bigfoot12
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Post by bigfoot12 on Feb 3, 2015 16:23:43 GMT
I think there's a world of difference between Syndicateroom / seedrs / crowdcube on the one hand and THC on the other The former are definitely high risk high potential gain operations, mainly into startup businesses. You could lose everything, you could multiply your investment 10fold. THC have 80 people each putting £1k into a buy to let property. OK it's structured as a single company and investors receive a share, but it's hard to imagine a complete loss, it feels to me much more like a loan with an expectation of a 10%+ return. ie I think it's pedantic and unhelpful to put THC in this category. I disagree. I think that if THC isn't in this section it shouldn't be on the site at all. I agree that Crowd funders are risky, but I don't think that THC is very safe. The total fund raise is much higher than the value of the property. Some properties are a mixture of debt and equity. Equity funders will find themselves far down the queue. Some of the properties are 'difficult' properties which would be hard to raise a mortgage on and so will be hard to sell in a distressed situation. I want THC to be on this site so in this section seems to be the right place.
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bigfoot12
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Post by bigfoot12 on Feb 3, 2015 17:44:06 GMT
I'll report back on how things go with them if it turns out people are actually interested. If nothing else, this discussion has prompted me to email a couple of the entrepeneurs that I haven't heard from in a few months to see how things are going with my businesses, so thank you bigfoot12  You're welcome. And yes I am interested. If you see any info I'd love to hear it. I have seen quite a bit of research about investing in start-ups, but it pre-dates the explosion in crowd funding. It will be interesting to see how it develops and how comparable the returns are.
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Post by elljay on Feb 3, 2015 18:40:35 GMT
Re the definitions - I'm not a financial advisor (or an accountant, or a lawyer...), so no problem with someone explaining why my reasoning is broken, but this was my thinking: P2P = loans to individuals. P2B = loans to businesses. Equity funding = buying a share of something. THC describe themselves as "...The structure used to accomplish this means you are actually investing in shares in a Special Purpose Vehicle...". EstateGuru say "With EstateGuru you can start from 50 euros by borrowing [lending?!] it out towards loans secured by real estate.", so yes, they don't sound like equity finding so have moved them out of the Equities area. Property Moose says "As you hold legal shares in the company that owns a specific property...". |
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Post by elljay on Feb 3, 2015 18:43:43 GMT
Have set up a board for Syndicate Room here. |
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Post by bracknellboy on Feb 3, 2015 20:46:36 GMT
Re the definitions - I'm not a financial advisor (or an accountant, or a lawyer...), so no problem with someone explaining why my reasoning is broken, but this was my thinking: P2P = loans to individuals. P2B = loans to businesses. Equity funding = buying a share of something. THC describe themselves as "...The structure used to accomplish this means you are actually investing in shares in a Special Purpose Vehicle...". EstateGuru say "With EstateGuru you can start from 50 euros by borrowing [lending?!] it out towards loans secured by real estate.", so yes, they don't sound like equity finding so have moved them out of the Equities area. Property Moose says "As you hold legal shares in the company that owns a specific property...". so is it time to change our url to "p2bp2pefindependentforum.com" ? Just asking.
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Post by elljay on Feb 3, 2015 22:53:18 GMT
Or p2xindependentforum.com?  |
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webwiz
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Post by webwiz on Feb 4, 2015 17:17:31 GMT
Re the definitions - I'm not a financial advisor (or an accountant, or a lawyer...), so no problem with someone explaining why my reasoning is broken, but this was my thinking: P2P = loans to individuals. P2B = loans to businesses. Equity funding = buying a share of something. THC describe themselves as "...The structure used to accomplish this means you are actually investing in shares in a Special Purpose Vehicle...". EstateGuru say "With EstateGuru you can start from 50 euros by borrowing [lending?!] it out towards loans secured by real estate.", so yes, they don't sound like equity finding so have moved them out of the Equities area. Property Moose says "As you hold legal shares in the company that owns a specific property...". And what about crowdfunding. I suppose they can all be included under the umbrella "alternative investments". And which are being considered for ISA eligibility?
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bigfoot12
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Post by bigfoot12 on Feb 4, 2015 17:48:17 GMT
And what about crowdfunding. I suppose they can all be included under the umbrella "alternative investments". And which are being considered for ISA eligibility? If you mean companies like kickstarter I don't think that they count as investments at all. They are generally pre-selling a product before they make it. Or is there something else out there that I haven't come across (or forgotten about)?
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Post by elljay on Feb 4, 2015 17:53:21 GMT
"Crowdfunding" seems to be able to be used to mean either "funding by lots of people" or "funding a business start up". The second falls into either P2B or Equity Funding I guess depending on the specifics.
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ejohn
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Post by ejohn on Feb 11, 2015 20:54:34 GMT
On the subject of terminology, I notice the FCA have started to refine their own definitions. They have identified two main categories - loan based crowdfunding (which would cover p2p and p2b) and investment based crowdfunding which would cover anything where you have a share.
Having the two classifications of the word crowdfunding seems reasonably meaningful. It saves me time explaining p2p, p2b, p2x, crowdlending, crowdleasing, equity based crowdfunding, crowdequity, and other similar terms!!!!
The FCA have also tightened the rules (or is it enforced them?) on exactly who can invest. We now seem to have three categories Sophisticated investor, High Net Worth Investor and a restricted investor who certifies they will not invest any more that 10% of their investible resources. The bureaucracy part is that you are supposed to confirm which one you are every 12 months.
