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Crowdfunding
George C
Posted: 25 May 2018 13:32:47(UTC)
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There was an older thread touching upon this as well as things like P2P lending. I'm specifically talking about the opportunity to buy equity in a small/new business through platforms like Crowdcube. If any of you drink beer, BrewDog if probably the most well known example, though i'm not sure investors have actually seen direct returns/income as of yet.

Does anyone have any experience of this?

There is 30% tax relief on most investments too.

I've never invested in anything like this myself, but i'm considering putting a very tiny portion of my portfolio into one or two I like. Assessing these companies is much simpler I think - probably due to lack of information and going off gut feel. The trade off i suspect is that is much more risky/unknown.
King Lodos
Posted: 25 May 2018 15:13:52(UTC)
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Seedrs is interesting .. I read investors had averaged 14.5% annual returns over the first few years – I'd be interested to know more up to date figures.

Also interested – given the lack of liquidity – how much investors actually tend to make it out with .. If a high proportion of companies fail or aren't bought up, do you wind up with half a portfolio you can't do anything with?

I'd be more tempted by the fun aspect .. I don't think I could put a meaningful amount of money into something so untested .. I don't know how their research and due diligence compares to an established VC firm – the same reason I'm cautious on P2P lending.
JohnW
Posted: 25 May 2018 20:40:30(UTC)
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I must admit it's something I've been thinking about. Crowdstacker is the one I've been looking at, thinking 4 loans of say £500 each just to stick a toe in the water to feel the temperature. I'd be interested to hear from anybody who has used any of these Innovative Finance ISA platforms.

John
Rishan
Posted: 25 May 2018 21:21:13(UTC)
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I was looking at the Crowdcube site the other day, as I'd heard about a fundraising by a brewery that I rate very highly - Northern Monk. Unfortunately I was too late and the campaign had closed, but I would have been all over that. Exceptional beer and a very strong brand, although I don't think they have the same global ambitions as Brewdog (at least I hope not, for the beer's sake)!

Also, they are canned only, no bottles, which I like because of easier recycling, faster energy transition and more efficient supply chains. I only buy in cans now, one of the small individual things I do that I hope benefits the environment. I realise it cuts me off to a whole load of good beers, but there are enough outstanding UK breweries with can-only ranges that I'll be very happy to support:

North Brewing Co
Magic Rock
Cloudwater (one of the best breweries in the world)
Verdant
Left Handed Giant
Wylam
Loka Polly (this Welsh brewery is new but very, very good indeed!)
Cromarty (Scotland's finest IMHO, but only when it's on tap for me, as it's a bottled range)

I know a guy who was into Brewdog's first fundraising series (10 years ago?) and he has made an absolute killing. You're right though - when the private equity firm bought in there was only a certain window to sell a small amount of the shares back to the company, so extremely illiquid at the moment.

Is there anything else interesting on Crowdcube that you've seen there? I noticed the Cotswold distillery campaign and this technology thing called Celo, which I thought could be interesting.

I think you would need to consider this type of investment as money that you would be prepared to lose all of. And I agree, for me it would also be a fun thing on the side. I wouldn't analyse it the same way I do my main investments. So I would need to mentally say to myself that that money is gone, but if it ever comes back to me and then some, great. I probably won't invest in anything like this for the moment - too risky and less of a priority than my ISA and pension - but I am interested in the space.

Sorry, I don't have any other experience or knowledge of any of this, just excited to talk about beer for a minute.
1 user thanked Rishan for this post.
Tim D on 29/05/2018(UTC)
King Lodos
Posted: 25 May 2018 21:40:23(UTC)
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Ivan Opinion
Posted: 29 May 2018 16:17:46(UTC)
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Wouldn’t touch it with a barge pole . I Lost £5k ( less tax incentive )’in an upmarket retailer. I didn’t really understand what I was getting into . Whilst I have shareholders voting rights, they are conducted by email and the lack of transparency means I never really know what’s going on behind the scenes
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