Invest in Chip Series A

stevec59

I've been with Chip savings for about a year now and I've got used to it saving money for me. Today I received a Chip Chat inviting me to Invest in Chip Series A, I presume lots of people have received the same, they have capped the maximum investment at £1,200, so that isn't too bad, I guess it's a good investment? I presume that if you succeed you will get shares?

Thoughts please.

Many Thanks

Steve

coyrls

Why would you guess it's a good investment? You should rely on a lot more than a guess before investing in a single company.

Zanderman

stevec59 wrote: »

I guess it's a good investment?

As coyrls has already said, why think it's a good investment?

It's an invitation to invest in a financial services company that has ambitions to become a fully licensed bank. That's all you can say about it.

Yes they're innovative, yes many of these newer banks seem successful, but they might not be. Many have significant debts. No-one can judge their futures.

Nothing is certain - they are merely raising capital with targetted emails saying how brilliant they are - but they would say that wouldn't they.

The only guess is to say that might or might not be profitable.

masonic

stevec59 wrote: »

Thoughts please.

Series A usually relates to a venture capital funding round of an early-stage company and may just be the tip of the iceberg when it comes to the amount of funding required to bring the company to maturity. Companies will typically be dependent on this money to survive while they develop their offering and try to make some money, but they will be some way off trading profitably and will raise more funds as needed to sustain themselves while they are making a loss.

These are very high risk investments as reasonable percentage of such companies will fail. The Government gives generous tax breaks when investing through VCT or EIS funds. And for good reason.

londoninvestor

stevec59 wrote: »

Today I received a Chip Chat inviting me to Invest in Chip Series A, I presume lots of people have received the same

Something I'm curious about here - if Chip send messages like this, what's the point at which they would cross the line into "promotion", which isn't allowed unless you've classified the recipient as high net worth, or a sophisticated investor?

stevec59

Thanks for all the replies. I think it's a good investment because the company seem to be doing well and going places, I've registered my interest and I'll see what happens next.
The fact that it's Series A make me thing that there will be more investment possibilities, so if they do that doesn't it mean that Series A will be worth more?

Thanks again

Steve

masonic

stevec59 wrote: »

The fact that it's Series A make me thing that there will be more investment possibilities, so if they do that doesn't it mean that Series A will be worth more?

Further rounds of fundraising would typically dilute the equity of existing investors. So it would probably make it worth less when it is eventually converted into an ordinary share holding. The difference between what the company is worth then and what it is worth now would need to compensate for that.

pmjenkins

londoninvestor wrote: »

Something I'm curious about here - if Chip send messages like this, what's the point at which they would cross the line into "promotion", which isn't allowed unless you've classified the recipient as high net worth, or a sophisticated investor?

You invest via the Crowdcube platform. When you try to make your first investment you are asked a series of questions to check that you understand what you're getting into. e.g. "Most crowd funded ventures are successful - true or false?"

jimjames

stevec59 wrote: »

Thanks for all the replies. I think it's a good investment because the company seem to be doing well and going places, I've registered my interest and I'll see what happens next.

When you say they're doing well, on what basis are you making that judgement? They handled your account ok? They're making massive profits? According to their website they've "processed" £6.7m of savings on 25k accounts. How much are you paying Chip for the service they're providing for you?

Growing fast doesn't always mean successful. By all means register for more info but if you've never invested before I'd certainly recommend a bit more investigation that your post suggests.

Alexland

I don't see what's so special about their business that it's worthy of direct investment and would categorize this and your approach as extremely high risk. Most individual investments are rubbish so either go passive or be extremely selective.

ecnirp98

I just got an invite email myself, been with Chip a year and it has been a useful saving tool, particularly with the 3% bonus intro I got from the code on MSE.

I must admit I am surprised at the sign up criteria, you have to sign up within 24 hours, or the opportunity closes, there is not much information apart from a silly video, so I am very wary of investing, even though I think the product so far has been good.

I am just wondering if people have invested and what their thoughts are, there seem to lots of promises of new ways of doing business and breaking the bank monopolies without any real detail.... it appears its a punt on an exit strategy of CHIP being bought up or going Public, so I would treat this as a medium to long term investment, as there is no guarantee when/if you will get any money out.

Some overview Info I found:
https://www.getchip-community.uk/equity