Crowdcube request to change Investor Nominee Terms


(Brad) #44

The latest raise already agreed to these terms at the time of the raise. Its only us investors involved in prior crowdfunding rounds that are being asked to vote on the change of terms because our investments are governed by old terms which Monzo seem to have decided are unfavourable to them.


(Gio) #45

I think we should organise, here’s a few suggestions on steps to take in order to move forward:

  1. Start by understanding what actually changes from the previous to the new terms. And what remains the same.
  2. For each change, provide pros and cons.
  3. Based on the changes, elaborate a list of questions.
  4. Send the questions to Crowdcube and share the response with the community.
  5. Re-evaluate, and if necessary go back to step 2.
  6. Vote.

(Dan) #46

this :point_up_2:t2:


(Nick) #47

Crowdcube.

It’s Crowdcube who want to change the terms you have with them, not Monzo.


(Gio) #48

Please, remember there is no rush to vote. Let’s make an informed decision and not act on impulse.

We have a solid community here, I’m sure we’ll be able to reach a consensus. Even if not, at least establish exactly the consequences of the suggested changes.


(Brad) #49

This may be a change of investor relationship with Crowdcube but I fail to believe that Monzo is not aware of this and did not have a part to play in it. These terms make it easier for Monzo to manage Crowdcube investors because they only need to obtain agreement from Crowdcube going forward and not the individuals.

I also hold a number of other investments that are currently with Crowdcube Nominees and this change has not been implemented across the board, only with Monzo. However, I will admit that it would not surprise me if this happens to my other investments too.


#50

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.

Would this mean they can do the annoying 7% fee they do on Seedrs?


(Gio) #51

Tried to email support@crowdcube.com which is the suggested email on the poll pitch and got this:

Asked for a link to the previous Nominee terms to be sure I’m looking and the right document, but . . .

Anyone has a link to the previous terms? (and know for a fact it’s the right one?)


(Sajid Sabir) #52

10. Fees and expenses

(a) 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.

When they want to change something and they highlight all the good things then you know something doesn’t feel right. NO vote from me, not letting Crowdcube have control over my shares, charge me additional fees and then if it all goes wrong have no liability.


(Samuel Parkinson) #54

Here are the previous declarations of trust, as PDFs. Would be good to get them into text so we can compare them to the proposed declaration.

Declaration of Trust, 2017-11-15

Declaration of Trust, 2017-03-27


#55

Crowdcube may instruct the Nominee to vote on any resolution on which the Nominee is entitled to vote or give or withhold its consent to any matter where the Nominee’s consent is required, whether following a Notification or otherwise, except where expressly provided otherwise in this Agreement.

Looks like you give up the voting rights on the shares.


(Nick) #56

I don’t believe Monzo shareholders through Crowdcube have ever had voting rights.


#57

I don’t believe that’s correct. The shares are entirely equivalent to the ones the investor group invested in. The only difference was a classification was introduced to define the two groups in the last Articles update a few months ago.

If a decision requiring investor consent on the same terms as the investors was needed, such as using pre-emption rights up for a new investment we would get that as investors, no matter how much of a pain it was to Crowdcube or Monzo. Now it looks like this is trying to take that away in the name of costs.


(Gio) #58

With a simple diff between the trust declarations of 11-2017 and 03-2017 I came to the conclusion that they are both the same. Not sure about the first round terms though.


#59

I don’t get why anyone would vote yes to this. It provides such a ridiculous amount of amguity that gives Crowdcube so much more power to charge fees, and take away decision making powers we currently have.

Any agreement with this level of ambiguity favours the one making the terms, which is Crowdcube. (e.g when are fees charged, exactly. On what? How much? What counts as ‘discretion’ when pre-emption rights are waived? The new agreement mentiones ‘costs’ alot but never mentions any amounts besides the 5 gbp dividend minimum which isn’t even a cost. It’s asking a lot to vote yes. Then there’s the whole thing where you waive most of your voting rights you currently have.


(Nick) #60

Read the linked declarations above. IANAL but I believe they support what I thought about there being no individual voting rights.


#61

I mean I understand we don’t vote on individual resolutions, Crowdcube can make these decisions as the bloc of shares under Nominee are counted as a single block.

The things we value before an IPO (when this agreement terminates) would be things like additional investment via pre-emption rights. We wouldn’t realistically vote on individual resolutions. We would effectively give up control of our pre-emption rights with this though, for reasons like it becomes difficult for Crowdcube to process £10 investments. Does anyone see how this isn’t the case? Because these terms give Crowdcube control over this and put it under their ambiguous discretion.


(Dan) #62

I’ve voted on a couple of things previously. Crowdcube Nominees emailed me (and other shareholders) to cast our vote. Crowdcube Nominees counts the votes. Crowdcube Nominees votes with it’s entire voting power (which is probably a couple of %) with the majority choice.

It’s previously been a pointless exercise anyway as individual’s in the cap table + the VC’s have the majority of the voting power and they had already decided to vote a certain way which passed the required 50% - we were still emailed as we were entitled to a vote via Nominee.


(Gio) #63

Heres a link to a Google Sheets with the differences between the Terms:

By the looks of it, the previous terms are simpler and he hold potentially more non-declared (embedded) rights.

Note on line 8 the sentence that is present in the previous term but not on the new:

  • EXECUTED AS A DEED by Crowdcube Nominees Limited.

Not really sure of what this means.


(Gio) #64

When you look the amount of added terms, I feel inclined to give a big old NO to the poll. But I will still read it more carefully tonight.