A notice to our Crowdcube investors šŸ¤—

Monzo Chat
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Hey everyone!

If youā€™re one of our investors from the Crowdcube round back in February, today you should be receiving an email with some exciting news ā€“ today we closed an interim fundraise of Ā£4.8m.

Passion Capital have supported us with this extra capital, mainly so that we can ramp up the roll out of our Beta cards in the face of huge, unexpected demand :+1:

Excitingly, this fundraise puts our latest valuation at Ā£50m and the value of your shares has gone up accordingly :slight_smile:

Most importantly, we are already planning the next, much bigger, fundraise (around Ā£15m in early 2017), and will certainly include a sizeable crowdfunding portion. As our existing investors, of course weā€™ll give you plenty of notice for that round and would love you to participate!

Your ongoing support means the world to us, building Monzo wouldnā€™t be possible without our investors and wider community :raised_hands:

Any questions, feel free to ask here!

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Great! :smile: Could you also possibly make a big fanfare to the community, not just current investors, as there may be others on here that are willing to invest (me, me me :wave:)

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Great news :slight_smile:

Two questions -

  1. do we have to sign and return the Nominee Instruction document?
  2. I also received a ā€œbuyback agreementā€ document from Crowdcube, but it seems to be for two people that are most certainly not me :confused:
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Thanks Bailey and well done Monzo - one question about the notice - it asked us to print/sign/and return ā€˜the resolutonsā€™ - could you clarify what it is we are signing to?

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agree, but with first chance for existing investors

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But of course! Weā€™ll let everyone know :slight_smile:

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Great to see! As a possible, future investor, is there a minimum amount I have to invest?

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We need to pass a handful of ā€œShareholder Resolutionsā€ to approve the fundraising and also repurchase shares from early employees whoā€™ve left the company. These resolutions pass when 75% of shareholders have agreed. As of now, weā€™ve received positive confirmation from 96% of shareholders. Weā€™ve also circulated new Articles of Association.

You donā€™t need to take any action if you donā€™t want to, and the investment will go ahead. If youā€™d like to express your support for the the resolutions, you should sign and return the document called ā€œNominee Instructions - Written Resolutionsā€ to WCS at the address provided.

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It would be nice to get a ā€œwhat does this document actually meanā€ sheet for those not versed in legalese.

As a total layman, my interpretation (which may be wildly incorrect) is:

  • Articles of association: updated with references to shares created as part of this new investment round
  • Buy Back Agreement: Appears to be an odd method of creating the new shares by Monzo selling them to itself? Could also be an agreement for the shares to be returned in the event the deal with Passion Capital does not go ahead, but the Ā£0.01 price does not appear to reflect this.
  • Crowdcube Investor letter: This oneā€™s easy, go and read it yourself!
  • Nominee Instruction - Sign and return to provide your agreement that this investment ground can go forward (i.e. the new shares can be created), and appears to include a clause that you also agree to further rounds up to a certain value (listed as Ā£0.6203955, which may be per share?)

::EDIT:: Hah, pipped at the post! My guess for the buyback way way off then.

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Tom,

Will sign and return this evening

Richie

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Fantastic! I have a couple of questions.

I understand that the value has increased, but does this interim round mean our shareholding will be reduced?

Will existing shareholders be able to retain their percentage through reinvestment in the round at the beginning of next year or will it just be first come first served?

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The investor letter attached to the email states that existing investors will be first in line to invest, should they wish to do so.

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Your absolute number of shares remains the same. You purchased each share at Ā£0.5133, and they are now valued (on paper) at Ā£0.7737 each. So the total value of your shareholding has increased by more than 50%.

Because a new investment round involves the creation of additional shares, the percentage of the company that each existing shareholder owns is reduced by a small amount, which is what people call ā€œdilutionā€.

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Thanks for the clarification, Tom.

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Thatā€™s understandable - gotta reward the early bird believers, provided others arenā€™t prevented from buying shares too.

@tom or @bailey, is there an imposed limit to how many shares anyone (existing investor or not) can buy per round?

Just slightly concerned over the existing investors being permitted the opportunity to buy all the available shares amongst themselves before the wannabe investors get a look in. That would be extremely frustrating!

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We absolutely want to be fair to both existing investors and other members of the community who havenā€™t yet had the chance to invest.

In all honesty, weā€™ve not finalised the plans for the next crowdfunding round yet. It will likely be in the first few months of 2017 and around Ā£2-3m will be available.

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Iā€™m very happy with that answer :grinning:

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Hi Tom,

I was under the impression we had preemption rights with the shares, have these been waived on our behalf by Crowdcube?

What are the conditions required for this and might it continued to be used in the future?

More curious than anything, I think the dilution is acceptable and understand you donā€™t want to be trying to get loads of small payments from 1000 odd small investors!

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A completely fair point, and if I wasnā€™t already a shareholder itā€™s a view I would share. But the counter-argument to that is that existing shareholders who participated in the initial fundraising round before most people even knew about Monzo should be allowed the opportunity to protect their initial investment from dilution (which Iā€™m thrilled to see they are).

However, if you go down the road of massively restricting the amount that those at the front of the queue are allowed to invest it kind of defeats the point.

Iā€™m not sure if thereā€™s any potential to expand the Ā£2m allocated to ā€˜the crowdā€™ - but that would seem one way of appeasing both groups of investor.

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Iā€™m another one who hopes that those who had the faster fingers in the last fundraising donā€™t necessarily have priority to the detriment of those who havenā€™t been able to invest yet.

Perhaps users who have been using the alpha/beta card for a few months could be given a small priority window; this would ensure that those who have been genuinely helping to test the product have a good chance of investing over those who are just jumping on the fintech bandwagon.

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