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j
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Post by j on Feb 12, 2015 18:20:00 GMT
In terms of THC & PM, I think the implication that they are more than mid-risk is at least slightly questionable. Nothing is risk-free...totally agreed but, they tend to buy props at already discounted prices, in areas (mainly) which are much cheaper than the national average & are backed by a rental yield in high renting areas.
Barring a complete & utter crash in the housing market (I do think a correction is due though), if one is happy to hold on for the long term & simply collect the yield till the time is right to sell, it is probably a much safer investment than many others out there. The key issue here is long termism. I do hold a few quid in THC btw & stopped when I realised the total return was actually fairly lower than the headline rates. Their wording caught many of us investors unawares till it was broken down very clearly by their main man Frazer. They still seem to go from strength to strength regardless & I am not surprised, they are a good option to get into property for small capital holders &/or wider diversification. It's not a bad option to have nonetheless as a small part of a balanced investment portfolio
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ramblin rose
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“Some people grumble that roses have thorns; I am grateful that thorns have roses.” — Alphonse Karr
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Post by ramblin rose on Feb 12, 2015 19:13:01 GMT
In terms of THC & PM, I think the implication that they are more than mid-risk is at least slightly questionable. Nothing is risk-free...totally agreed but, they tend to buy props at already discounted prices, in areas (mainly) which are much cheaper than the national average & are backed by a rental yield in high renting areas. Barring a complete & utter crash in the housing market (I do think a correction is due though), if one is happy to hold on for the long term & simply collect the yield till the time is right to sell, it is probably a much safer investment than many others out there. The key issue here is long termism. I do hold a few quid in THC btw & stopped when I realised the total return was actually fairly lower than the headline rates. Their wording caught many of us investors unawares till it was broken down very clearly by their main man Frazer. They still seem to go from strength to strength regardless & I am not surprised, they are a good option to get into property for small capital holders &/or wider diversification. It's not a bad option to have nonetheless as a small part of a balanced investment portfolio You could say the same thing of a fair number of quoted stocks and shares - prices supported by good regular income from sources that barring an earthquake or armageddon aren't going to dry up, but as a member of a risky asset class they're still classed as risky, and so they should be. It's just the name of the game.
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mikeb
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Post by mikeb on Feb 12, 2015 19:27:50 GMT
The FCA have also tightened the rules (or is it enforced them?) on exactly who can invest. We now seem to have three categories Sophisticated investor, High Net Worth Investor and a restricted investor who certifies they will not invest any more that 10% of their investible resources. The bureaucracy part is that you are supposed to confirm which one you are every 12 months. So having moved the goalposts once the game has started, what exactly happens when, 12 months in, you get one of these forms and tick (D) None of the above? Forced to liquidate your position until you are back at 10%? Possibly incurring losses (for which the FCA will shoulder shrug ... ) Forced to acquire more wealth until you are at 10%? Possibly ending up with a record for the bank robbery Fined? (Platform, or investor?) Other crazier alternatives? Or just a big fat "Tut tut, well don't do that " advisory letter? When I joined THC, there was no such rule in place, and you had to be a HNW, or SI, or a member of our special interest group of < 150 people sent this offer. And that 10%, is that per institution, or P2P/P2B/Equity as a total blob?
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bigfoot12
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Post by bigfoot12 on Feb 12, 2015 21:19:42 GMT
The FCA have also tightened the rules (or is it enforced them?) on exactly who can invest. We now seem to have three categories Sophisticated investor, High Net Worth Investor and a restricted investor who certifies they will not invest any more that 10% of their investible resources. The bureaucracy part is that you are supposed to confirm which one you are every 12 months. So having moved the goalposts once the game has started, what exactly happens when, 12 months in, you get one of these forms and tick (D) None of the above? Forced to liquidate your position until you are back at 10%? Possibly incurring losses (for which the FCA will shoulder shrug ... ) Forced to acquire more wealth until you are at 10%? Possibly ending up with a record for the bank robbery Fined? (Platform, or investor?) Other crazier alternatives? Or just a big fat "Tut tut, well don't do that " advisory letter? When I joined THC, there was no such rule in place, and you had to be a HNW, or SI, or a member of our special interest group of < 150 people sent this offer. And that 10%, is that per institution, or P2P/P2B/Equity as a total blob? The 10% rule is the total of your holdings in all non-readily realisable securities so I don't think that includes most lending as it isn't a security and wouldn't include any listed securities. I think that if you can't sign the form the next year the firm can no longer offer you any new products. (They are not normally allowed to offer you these products, signing the form gives them an exemption for a year.) You would not have to sell anything.
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j
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Post by j on Feb 12, 2015 21:34:31 GMT
You could say the same thing of a fair number of quoted stocks and shares - prices supported by good regular income from sources that barring an earthquake or armageddon aren't going to dry up, but as a member of a risky asset class they're still classed as risky, and so they should be. It's just the name of the game. I won't argue with your logic Rosie. When I invested in stocks (or tried in vain to make some money out of it more correctly!) I had some yielding 5-7% in divi alone, then a crash/correction happens & a blanket downward movement brings many good stocks down. I'm not in any now (barring one total write-off) but will patiently wait over the next 6-18 months when I think a major correction will happen (my own outlook obviously) & will start re-investing in stocks I like once more.
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