Crowdcube request to change Investor Nominee Terms


(Sajid Sabir) #107

Crowdcube are getting greedy, about time Monzo moved away from it.

I hope someone from Crowdcube is keeping track of the feedback on here and realise that if they change the terms then they can expect backlash from a lot of investors.


(Splodf) #108

Crowdcube investors are already rabid about the latest fee and general poor due diligence.

Potentially taxing an investment of a successful business long after investment…god.

Judging by the anger in the comments sections of nearly every pitch already I’d have the fire brigade on 24 hour watch of Crowdcube’s HQ.


(Brexit Day Is Gonna Be Shamayzing.) #109

I voted no


(Kolok) #110

These terms seem extremely unfair in crowdcubes favour, the want permission to irrevocably do what they want and when they want it.

Also want the power to tell you what to do.

Are these terms even legal, because of the imbalance between them (crowdcube as a business) and us (customers ) in the terms? I suspect not and can potentially be nullified if challenged.

http://www.legislation.gov.uk/ukpga/2015/15/part/2/crossheading/what-are-the-general-rules-about-fairness-of-contract-terms-and-notices/enacted

Assuming our fees paid to crowdcube is covered under the consumer right act 2015 ( I don’t see why not)

(1)An unfair term of a consumer contract is not binding on the consumer.

(4)A term is unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations under the contract to the detriment of the consumer.


(George Reith) #111

What I don’t understand is how CrowdCube can alter the terms and conditions of their services to me based on other people’s votes.

Last I checked my previous declaration of trust says nothing about its terms being able to change based on a majority verdict?

This isn’t a Monzo general meeting, why is voting on this even a thing? It should be do YOU accept these new terms and conditions.


#112

This is an excellent point and something I was going to check in the original terms when I got a moment.

Can anyone shed any light on the legal means by which my terms change based on a vote of other shareholders?


(Dan) #113

I thought exactly the same thing.

It’s one thing that Monzo may want to alter it’s Articles if Association and have to call a vote (I’m fine with this - I knew this when I signed up)

But I have a private set of terms with Crowdcube Nominee’s who agreed to hold the legal title to shares.

I didn’t agree to have those terms of a private, legally binding contract changed based on consensus of others. I don’t know how that’s legal.


(Kolok) #114

I can’t find a copy now, but I’m sure they put it in their terms and conditions, not saying the the term is legal/fair at all.

Seems like they (a technically separate company to crowdcube) own the shares in full and we are beneficiaries of them (possibly via a trust and not directly) at least that’s what they are implying,

and crowdcube want people to agree to give crowdcube full and irrevocable permission to instruct the trust (company that technically owns the shares) to do what crowdcube thinks is best,

as Crowdcube deems, in its absolute discretion, to be in the best interests of the Investors as a whole,

(i) take and refrain from taking any actions;
(ii) consent to or withhold its consent to any matter; or
(iii) waive its rights,

I understand there may be some legal reason why we aren’t direct owners of these shares (maybe just simplicity) , but these permissions that crowdcube wants are absolutely mind boggling , and the fact that the first few rounds of crowdfunding didn’t have these terms in means there is no legal need for them now, and it seems to be purely for crowdcubes selfish right.

I’d like to point out that during the latest round inside the monzo app , we were clearly being sold shares, said the words shares and it went up in multiples of £7.xx, implying that it wasn’t just an investment where an investor could choose a random amount,

If it turns out we don’t own any shares isn’t that mis-selling/mis-leading ?


#115

Crowdcube controlling the shares? What could possibly go wrong with that?

It’s a big nope from me, but I have a feeling this will go ahead anyway because Crowdcube is salivating at the thought of milking the new cash cow


#116

Hi @cookywook, @simonb - could someone please clarify what’s going on here, and why the terms were different across the rounds? Sounds like most people would prefer the opposite vote on the last round…


(Michael) #117

Or maybe at least if it is something Monzo cannot legally/contractually discuss

I invested in the most recent round, so no vote for me on this


(Simon B) #118

Hey all :grinning:

Bear with us - I believe a representative from Crowdcube will be responding to the concerns in the near future.


