My inbox is crammed with Crowdcube announcements

[cojak]

Some of the smaller companies I use, as well as websites, have suddenly started announcing that their pitch for crowdfunding has been launched on Crowdcube.

Now I don't like this idea for a number of reasons - as far as I can see you actually have to send your passport to Crowdcube to prove you are who you say you are. Then you don't actually have shares, you have the opportunity for shares once the company is 'properly' launched on the Stock Exchange (and even this can go wrong as you can end up with watered-down shares that are worth virtually nothing).

Am I wrong with this assessment and has anyone seen a reasonable ROI with Crowdcube?

[ladymuck]

I've invested in a company via Crowdcube and didn't have to physically send off my passport. The ID verification was all online and quite painless.

Some investments qualify for EIS relief, and you'll get official notification of that. You can also sell your holding via their Cubex platform but only if there's buyers wanting to take them on.

Like all shares, whether via a listed or closed company, the value may go down as well as up!

P.S. I've only had my holding for about 6 months so it's too soon to see any returns.

[cojak]

I've invested in a company via Crowdcube and didn't have to physically send off my passport. The ID verification was all online and quite painless.

Some investments qualify for EIS relief, and you'll get official notification of that. You can also sell your holding via their Cubex platform but only if there's buyers wanting to take them on.

Like all shares, whether via a listed or closed company, the value may go down as well as up!

P.S. I've only had my holding for about 6 months so it's too soon to see any returns.

Thanks for this LM. I was happy to throw a bit of dosh to companies that I've used but the passport thing stopped me before I got started.

I'll have another look.

[northernladuk]

Like all shares, whether via a listed or closed company, the value may go down as well as up!

P.S. I've only had my holding for about 6 months so it's too soon to see any returns.

Bearing in mind the failure rate of small start ups in general I'd stayed well away from this. Do they have any stats of how many of these last past a year or anything like this?

I just imagined it to go the way the kickstarter stuff did. Initial offerings were pretty good but every daft idea on the planet seems to be on there and the success rate must be next to zero. I might have had a bad experience as I only invested in a few and two, the Spectrum Vega and some hobby re-breather both went bump. I feel the chance of any money being given to these ideas to work is nothing more than a gamble with the odds stacked against you. Is Crowdcube any different?

[d000hg]

Not heard of CC. Is it a similar idea to Seedr?

[Ploptimus]

I have used Crowdcube (and also Seedrs) since 2018 as small part of my investment strategy and tax planning. I invest in only EIS/SEIS qualifying companies which I put in a limited amount of research into and invest if I think their business is feasible. My portfolio is intentionally diversified in this portfolio. Expected returns come at 3-5+ years and expect it to be very illiquid until then. As mentioned there is a higher chance of failure in startups hence why this is a small part of my portfolio. You buy unlisted shares which are held by Crowdcube Nominee in the same way my HL shares are held by HL Nominee. You do receive a share certificate stating this as well as EIS/SEIS certificates where appropriate.

From 26 companies
1 gone bust
1 listed on AIM
24 still trading

The 1 gone bust I received 30% tax relief on the initial investment and this year have applied for capital loss relief of 40% (due to higher rate tax) of the remaining giving an actual loss of 42% of the actual investment.
The 1 which has now listed on AIM is up 600% from my purchase price. Just waiting to find out what options I have with this and fees depending on how they transaition the shares to the shareholders.

[Ploptimus]

Not heard of CC. Is it a similar idea to Seedr?

CC and Seedrs did attempt a merger but got cockblocked by the CMA

[d000hg]

I put a bit into Seedrs when I thought it would be fun to diversify my "ISA money" into some higher risk things - couple of k here and there just in case something goes huge... Seedrs, crypto, etc.
I own a small piece of WeSwap but lost interest in the platform after.

[ladymuck]

Bearing in mind the failure rate of small start ups in general I'd stayed well away from this. Do they have any stats of how many of these last past a year or anything like this?

I just imagined it to go the way the kickstarter stuff did. Initial offerings were pretty good but every daft idea on the planet seems to be on there and the success rate must be next to zero. I might have had a bad experience as I only invested in a few and two, the Spectrum Vega and some hobby re-breather both went bump. I feel the chance of any money being given to these ideas to work is nothing more than a gamble with the odds stacked against you. Is Crowdcube any different?

I've only invested in one company and it's one I know - City Mapper - which has been around for years and I've been using for years. So, it's as risky as any other tech business I guess.

[ladymuck]

Not heard of CC. Is it a similar idea to Seedr?

Yes