Crowdfunding (Upcoming 2018/19 Round) - Updates


#125

Thanks.

Well let’s hope people do have to pay capital gains, because that means all is going well :slightly_smiling_face:


(Excited about Christmas) #126

You may not get the chance to spread it out, for example in a “drag along”, where the company is sold, and all shares go straight to the buyer. Was funny to see an angry Sugru shareholder on Twitter asking where her vote was. It’s rare to offer a majority shareholding to crowdfunders!


(Excited about Christmas) #127

Yes - that’s what I meant. The previous holdings would be worth a killing (at least on paper), but would you go back in at that new level?


#128

It comes down to how much more growth you think the company has.

But I agree, growing from £30 million to £3 billion is huge but achievable relatively quickly. Growing from £3 billion to £30 billion will probably take considerable time.


#129

I’m an angry Sugru shareholder, though only to the tune of £100 … make that £9 haha!


(Nikhil velani) #130

Me to :rofl:


(Andrew Clark) #131

Just a few thoughts:

1: The last raise was for a lot of money so I imagine they won’t need to come back to borrow for some time yet, especially as there is at least a small income stream from the overdrafts and they burn through money less quickly with current accounts rather than prepaid cards. On saying that their now 300 staff require salaries and so unclear how quickly they are burning through this cash.

2: They don’t have to come back to their original crowdfunding investors but have chosen to on the previous raises, you’d have to assume that they would do this again. They did previously indicate they’d like to try and let more people get a piece of the action though, especially as Monzo clearly value their community and so, to satisfy those requirements, I’d expect them to offer shares to existing customers (through the app would be cool - they could even put Crowdcube in their market place!!!). They have no obligation to offer to previous crowdfunding investors but the ethos of the company suggests that they would do this anyway as it helps build loyalty and trust.

3: If I were Monzo and I wanted to raise some cash at the best valuation I’d look to have passed two milestones - 1,000,000 users and availability of a populated functioning marketplace. At the current rate of accretion they’ll hit 1 million users in September.

So, here’s my prediction (I have zero insider knowledge, I’m just an overly interested fanboy): there should be a round in September open to existing institutional investors, existing crowdfunders and new crowdfund investors made up of Monzo users. Existing institutional investors will need to be satisfied so it will need to be a big raise and, my projection is, valuation of around £2 billion based on a bank with a million users (not the full £3 billion as there appears to be no intention to offer mortgages etc and most likely won’t be breaking even by then). And I bet it will be heavily oversubscribed at that rate. Or is this wishful thinking?


(Excited about Christmas) #132

Yes. I expect a lot of that growth to be post-IPO, so is there much point in going for more illiquid equity?


(Excited about Christmas) #133

Sounds reasonable on the valuation, but I dont think it’ll be this year. I think they need to get all the reasons not to switch out of the way, and possibly even prove themselves in going abroad, before they declare a value again. I’m sure there will be lots of interest. Note that offering equity is not the same as “borrowing”…


#134

I suppose also that going for IPO then allows everyone the chance to buy Monzo, rather than hope to get in on a limited fund raise.

I wonder if existing shares are converted to new shares at IPO or if investors are just given the money (and then they can choose to buy at IPO)


(Simon B) #135

Stay tuned VERY soon for details on how we’ll be approaching this :grinning: It’s going to be awesome :fire:


#136

I really hope the team have got something big in the works regarding crowdfunding and it isn’t going to be an afterthought this time.

The plan has always been ‘Spend months finding the best VC to secure all the investment we need and then involve the community with a small, quick crowdfunding round’.

What about a round where you spend months securing a huge crowdfund then involve the VC community with a small, quick round to top up any shortfall in funding?

The VC’s don’t deserve to be priority. All you will get from them is a big cheque and a pinky promise they won’t sell out if Amazon knocks. To go to them in this next round would just be lazy with the amount of demand there is from the community.

100,000 community investors could turn this into a trillion dollar business.

Make a prospectus, make your own nominee company, get 100k new investors and take over the world.


(Simon B) #137

I think the former is a fair opinion to hold (not saying I agree with it necessarily) but the latter isn’t true.

Our investor partners have been incredibly strategically important to us. The connections alone make their involvement worthwhile. You can’t put a price on the connections, knowledge and help provided by people who have been there, done it, and seen it. Even their recommendations are worth their weight in gold when trying to get things done.

That said, I would personally love for our customers to be able to invest as much as they want to and I hope we can make this happen. I don’t think it’s an either/or scenario.


#138

Agreed previous round VCs have been great choices. Passion Capital invaluable especially with the involved partners the deep pockets when you ran out of money in 2016, but later stage ones like DST are not going to bring you much. A community round would bring so much more.


(Excited about Christmas) #139

Should be a choice I think, unless it’s a trade sale (which seems unlikely)


#140

Agreed. Ideally we won’t have a situation where they say we have voted to waive everyone’s pre-emption rights but will be making a “follow-on investment” ourselves!


(Excited about Christmas) #141

Pre-emption would probably be waived anyway, because the dilution would make it ridiculous. I remember Tom saying on a previous round that he’d rather offer a fair follow-on policy than use pre-emption and have to collect 50p off 1000 people


#142

I was thinking how the the users on Crowdfunding sites would react to a unicorn valuation in terms of they can also invest… not sure what to make of it right now but it should be fun! Any thoughts?


(Nathan) #143

I’ll openly admit i have no clue about investing even though I work as a developer at an investment bank.

But doens’t take a genius to realise Monzo are doing great things and I’ll be happy to put my money where my mouth is when the next opportunity comes around :slight_smile:


(Beta User) #144

I’m also interested in the next investment. I’ll be following