Startup investing

Nardge

Good afternoon

Further to my previous contributions, here are the links I'd wanted to bring to the attention of both Masonic and Malthusian, regarding the success of Revolut. I'm sure similar can be found for Monzo via an internet search.

https://www.crowdcube.com/explore/crowdcube/crowd-investors-make-19x-returns-on-revolut-investments

https://www.growthbusiness.co.uk/revolut-generates-19x-return-for-crowdfunding-investors-2554741/

Malthusian - From the above, it seems that 'everyday' Revolut Investors received a "minted" return, not just the Founders? I hope for something similar from Chip!

Masonic's contributions have 'disappeared' which is annoying, as I'd wanted to read and digest their content again today - May I ask did you delete your posts Masonic, or perhaps the Forum Moderator did?

FAO Everyone - Is the consensus that where VCT are directly involved, the chances of 'everyday' Investors reaping are greater?

All of which leads to my next query:

Both Nutmeg and Assetz Capital are Crowdfunding this month. I've already invested in Chip's...
I have both S&S (Nutmeg GSA) and IF ISA (Assetz Capital) with each respectively.

Masonic I recall you saying something to the effect that you would never invest directly into IF (P2P) firms as a Crowdfunder, only as a 'Loan Lender'. Is that due to the risk of the firm going 'bust'? Would you extend the same rationale to S&S firms also?

I ask these as I'm deliberating whether or whether not to get involved in the above two Crowdfunds...

Looking forward to anyone's responses!

With Kind Regards

Thrugelmir

With regards to Revolut. Do you recall the Dot Com boom. Crazy valuations for unproven business models. Seems as they've had there fair share of troubles recently on a number of fronts. Start up investing has to be undertaken with care to avoid getting fingers burnt.

Nardge

Thrugelmir wrote: »

With regards to Revolut. Do you recall the Dot Com boom. Crazy valuations for unproven business models. Seems as they've had there fair share of troubles recently on a number of fronts. Start up investing has to be undertaken with care to avoid getting fingers burnt.

Revolut have had their fair share of troubles recently on a number of fronts?
Do you have some links for that please?
Only I'm also using them for Foreign Currency Exchange and would not want to be caught out...

With Kind Regards

bostonerimus

This thread is a great example of selection bias. For every success there are several failures. Maybe you can spread the risk in a fund that invests in many startups, but they tend to be expensive. Assess the risks dispassionately before you invest and be prepared to lose.

Nardge

bostonerimus wrote: »

This thread is a great example of selection bias. For every success there are several failures. Maybe you can spread the risk in a fund that invests in many startups, but they tend to be expensive. Assess the risks dispassionately before you invest and be prepared to lose.

To be fair, people had advised the same as you previously in this thread too. Thanks for confirming though.

I myself invested in Chip when I was a relative novice in the matter

With Kind Regards

Thrugelmir

Nardge wrote: »

Revolut have had their fair share of troubles recently on a number of fronts?
Do you have some links for that please?

Revolut CFO resigns as company faces questions over sanctions screening

https://www.telegraph.co.uk/technology/2019/02/28/revolut-cfo-resigns-company-faces-compliance-questions/

Revolut insiders reveal the human cost of a fintech unicorn's wild rise

https://www.wired.co.uk/article/revolut-trade-unions-labour-fintech-politics-storonsky

jonnygee2

I do invest regularly in Crowdcube, I find it interesting to follow small companies and try to guess their successes. I also go to some of the investor events people hold when fundraising etc. I keep a spreadsheet of investments I did and didn't make, EIS relief gained etc and I track companies I invested in, and chose not to invest in over time to see how they are doing. