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Post by wiseclerk on Mar 13, 2015 11:55:20 GMT
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Post by Financial Thing on Jul 19, 2015 18:19:33 GMT
wiseclerk whats your opinion of the dilution risk? Could these companies issue more shares diluting your equity stake?
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Post by wiseclerk on Jul 19, 2015 18:30:00 GMT
All investments at Seedrs are protected against dilution. That means, when a new round comes, you are offered to invest into as many new shares as needed to keep your previous shareholder percentage in the company. Of course if you want to make use of that option, that means with a rising valuation you might have to invest much more than initially just to keep from getting diluted. I have for example invested into Landbay through Seedrs. There have been following rounds with higher valuation and existing shareholders have been offered in (non-public) pre-emption rounds to invest into new shares to avoid dilution. I hope that answers your question? |
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Post by Financial Thing on Jul 19, 2015 23:53:39 GMT
Makes sense. Appreciate the feedback.
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kaya
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Post by kaya on Dec 18, 2015 15:10:16 GMT
I know nothing about equity. If you invest an equal amount into every pitch that you like, what would your expected returns be, if anything, after 1/2/3/4/5 years, in terms of (1) cash dividends and (2)shares? I mean, what would the expected average return be over time?
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bigfoot12
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Post by bigfoot12 on Dec 18, 2015 17:05:39 GMT
I know nothing about equity. It isn't my strength either, but it is a bit more fun that debt so I have had the 'odd go' over the last few years. what would your expected returns be, if anything, after 1/2/3/4/5 years, in terms of (1) cash dividends Zero. A slight exaggeration but in general the companies on platforms such as Seedrs (this is a seedrs thread) are start up or high growth. Any spare cash is likely to be re-invested in the business. Most investors want higher growth rather than dividends. This is partly because most of the investments have a tax wrapper such as (S)EIS in which dividends are taxed normally, but any capital gains should be tax free if the investment is held for long enough. what would your expected returns be, if anything, after 1/2/3/4/5 years, in terms of shares? I mean, what would the expected average return be over time? If you buy EIS or SEIS shares, to get the benefit you would need to hold them for at least 3 years. If you sell before this time you would normally lose the initial tax credit. So don't expect any cash return within 3 years. Longer than that I don't know. I think that in most cases it would be unlikely that you would have a cash exit within 5 years. Your shares might be notionally much more valuable than they were when you bought them, but you probably wouldn't be able to sell them. I might have picked unwisely, but almost everything I have picked has taken much longer to get to where they wanted to be, and/or sales are much slower, or they have discovered a problem with the design. From Seedrs and co I haven't heard of many exits. There have been a couple of reports looking at Angel investing, but whether or not the current batch of investments open to us is similar is a moot point.
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kaya
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Post by kaya on Dec 19, 2015 11:16:26 GMT
So is investing in equity start-ups basically a philanthropical act, a 'charity' donation almost, for when you have spare cash which you simply have no need for?
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bigfoot12
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Post by bigfoot12 on Dec 19, 2015 12:13:58 GMT
So is investing in equity start-ups basically a philanthropical act, a 'charity' donation almost, for when you have spare cash which you simply have no need for? No, but it is speculative, illiquid long term investment and there is a short history and little else to compare it to. I had assumed that it might be five years before I saw a return. Two years in and it still looks like it might be five years before I see a return, and those are the successful looking ones. According to the report I trust most I should expect almost all of my returns to come from about 1 in 10 of my investments. That one has to do very well to pay for the 50% or so that I expect to lose me money.
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Post by jimmyhoffa on Nov 27, 2016 6:09:29 GMT
So is investing in equity start-ups basically a philanthropical act, a 'charity' donation almost, for when you have spare cash which you simply have no need for? I think it's best to see it that way. You are throwing money into a pond and forgetting about it. Not really, of course—it's good to track it somewhere, but these investments are so risky that you shouldn't really count them as part of your assets. Your money is going deep undercover. But every once in a while you'll get a return on some of the money, and in theory if you diversify enough you will occasionally get a windfall. In a way, charity is kind of like that, but on a much larger and longer scale. In the case of charity, you are throwing your money into a much larger pond, and the returns on your money are reaped by the rest of humanity (or by troubled individuals) rather than your personal gain.
