Crowdfunding

Author
Discussion

Rufus

Original Poster:

1,518 posts

207 months

Monday 16th May 2016
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Am I missing something here? I can sort of understand why one might want to crowd fund a small local business that you might like to utilise if you had spare cash and wanted to 'be part of it'; but why would one want to crowd fund an established business, such as, say, BrewDog. You cant sell your 'share' and once the crowdfunding is over what do you really own?

bogie

16,387 posts

272 months

Monday 16th May 2016
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exactly ...there are a lot of people "investing" with no concept of how you actually get your money out. I can understand people doing it with small amounts for rewards etc, but not more substantial amounts

NorthDave

2,366 posts

232 months

Tuesday 17th May 2016
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I invested relatively small sums about 5 years ago in 5 crowd funding projects. One has already gone bust and despite the others all saying their spiel about a 5 year exit plan I have had no money back.

It's good the way you get part of the investment back on your tax bill but I think you need to view the rest as almost a charity donation. There are so many ways it can wrong it is unreal - bad management sinking the whole thing, further rounds of funding diluting your share etc etc.

The best one I have seen was a small restaurant near us who was offering meal packages for funds - so 5 people eat for a certain amount of money etc. At least this way you are helping and actually get a return!

walm

10,609 posts

202 months

Tuesday 17th May 2016
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Rufus said:
Am I missing something here? I can sort of understand why one might want to crowd fund a small local business that you might like to utilise if you had spare cash and wanted to 'be part of it'; but why would one want to crowd fund an established business, such as, say, BrewDog. You cant sell your 'share' and once the crowdfunding is over what do you really own?
You really own the equity in BrewDog, but there is no secondary market for now.
I believe they promised they would launch one but haven't yet.
You still own a chunk of the company though, that doesn't change.
It's just very hard to value it and even more difficult to realise that value.
However, since they have JUST closed another fundraising round in April, that gives you a very good stake in the ground as to what people are willing to pay so tells you at least in theory what your equity is worth.

Europa1

10,923 posts

188 months

Tuesday 17th May 2016
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Depends on the nature of the crowdfunding - it ranges from the philanthropic end, where you get nothing more than a warm feeling and maybe a tshirt (which so far are unregulated), through people getting a buzz out of maybe getting a beta prototype or early release of the product (although that didn't work well for the Zano drone), through to equity offerings such as Brewdog which are made under the regulatory umbrella of the Financial Services and Markets Act. There are also some crowdfunding platforms which offer debt funding.

Truckosaurus

11,307 posts

284 months

Tuesday 17th May 2016
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walm said:
You really own the equity in BrewDog, but there is no secondary market for now.
I believe they promised they would launch one but haven't yet.....
There was a selling window a year or so ago, lots of people made a good profit, and there is another occurring in October this year.

The Brewdog 'Equity for Punks' shares don't have any voting rights though.

I bought £500's worth whilst slightly drunk during the 2nd round of funding (5 years ago?) which are 'worth' around £5000 when valued at the price of the most recent funding.

walm

10,609 posts

202 months

Tuesday 17th May 2016
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Truckosaurus said:
walm said:
You really own the equity in BrewDog, but there is no secondary market for now.
I believe they promised they would launch one but haven't yet.....
There was a selling window a year or so ago, lots of people made a good profit, and there is another occurring in October this year.

The Brewdog 'Equity for Punks' shares don't have any voting rights though.

I bought £500's worth whilst slightly drunk during the 2nd round of funding (5 years ago?) which are 'worth' around £5000 when valued at the price of the most recent funding.
Nice!!

Ozzie Osmond

21,189 posts

246 months

Tuesday 17th May 2016
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Crowdfunding? I think it would be more fun to sit in front of a fire chucking in £20 notes! Probably get a better return on the "investment" as well....

Truckosaurus

11,307 posts

284 months

Tuesday 17th May 2016
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Alternatively. I have also 'crowdfunded' a couple of books on Kickstarter from part-time/amateur authors that I was familiar with. Basically it was little more than the books would have cost anyway and you get a signed copy once it was published.

However. I also donated to David Brabham's project and that seems to be something that over-promised/under-delivered, not enough to earn a t-shirt or whatever the lowest reward was so I don't especially care.

Finally. One distinction that should be noted is the slightly different models of the major sites, Kickstarter only takes the money if the initial target was met but IndieGoGo always takes the money (and pays the recipient) no matter how little is raised.

Craikeybaby

10,414 posts

225 months

Wednesday 18th May 2016
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I was looking at the Zenos offer on Seedr - I think it is more like the Brewdog model than kickstarter etc, but what knocked it on the head for me was no plan on when/if you would be able to sell on your shares.

Orchid1

878 posts

108 months

Wednesday 18th May 2016
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I've always wondered why with the collective wisdom on this site there hasn't been a proposed business start up available here to invest in by PH members only.

Rufus

Original Poster:

1,518 posts

207 months

Wednesday 18th May 2016
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Orchid1 said:
I've always wondered why with the collective wisdom on this site there hasn't been a proposed business start up available here to invest in by PH members only.
Too many egos spoil the broth?

I haven't partaken in any crowdfunding myself and until I can start to see where they is the possibility for secondary markets I think I'll steer clear. Although it will be interesting to read what happens if/when, as a poster suggested, an opportunity opens up for those who did 'invest' in BrewDog to sell their shares.

DuncB7

353 posts

98 months

Wednesday 18th May 2016
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I will probably look at selling my 'shares' with BrewDog at the next opportunity.

I enjoyed the discounts it's given me and I had a year being part of the Abstrakt club which I got a number of interesting beers from. I was young and naïve when I bought in but realistically wouldn't have done anything more useful with the money in the short term.

Truckosaurus

11,307 posts

284 months

Wednesday 18th May 2016
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Rufus said:
...it will be interesting to read what happens if/when, as a poster suggested, an opportunity opens up for those who did 'invest' in BrewDog to sell their shares.
Keep your eye on http://www.assetmatch.com on 19th October...

Rufus

Original Poster:

1,518 posts

207 months

Thursday 19th May 2016
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Seems I'm not the only one concerned.

http://www.thetimes.co.uk/edition/business/dramati...