A notice to our Crowdcube investors 🤗

(Ben Green) #17

I’m very happy with that answer :grinning:

(Alex) #18

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 don’t want to be trying to get loads of small payments from 1000 odd small investors!

(Fin) #19

A completely fair point, and if I wasn’t already a shareholder it’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 I’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.

I’m not sure if there’s any potential to expand the £2m allocated to ‘the crowd’ - but that would seem one way of appeasing both groups of investor.

(Sacha) #20

I’m another one who hopes that those who had the faster fingers in the last fundraising don’t necessarily have priority to the detriment of those who haven’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.

(Stephen Early) #21

Hmm. I received the explanatory email from Tom, but haven’t received anything from WCS Nominees. Is anyone else still waiting for that email?

(tom) #22

Every shareholder has pre-emption rights, but it’s normal in a funding round for those pre-emption rights to be disapplied. This is done by special resolution, and it requires the approval of at least 75% of shareholders.

Resolution 4
"That, subject to the passing of resolutions 1, 2 and 3, all and any rights of pre-emption whether under the New Articles (in particular article 10.2) or otherwise be and are hereby waived in respect of the allotment and issue of shares in the capital of the Company up to the maximum aggregate nominal amount set out in resolution 2."

Maintain our participation ( resist dilution )
:newspaper: Monzo, a UK digital-only bank, is closing in on new funding - TechCrunch
(Ben Green) #23

It’s understandable that a little dilution of share amount can happen in the initial stages, but once Monzo is able to stand on it’s own two feet without requiring any further fundraising after launching the full bank, it’ll quite quickly grow organically. Therefore the value of each share will be much much higher than it is now and you would then still be able get your return and more.

Monzo hopes to reach, or even exceed, its aspirations of 1 billion account holders worldwide and will remove the limit of a total £50,000 balance. It might grow at steady rate or maybe exponentially - the skys the limit. Nobody knows at this point what might happen though.

(Fin) #24

That’s kind of irrelevant I’m afraid. A “a little dilution is understandable” attitude isn’t a justifiable reason to dilute current shareholders in favour of new ones (unless you’re a new one…).

(Alex) #25

Thanks for the quick and informative reply Tom!

That seems like a very sensible clause and will provide the required flexibility now and protection in the future.

Onwards and upwards!

(Ben Green) #26

Hmm, that just sounds greedy to me. It’s the beginning of one of the same problems afflicting the big banks - shareholder greed.

(Alex Sherwood) #27

Business Insider just published a story about this fundraising

App-only bank Monzo valued at £50 million in ‘interim’ £4.8 million funding round

(Fin) #28

Remind me why you want to invest?

(Ben Green) #30

As a future source of income, but not at the detriment of preventing others from investing. Otherwise I’d be contributing the same state within Monzo investors that our country is in. The rich get richer while the poor get poorer, or at least find it more difficult to get a foothold.

That too, thanks @-removed-. We’re already a part as alpha or beta users, but to be an investor would also allow me to say to friends and family that I had a financial stake in the building the best bank on the planet. Something to be proud of.

If we all do well, rather than a select chosen few, then Monzo has greater potential do well as a whole and that ultimately benefits everyone - shareholders and general account holders alike :smile:

I’ll leave it there as Tom as already stated not even he knows how the next round of funding will work. Plus I don’t wan’t to start a civil war :disappointed_relieved:

(Brexit Day Is Gonna Be Shamayzing.) #31

I want to buy in

(Fin) #32

That’s not contradictory at all.

To be clear, I’ve never advocated allowing current investors to invest at the detriment of new investors, simply that those who supported the company in its early stages should be afforded the opportunity to protect their investment from dilution – two very different things. We’ve just been diluted by 10% which isn’t insignificant by the way.

I’m also not sure this is a debate about rich getting richer, poor getting poorer. If stereotypes are anything to go by, initial Crowdcube investors are anything but rich. Millennials (Monzo’s target demographic) aren’t exactly rolling in it these days, and given your appetite to invest, I’d assume you don’t fall into the “poor getting poorer” category – but don’t let that get in the way of your argument. Also, “select chosen few”!? Lucky few who set their alarm clocks for 12pm and furiously hit refresh on their browsers would seem more appropriate, but again, probably not biased enough.

For the record, I sincerely hope you, and anyone else that wans to, are able to invest next year.

(Ben Green) #33

Cool, we can agree then :thumbsup: :slight_smile:


as investors we were aware of this possibility when we invested

(Dan) #36

I think you’ve both taken his words out of context here.

He clearly didn’t lack the knowledge and was aware of the possibility - he’s talking about it.

His comments are regarding preemption rights and why existing shareholders should be entitled to them. Without them, they risk their % stake in the company eroding through further funding. It’s not dilatation he has the issue with, it’s @beningreenjam’s argument that investors should just accept the dilution, without the preemptive rights.

(Ben Green) #37

Woah! Lol, I never had a problem with existing investors getting first dibs, as I stated here -

Just to clarify - I appreciate the input from existing investors and support their opportunity to get first pick in the future rounds, but would be against them taking everything before wannabe investors get a chance to buy.

(Dan) #38

Apologies, my words are assumptive.

I should of said:

“it’s @beningreenjam’s argument that investors should just accept the dilution, without the preemptive rights - if there are no shares left after existing shareholders purchase their own.”