#119

I wouldn’t worry as your b grade shares will be so diluted by the time your able to sell them anyway


(Douglas ) #120

It’s very unclear. I don’t see what investors have to gain by giving crowdcube more power . All I know is that the shares from previous rounds are more are potentially more valuable than those the latest round. I am annoyed at myself for not checking the new terms at the latest round before investing …my fault ! Lesson learned to read agreement properly.
I am also disappointed that Crowdcube nor Monzo did not mention that the Terms would be different to the other rounds when plugging the latest investment round … Lessons to be learned … let’s hope not an expensive one. Will take advice but suspect it will be a no from me!


(George Reith) #121

Why are Monzo signed up to the Fairer Finance initiative and using a company like CrowdCube who are ambiguous in their communication?

I’ve just had to raise a formal complaint (to Crowdcube) because they are providing a summary to investors of their new terms which only highlights positive aspects whilst failing to mention negative impacts on the investor like being able to incur fees.


#122

If Crowdcube wanted to benefit from the tiny minority of companies that are successful instead of going bust like the rest they should have agreed an equity component with the companies that raise on their platform instead of opting to get paid their fees in cash.

They have taken the cash for their crowdfunding services and now 3 years later they are looking at the missed opportunity and retrospectively trying to get an interest in the value of the Monzo shares.

The bit that I find very concerning is they are trying to bend the rules to allow a cash grab with a different business entirely. Their nominee arm is just supposed to hold our shares and carry out any admin involved with holding or transferring shares and they are paid an agreed sum by Monzo to do that.

If these new terms go ahead they’ll be allowed to say “x% of any share sales go to Crowdcube from now on”.

Imagine if the shares under their management become worth £1bn and they decide they want to charge a 1% annual fee?

I’ve already washed my hands of Crowdcube since they launched fees on new investments. I get that they need to make money too but when you have to go to such extreme lengths to make any money then your business model doesn’t work.

I hope Luke or Darren from Crowdcube will be coming on here to explain the bigger picture of what on earth they are trying to do here - hopefully not just someone from Legal to repeat the particulars.


(Douglas ) #123

Why does the email I received from crowdcube regarding this state "Monzo have issued a new vote " . Are Monzo involved with this vote ?


#124

I agree (and I have their shares too). I have always preferred them to Seedrs as they don’t charge “carry” (a cut of investors’ profits), but to try and do that retrospectively is particularly cheeky, and I would hope there is no attempt to do it on the latest round either. Equity crowdfunding is quite risky enough without brokers taking a cut of what profits you do make.

I too have only invested in Monzo since the investment fee was introduced. I hope this wasn’t part of the negotiations when they waived it for Monzo.

Interestingly I have not been sent any similar votes for any of my other CC investments, most of which pre-date even the first Monzo round.


(Justin) #125

I’ve also been hesitating over which way to vote on this. It would really help to understand whether this is led by Monzo or CrowdCube.

The share of the company held by investors who participated in the crowdfunding rounds is less than 10%, so if feels likely that if this were something Monzo wanted to push through, they would be doing so with the support of Passion Capital and other larger investors, in which case crowdfunding investors would anyway likely be outvoted. Yet this would likely create discomfort among crowdfunding investors - which is something I’m certain Monzo would avoid at all cost.

I can’t wait to hear from Monzo who is actually driving this, and to get clarity over the objective.


(Duncan) #126

I, like the others here, got this email and was very confused. Usually Monzo make sure that all communication is very clear and concise. In fact, it’s a cornerstone of your business model. While I understand that this came from CrowdCube, they are holding the shares on behalf of the thousands of user-investors in Monzo, and so I am afraid that responsibility for this poor communication can’t be shirked quite so easily. Were staff Monzo aware that this email and vote would be sent through to all investors? If so why is it so opaque? And is a random person from CrowsCube answering questions on a forum in a non-legally-binding way really enough?

:unamused: :disappointed: