Upcoming funding round discriminating non-UK early investors


( related to Monzo CEO, Investor in Monzo ) #81

Why does it negatively affect the Value of your investment ?


#82

I’m sure you wouldn’t be very happy if you were a foreign investor and had your shares diluted by more issued shares.


#83

When more shares are issued the market cap of the company increases but at the same time shares lose value as they represent less of the company.

Is my understanding.


( related to Monzo CEO, Investor in Monzo ) #84

Id be very happy if I invested at 51p to then have “diluted” shares that are worth 771p

  • how much do you think you would have to pay for your shares to keep your percentage stake holding this time if you had invested in every round ?

#85

I’d be quite unhappy considering I couldn’t invest further money to capitalise. Monzo could also issue more shares this way and potentially dilute their investment further


(MikeF) #86

I’m sure I wouldn’t be. My happiness or otherwise is not a guide to right, wrong, fair and unfair.


(Steve Daniels) #87

I guess my only real response to this is that they were (I think) diluted already by the non-public raise.

I’m completely on side though. Whilst it’s not discrimination in a legal sense, I fully understand why noses are out of joint and would hope that Monzo could ask and allocate some shares to foreign investors.

Can Crowdcube do a private, invite only raise?


#88

It may not be legally wrong but it certainly is unfair.


(MikeF) #89

It’s fine that we disagree, you know?


#90

Because new shares are being put into circulation without a preemptive right to buy enough shares to ensure you hold the same proportion of stock in that company. As the market cap increases, your portion of it decreases with every new investor that isn’t you.

Even if you have made a significant amount on your initial investment, the relative value of that stock is irrelevant. You’d be equally as annoyed if your projected value would have been 991p per share. It’s not a fair comparison.


#91

I am aware but what’s the point of a discussion if not to convince someone else to agree?


(Steve Daniels) #92

No, this is why the art of debate has been devalued so much. You see it lots in politics too.

You can appreciate each other points and part as friends without changing opinions.

Debate isn’t about winning it’s about conversing.


(MikeF) #93

Not sure that’s very likely is it?

If I’m honest, I’m utterly bemused by all this ‘unfair’ stuff. It just makes no sense to me on any level.


#94

I’m sorry then but I have no chance of making you understand the other side of the argument, I think it has been quite clearly spelled out a few times now.


( related to Monzo CEO, Investor in Monzo ) #95

I think this is getting to the crux , my dad used to argue with my aunt every sunday lunch , “I may agree with her , but I just want an argument to pass the time” - it upsets some , amuses others , but then don’t take offence if the person you’ve been poking with a stick bites back :slight_smile:

and then please , please please don’t go on to the "other site " and claim because your opinion didn’t meet with rapturous applause claim you’ve been shouted down by the coral some call it pink “fan boys” :slight_smile:


(Adam) #96

It’s completely fair. Monzo aren’t a public company, they don’t have to answer to anyone. They can issue shares as they see fit and this is how they want to do it.


#97

You might see the early opening to existing investors as unfair, however pre-emption rights are guaranteed to existing investors by law. They are in every company statute in the UK. This is an example of subjective unfairness.


(Steve Daniels) #98

I do think this is a symptom of the current political climate. You could get given a gold bar each and there’s still be some guy whining that it’s made the price of gold go down…


#99

I sometimes wonder if the whole crowd funding thing has changed peoples perception of what constitutes a good investment. As an investor, looking to put money into something with a view to it being worth more when I take it out, I’d be really annoyed if I were the OP. But it appears that people feel that investment should be more of a democratic process to bring consumers closer to businesses they love.

Not necessarily a direct response to what you have said but I think we’re looking at the whole situation from very different perspectives.


(Excited about Christmas) #100

This is not a legal right - it would have to be offered in the original Articles of Association. I believe it actually was, but was later removed by a vote of the majority shareholders, as offering pre-emption on such small stakes would mean collecting 50p from thousands of people, which would clearly cost more in admin than it would raise. So, as far as I know, anything to do with pre-emption or trying to hold on to the same stake does not apply to existing crowd shareholders at Monzo. I would imagine it may well apply to the VCs, though.