Some Seedrs investors being offered 25% discount to buy shares before the public gets in.

It has been brought to our attention that Gartenzwerg Technologies is offering existing Seedrs SHs a 25% discount, linked to their preemption rights, if they buy in a new round, which will soon be available to the public at the full price. 

Gartenzwerg have stated (not to us as they didnt deem us important enough and didnt wish to give us publicity!) that the 25% discount mentioned here was always in the form sheet for the shares issued in the first round. These terms are not published at CH. We assume this claim is correct though as it has been made with Seedrs knowledge. So all seems to be fine. The shares issued as part of the pre emption are NOT being counted on the Seedrs new campaign - all shares issued in the new campign are at the full current price  - according to the CEO.  The new Seedrs pitch was kickstarted with a one off investment of £100k and recently the company issued shares to that value at a price of 80p - a conversion of some note we have to assume. But then that couldnt be in this round - could it?  27 Oct 18

The letter to existing SHs is very explicit. Existing SHs have preemption rights. So far so good. So for example if you had purchased £1000 of shares before, you would be entitled to buy another £1000 in this round - although strictly speaking that isnt what preemption rights are for. However in this new, currently private round, you will get a 25% discount on your £1000 worth of 'premeption rights' shares'; so will only pay £750. The implication is very clear that when the campaign goes public, people will have to pay the full £1000 for £1000 worth of shares. 

They have therefore created two prices for the same share in one round. We do not know whether the public were going to be told this or not. We assume not as it would be bound to cause a stir. 

We were under the impression that all shares in an ECF campaign had to be pari passu - ie they were all the same apart from varying degrees of rights - so same price (essential) and same standing in case of exit,collapse etc. But some might have attached rights to vote, preemption etc. This difference is then translated into A, B and C etc share denominations. But the crucial thing is the price for ALL differing classes is THE SAME. That is the offer price. We may be wrong. 

Of course what this does in terms of the mechanics of ECF, is push the 'already invested' indicator on Seedrs higher.  This in turn makes it more likely that when the pitch goes public, tomorrow, that indicator is sitting above the magic 30%. Which is all fine so long as everyone knows that these investments in Gartenzwerg Technologies have been given a 25% discount incentive. 

We just thought investors might like to know what is going on behind closed doors.