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bigfoot12
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Post by bigfoot12 on Nov 29, 2016 8:49:17 GMT
wiseclerk - I'd love to read your next update. You must have been in for 3 years by now.
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Post by wiseclerk on Nov 29, 2016 9:20:10 GMT
Patience as there is not that much news to report. No exits for me yet. From the portfolio view in the dashboard: By state: 99.33% active; 0.67% winding up (on that front I am doing okay, I think) Portfolio value: +45.62% These are not "real" gains, but just a figure based on the Seedrs method for calculating that display value. Not much use; maybe only to keep track if it is moving in the right direction over time or comparing two different portfolios. Looking back so far, I am satisfied with the development of 4 of my 5 largest investments and the fifth one is actually perfoming good too, I think - there is just a bit more uncertainty to how that one will evolve. Overall there is a vast span of how frequent, active and detailed the 30+ startups, which I have invested in, engage with their crowd investors after the pitch closes (of course they are all very attentive before the pitch closes). bigfoot12 are you investing on Seedrs? What are your experiences? Anybody that uses Seedrs and maybe have invested more widespread or in other sectors than me (I am heavy on Finance), I Invite to write a guest post for P2P-Banking.com. Just message me for a chat. |
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Post by Deleted on Nov 29, 2016 17:35:38 GMT
Only been in the pond for 6 months or so, but interesting to read
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bigfoot12
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Post by bigfoot12 on Dec 1, 2016 15:17:24 GMT
bigfoot12 are you investing on Seedrs? What are your experiences? Anybody that uses Seedrs and maybe have invested more widespread or in other sectors than me (I am heavy on Finance), I Invite to write a guest post for P2P-Banking.com. Just message me for a chat. My experience with Seedrs is much smaller in both quantity and time scale than you. I first invested about 18 months ago and have 3 active investments, plus another which hasn't finished DD yet. The return is showing +14%, but that is just one company. I have invested in other companies over 3 years, mainly on Syndicate Room. My estimate of total return (not annualised) is +7%. This is my very conservative estimate; I will be disappointed if the valuation is as low as I have marked it. I have 4 marked with a value of zero, which I think is probably fair. A (too) high proportion of my early investments were medical or life sciences. Almost every single one of these has required more money and more time than originally forecast. I have resolved not to invest in any additional medical/life science companies until I have an exit from one of them. Edit: made clear that I am not investing in new medtech companies, rather than not increasing my investments in existing ones.
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Post by wiseclerk on Dec 2, 2016 8:11:51 GMT
More money required than originally forecasted is a typical occurrence in startups  Whether to invest in follow-up rounds is debateable. The possibl upside is lower as the valuation will have risen already, but the risk should be a bit lower, as the company will have gained a little traction and you have a little more information on their performance. I have done so with some of my best picks, but I want to avoid to get to heavy concentrated on these. A degree of diversification is desirable for equity investments too. |
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kermie
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Post by kermie on Dec 2, 2016 15:26:56 GMT
Interesting to read, wiseclerk. I started investing a little via Seedrs back in 05/2015 - about 18 months ago now. I've invested relatively steadily over that period; of the 66 businesses I'm in today, 3 are winding up and the rest (63) are active/raising. I wouldn't expect any exits for a couple of more years at least. It is relatively early days for the portfolio - my bigger investments have not yet gone through any further funding rounds, so will still on paper be "worth" their last round valuation, which dampens my paper gains. I'm sitting on a notional +1%, but I read very little into that at this stage. I am UK based, so have an EIS/SEIS tax cushion on most investments. |
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