Crowdcube request to change Investor Nominee Terms


(Jamie 🏳️‍🌈) #228

CrowdCube talks about “working closely”. Monzo doesn’t.

To me, that’s just spin. And bad spin, at that.

The clues are in what Monzo isn’t saying, for once.


#229

Ah, I’ve just re read @cookywook’s post, and it sounds like they worked closely on the clarification, rather than the t’s and c’s - I misread that at the time!

It’s still a bit of an ApplePay situation of “we’ll never really know”…


(Justin) #230


(Jessica ) #231

The Nielsen Daily News Digest isn’t painting a good picture on this - “Monzo shareholders are facing an overhaul on the terms of their investment, under which Crowdcube would be able to charge fees for handling transactions and sell their shares without prior consultation.”

Please can someone confirm if this is true as I’m rapidly loosing faith in Monzo?


(Splodf) #232

If you haven’t had an email you already subscribe to these terms.


(Lyndsey Sharpe) #233

Ah man that’s annoying as hell. Should have read the terms more carefully, though tbh don’t remember them being issued


#234

This is true. Although that are “saying” they won’t but you are trusting them to keep their word, when they’ve not been particularly transparent about this.


(Josh Lindl) #235

I’ve voted no and have put the maximum in at every round. However, despite the sentiment here, I suspect this may still go through. The reason for that is alot of Monzo employees bought shares via the Crowdfund so if there is an internal three line whip (whether implicit or explicit) then it will probably go ahead.


#236

Is it legal to tell employees how to vote their shares? It certainly wouldn’t be ethical. Can’t imagine Monzo risking it.


#237

I cannot imagine Monzo ordering its employees to vote against their interest.


(Josh Lindl) #238

I imagine less of a tell and more of an all-hands meeting where the benefits are highlighted - unformity and speed of action in an IPO/aquistion etc that crowdcube have tried to spin. But you are probably right, even commenting to this effect may not be allowed. My company recently had an employee buyout (to move to the john lewis model) and senior leadership were verrrry restricted on what could be said (i.e. said nothing)


(Josh Lindl) #239

That said, can still imagine a case where employees feel its the right thing to go along with it


#240

Anyway - is anyone going to tell us the benefits, or are we all just voting No?

@Hannah_Crowdcube Anything you can clarify?


#241

There is no benefits :joy: Responses from Crowdcube have been lacklustre, and opaque.


#242

I’m still hoping that @Hannah_Crowdcube will address the questions asked by @Investor_No1 and @saf. I suspect that the counting process will not be independently audited. Shall we start doing a progressive share count?


(Kenny Grant) #243

Just for reference, for Crowdcube and Monzo, here’s how I (r2 investor) would have preferred this be handled, telling me the what, when, and why of these changes:

  • Give a brief summary of why the changes are necessary (nothing above tells me this IMO)
  • Set out clearly what has been changed, with a diff between the two sets of terms (new, old).
  • Ideally state clearly why each point has been changed or added - there are only 11!
  • Tell us when it may happen (this was fine)

For the why, I’d rather hear something like ‘This will prepare us for any potential future sale of shares in public markets’ or similar, not ‘we want everyone on the same terms’ which is something of a tautology.

For the what, I’d rather a breakdown of what has changed (and ideally why each point), not the claim that they are substantially similar (some of them certainly are, some of them certainly are not). The new terms differ significantly - the old terms have 6 points, the new terms have 11 points, including one specifically on fees and expenses. I find it hard to reconcile this statement:

There is nothing in the new terms that could leave you worse off… This means that in exceptional circumstances we could deduct money from proceeds we receive to distribute to shareholders

With these terms (in new, but not in old terms as far as I can see):

Crowdcube may from time to time charge the Investor fees and expenses for providing the services under this Agreement.

I’d prefer if the section on fees were far more specific, the word exceptional is not used in the terms for example, in fact the legal terms make charges sound rather regular (from time to time, fees and expenses). I completely understand why your lawyers would advise you to write it this way (maximum leeway), and I hope you equally understand why nobody would want to accept such broad terms applying to an investment in retrospect, even with assurances after the fact (which would of course have no legal weight).

Or this clause:

This Agreement may not be amended…without prior written consent…the consent of the Investor shall not be required where Crowdcube deems such change or restatement, in its absolute discretion, to be in the best interests of the Investors as a whole.

Which gives you a lot of leeway to amend the agreement without the consent of investors. Again I see why your lawyers inserted the clause but not how it benefits those you have an agreement with.

Thanks for the reassurances though on the intentions of crowdcube to charge fees - you have pointed out that you view that as a clause to be used only for exceptional cases like an international transaction fee, which is reassuring (though I can’t think how an investor could compel you to pay them in the currency of their choice). I would rather such reassurances were in the legal document though.


(Josh Lindl) #244

Quote from a city m&a lawyer after I just sent him the relevant docs “You’re basically giving up your shareholder rights but are still on hook for anything bad that happens“


(Jason Artemis Winstanley) #245

This one line has made me think about selling the shares I have from the last round. I now entirely want rid of Crowdcube from my life.


(Josh Lindl) #246

A further quote from him on the below is: “that’s actual madness”…”not even sure thats a possible thing”

  • This Agreement may not be amended…without prior written consent…the consent of the Investor shall not be required where Crowdcube deems such change or restatement, in its absolute discretion, to be in the best interests of the Investors as a whole.

(Josh Lindl) #247

And on

  • Crowdcube may from time to time charge the Investor fees and expenses for providing the services under this Agreement.

“Defo would have pushed back on that. Why should you pay them? Monzo should”