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Wednesday 20 February 2019

Monzo and Crowdcube try to change investors rights. Are they being totally open about the consequences?






 In a request we have seen from Crowdcube, concerning Crowdcube's Monzo Nominee SHs, investors are being asked to agree to a series of fundamental changes to the their original shareholder terms. These changes, it is declared, are in the best interests of SHs.


We dont wish to go into what is a private matter between SHs and Crowdcube/Monzo on here but if this clause or something pertaining to it, was to be found, for example, in the new terms, would it worry you? The nominee would in this case be Crowdcube - if this was in fact a real clause from the changes - 

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.

The Monzo forum for these things is buzzing with investors asking what these changes mean, many of them declaring that they don't have time to read through them or indeed if they have, that they simply don't understand them. Apparently Monzo did not see fit to include an email of their own. You can see the forum here

It looks to us as if Crowdcube have handled this very poorly.  And as if by magic, CC have now posted a long explanation (their idea of one) which includes this - 

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.

Do Investors ever read the DofT? 'Any losses'  - so for example if they lost a case against them from SHs in Emoov or Sugru? This strikes me as crazy. Plus there is the new issue of CC being able to slap expenses on without aksing - even though they say they wont. If they wont why do they need the permission? Is there a lawyer in the house? 

4 comments:

  1. Yet another mess. Is there anything Crowdcube can actually do capably. Everything they touch turn to ****, and I am not talking about the precious metal.

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    Replies
    1. Maybe but they seem to have more traction than Seedrs these days. Rob are you tracking whether numbers are reducing year on year, possibly as a result of Brexit uncertainty?

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    2. @Jim, I disagree. I believe Seedrs are now attracting more businesses and launching more campaigns than crowdcube. I just hope they can maintain quality.

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  2. Just running some data on that - some v surprising results I will be sharing at some stage on raises between 2012 and 2014.

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