Hmm. I received the explanatory email from Tom, but havenāt received anything from WCS Nominees. Is anyone else still waiting for that email?
Every shareholder has pre-emption rights, but itās 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
āThat, 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.ā
Itās understandable that a little dilution of share amount can happen in the initial stages, but once Monzo is able to stand on itās own two feet without requiring any further fundraising after launching the full bank, itāll 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 Ā£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.
Thatās kind of irrelevant Iām afraid. A āa little dilution is understandableā attitude isnāt a justifiable reason to dilute current shareholders in favour of new ones (unless youāre a new oneā¦).
2 Likes
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!
Hmm, that just sounds greedy to me. Itās the beginning of one of the same problems afflicting the big banks - shareholder greed.
Business Insider just published a story about this fundraising
App-only bank Monzo valued at Ā£50 million in āinterimā Ā£4.8 million funding round
2 Likes
Remind me why you want to invest?
2 Likes
As a future source of income, but not at the detriment of preventing others from investing. Otherwise Iād 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-. Weāre 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 
Iāll leave it there as Tom as already stated not even he knows how the next round of funding will work. Plus I donāt wanāt to start a civil war 
1 Like
I want to buy in
3 Likes
Thatās not contradictory at all.
To be clear, Iāve 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 ā two very different things. Weāve just been diluted by 10% which isnāt insignificant by the way.
Iām 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 (Monzoās target demographic) arenāt exactly rolling in it these days, and given your appetite to invest, Iād assume you donāt fall into the āpoor getting poorerā category ā but donāt let that get in the way of your argument. Also, āselect chosen fewā!? 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.
5 Likes
Cool, we can agree then 
as investors we were aware of this possibility when we invested
2 Likes
I think youāve both taken his words out of context here.
He clearly didnāt lack the knowledge and was aware of the possibility - heās 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. Itās not dilatation he has the issue with, itās @beningreenjamās argument that investors should just accept the dilution, without the preemptive rights.
2 Likes
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.
Apologies, my words are assumptive.
I should of said:
āitās @beningreenjamās argument that investors should just accept the dilution, without the preemptive rights - if there are no shares left after existing shareholders purchase their own.ā
No problem. I think weāre hopefully coming to agreement and itās all been civil so no apologies necessary.
The first and only round so far reached its target in 96 seconds so a little concern for opportunities of prospective investors is justified. However the next round is expected to be double or even triple that of last time so hopefully wonāt be an issue.
Is it possible for existing card holders to pre-invest using our cards? I really want to invest on the next round as I missed out last time. Iād really like to put aside a certain amount on my card that is authorised for investing in Monzo as soon as I can.
4 Likes
Existing holder here. Not overly impressed with this placing. Here me and @anon95680666 were debating whether the 2017 fundraising will be at Ā£100m or higher valuation with all the progress made, and youāve slipped in a sizeable dilution to insiders without opening it to the market to find the real valuation. It is slightly shocking that youāve had to suddenly negotiate a ābailoutā at what i personally believe to be a low valuation, without time to open it up to other investors. If it had been foreseen you could have added crowdfunding and other investors and easily got a much higher valuation and therefore less dilution.
I donāt think you can say shares are now worth more. The implied valuation is 50% higher, but look at Powa and their implied valuations going up by 50% every time their investor gang topped up until it went pop. You can only really say shares have gone up if they are tradeable and they are trading higher. The only thing you can say for certain is that you have overspent and been forced to heavily dilute.
Not baulking at a āhigher valuationā but i really look forward to the day you open your valuation to market perception rather than undervaluing yourselves.
3 Likes
here
please donāt think Im trying to teach anybody to suck eggs - but as far as I understand - as a crowd cube investor myself
Not sure I agree with āheavily dilutedā - every funding round will see original investors shares diluted - depending on what position Monzo is in this will decide the dilution that Monzo has to sacrifice - bearing in mind it is the founders shareholding as well that gets diluted so they want a good strong deal for their benefit as well , if it was for 10% this time - or 20% or 30% it would see the original crowd cube shares being worth .0003 (was it ? , cant remember) now after dilution being worth 0.00027 , 0.00024 or 0.00021 of a much bigger pie.
If Monzo goes from 50,000 users to 200,000 users in an accelerated timescale because of this extra funding provided by Passion everybody benefits , and to deal with one investor providing Ā£4.8m rather than 4800 investors with a grand is obviously far easier for Monzo, albeit possibly disappointing for some previous crowd cube investors wishing to retain their original level of stake.
It will obviously be a very touchy subject on the next funding round, if as Monzo suggests its going to be another part public offering- which worked so well as an advertising platform for Mondo last time, to not P off original crowd cube investors wanting to keep their stake level , and at the same time not P off people that wanted to invest but didnāt get the opportunity, and not P off new investors - good luck with that team Monzo
3 Likes