Crowdcube request to change Investor Nominee Terms


#168

Out of interest, I haven’t seen a single person name one positive about this proposed change.

From what people understand so far… is there any positives at all to voting “yes” to the changes?


(Kenny Grant) #169

I waited a few days for clarification, which I think is enough time. Personally I don’t think this is a huge issue but do think it was mishandled by Crowdcube and Monzo IMO as the request should have been coordinated with Monzo and explained in clearer terms which explain the motivation for the changes in rights and whether this is good or bad for investors, and if bad what possible upside there is for us.

At present there didn’t seem to be any upside, and some of the clauses seem unreasonable to me esp. if imposed in a retrospective way on previous investments, so I voted no.


(Jordan) #170

Yes I agree that Monzo created the relationship but as between CrowdCube and the Investors Monzo don’t really have a say other than they would want them to be treated fairly - Monzo can’t really tell CrowdCube how to manage its relationship with the individual investors - at least not on a micro level


(patrick morrill) #171

No!
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(George Reith) #172

Save in respect of the Nominee’s fraud, negligence or default, the Nominee shall have no liability whatsoever to the Investor and may use any assets it holds on trust to cover any loss, liability, damages, costs and expenses incurred or suffered by the Nominee in the due performance of its rights and obligations under this Declaration of Trust.

I just wanted to clarify, as I see people quoting it a lot in this thread. This is not a new condition. This is already in your Declaration of Trust with Crowdcube Nominees Limited (6.a).

What is new is any mention of fees. If like me you are adverse to paying fees, especially percentage fees on your high risk investments then vote no.

This vote needs to be suspended anyway, they are in my opinion in breach of the regulator’s rules, specifically the FCA principle Treating Customers Fairly by providing misleading summaries of the new terms and not allowing misled voters to alter their votes.

There is also no mention of a third party auditor to ensure the proper handling of the vote, unless a list of voters and votes is shared do you trust them to be honest?

Edit: The condition quoted first appeared in the second round’s Declaration of Trust, if you have shares in the first round this does not currently apply to them, apologies for any confusion.


#173

I hope this happens.

I feel like although everyone here seems to have said NO and raised a bunch of serious questions, the vast majority of investors might read their misleading summary and just click YES without digging deeper because it all sounds pretty fine and dandy and on the surface just appears to be them tying some loose ends and harmonising the agreements,

In my opinion it is written very disingenuously and hiding the true changes proposed.


(Sajid Sabir) #174

Time for investors to put in a complaint

https://www.fca.org.uk/consumers/how-complain


(Kevyn) #175

I would but I am already bound by the new rules :pensive: .


(Kolok) #176

So am I , but just because you signed doesn’t make them legal, the terms look wholly one sided and unfair which is illegal. I guess I’ll have to have a proper look.


(Dan) #177

Looks like they snuck that term in there in 2017.

The terms from 2016 were far simpler:

(yes! just 4 points)

None of the power grabbing they seem to be doing now.


(Kevyn) #178

It is harder for me to justify that they are unfair terms as on their own they are not vastly unfair. They allow Crowdcube to do things, including invoking fees, if I wanted to buy shares with them. I had the choice of accepting those terms or not last December.

If these terms pass then people on the previous crowdfunding could possibly be forced onto worse terms than they originally have. Thats unfair and hasn’t been put to these shareholders in a fair way.


#179

I’ve not got one either :neutral_face:


(George Reith) #180

So they did, my bad I was in that round too and only had one copy of a Declaration of Trust so assumed it was the same from 2016. I’ve just seen now they attached them directly to the share certificate :man_facepalming:


(Hannah Rowe) #181

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


(Richard Cook) #182

Hi everyone,

Just to follow on from Crowdcube’s post, we wanted to just confirm that we’ve been in the loop on this. We knew about the vote and the change in terms. And we’ve been working together behind the scenes on this clarification.

We’re sorry that we weren’t quicker to clear up what was happening here - but rest assured that we’re always in touch and working together to make sure all our investors get the support you need.


(Kolok) #183

Contrary to popular opinion.

Would have been a more reassuring response if it hadn’t taken 3 days to write it up, considering the the terms would have obviously been rigorously checked and thought over, and people at crowdcube would know the exact reasons for each of the changes proposed.


#184

Thanks for the above clarification - it’s certainly an improvement on the original communication.

I’ve already voted no, and to be honest, nothing in the above makes me want to change that.

However benign the changes are, and even though it’s claimed there are no disadvantages, I don’t see that there are advantages to investors to agree to the change.

I am, of course, open to having my mind changed by those who know/understand/care more than I!


(chrisdalziel) #185

Pretty poor response to that one - as they haven’t said a clear ‘no’, I can only assume the answer is a ‘yes’. @Hannah_Crowdcube - why don’t you just answer this question clearly? It’s a very important clause and one that could have a very significant impact on shareholders via the Crowdcube Nominee service.


(Splodf) #186

The least that could happen is the term is clarified.


(james_e_bell) #187

Wow this is pretty eye opening. I was of the impression that when I invested, I was buying the shares and would own them. It seems that is not fully the case. Pretty worrying that even in the updated FAQ there are several clear scenarios stated where crowdcube can deduct from the value of the shares without our approval.