanks for those of you who have invested. Even now, 4 years later, we have always found it quite humbling when people have the confidence to invest in loans and our shares. We could go public now, but we want to keep it private for the moment as we have some press etc to create a bit of momentum when its live.
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boundah
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Post by boundah on Jan 21, 2019 10:10:11 GMT
ablrate - By my layman's reading of the rules relating to what may be eligible for EIS (and I paraphrase): the money raised by the new share issue must be used for a 'qualifying business activity'. Certain 'trades' are excluded. A trade is not a qualifying trade if it consists, at any time in the relevant period, of certain activities. The list of non-qualifying trades includes banking, insurance, money-lending, debt-factoring, hire-purchase financing or other financial activities (VCM 3040; ITA07/S192(1)(c); ITA07/S303(1)(c) ). The ‘other’ financial activities that are excluded are activities comparable with those listed - in particular, ones involving the lending of money or the bearing of the customer’s financial risk. I'm quite sure you have taken reliable legal advice, and I am certainly no expert. But surely Ablrate's main business involves the lending of money? Happy to be shot down by Ablrate or anyone more knowledgeable than I am, as I'd like to participate in the share offering.
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Post by GSV3MIaC on Jan 21, 2019 10:13:11 GMT
If you wait much longer it'll be all sold out. 8>.
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ilmoro
Member of DD Central
'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 21, 2019 10:23:54 GMT
ablrate - By my layman's reading of the rules relating to what may be eligible for EIS (and I paraphrase): the money raised by the new share issue must be used for a 'qualifying business activity'. Certain 'trades' are excluded. A trade is not a qualifying trade if it consists, at any time in the relevant period, of certain activities. The list of non-qualifying trades includes banking, insurance, money-lending, debt-factoring, hire-purchase financing or other financial activities (VCM 3040; ITA07/S192(1)(c); ITA07/S303(1)(c) ). The ‘other’ financial activities that are excluded are activities comparable with those listed - in particular, ones involving the lending of money or the bearing of the customer’s financial risk. I'm quite sure you have taken reliable legal advice, and I am certainly no expert. But surely Ablrate's main business involves the lending of money? Happy to be shot down by Ablrate or anyone more knowledgeable than I am, as I'd like to participate in the share offering. They aren't lending money, we are and bearing the risk. They are providing a platform to facilitate that and managing the process. I am guessing that, as other platforms who have raised were EIS, the distinction is sufficient.
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