Hi everyone,
Following some questions we have received in response to the email sent to investors regarding changes in the nominee terms, we wanted to address some of the frequently asked questions raised in this thread. Please accept our apologies for the delay in putting this response together with Monzo. As always, if you have any further queries, I’d be more than happy to help - please email me at support@crowdcube.com, and I’ll come back to you directly.
Firstly, please be assured that there will be no change to your shareholding, as Crowdcube Nominees has always been and will continue to be the holder of the legal title to your shares. This is the case for all of Monzo’s funding rounds with Crowdcube.
For reference, please find the existing Declaration of Trust here. You will see that most of the terms remain the same, if not identical.
We would also like to confirm that the vote for this proposed change closes on 18 March 2019, so please do take your time making your decision.
Did Monzo have prior warning about this vote?
Yes, we have worked closely with Monzo to coordinate this, we and Monzo saw the benefit of all investors being on these new improved terms.
Are there any disadvantages to investors that may result from the changes proposed?
There are no disadvantages to investors from these changes. Many of the terms are exactly the same. Crowdcube Nominees still holds the shares, but it does so as a completely passive holding company. Crowdcube Capital, which is authorised by the Financial Conduct Authority to hold third-party assets on behalf of investors, enters into a contract with investors. In practice, the situation is the same.
Apart from the benefits mentioned, is there anything else that is changing? For example, is Crowdcube going to charge investors for holding their shares?
There is nothing in the new terms that could leave you worse off. Crowdcube is not going to charge you for holding your shares in Monzo, except in the unlikely scenario mentioned in the next FAQ.
One point states that Crowdcube may from time to time charge the Investor fees and expenses for providing the services under this Agreement. Any such fees and expenses shall be exclusive of any fees and expenses which are covered by the Investor Terms. Can you clarify this?
Under the previous terms, some expenses were deductible; this new clause would allow for it in different circumstances. This means that in exceptional circumstances we could deduct money from proceeds we receive to distribute to shareholders, for example, charging an international transaction fee in the event of an exit for an international investor.
We will not charge investors for providing services under this Agreement in normal circumstances. However, if there is a particular transaction where Crowdcube is required to incur material costs or carry out a large amount of work on behalf of investors, then we will need to cover those costs/work. We would notify investors and Monzo before charging any such fees or expenses.
What happens if I don’t vote?
If a majority (weighted by shares) vote in favour, the new terms will apply to everyone.
Am I signing over full rights to control over my shares sale to acquisition?
No, you are not signing full rights to control over your shares on an acquisition. Please see our response a little further below about a sale of the shares.
Will these terms now apply to all companies that I hold shares in via the Crowdcube nominee structure?
This particular vote only applies to Monzo shares. If you have invested in another company on Crowdcube where your shares are held by a nominee, those shares would continue to be held in line with the terms that apply to that investment.
Am I going to lose my individual voice and will Crowdcube now be using one collective voice instead?
There is no change to your shareholding; Crowdcube Nominees has always been and will continue to be the holder of the legal title to your shares. The nominee holds the shares on trust for you, the beneficial owner, and Crowdcube will administer the holding on the terms set out in the Investor Terms and Monzo’s Articles of Association to safeguard your rights and entitlements. You may find this article, which provides further information about Crowdcube’s nominee structure, helpful.
Can Crowdcube use the value of our shares held in their trust to cover any losses they might incur for fraud, negligence or breach of the terms?
This term has not changed and was included in the existing Declaration of Trust.
Does Crowdcube have the authority to sell the shares on our behalf if they deem it to be in the best interests of crowdfunding investors as a whole?
If there is a potential sale of the whole company, or there is an opportunity for investors to sell some of their shares, we will always seek to ask Monzo investors to vote on the matter. If there is a sale that is clearly in the best interests of shareholders, and which depended on a very quick execution, then we would not want to prevent that transaction from happening, or for Monzo investors to miss out on the opportunity. We have allowed for this situation, but in reality, this is very unlikely and we would always want to seek investors views on how they wished to proceed.
Is Monzo charged any ongoing fees for holding shares under the Crowdcube nominee?
There is no ongoing fee being paid by Monzo, this structure was included in the fee associated with their recent fundraise.
I hope that helps addresses some of the questions raised here. Of course, if you have any further queries, please don’t hesitate to get in touch.
Thank you,
Hannah
Community Executive at Crowdcube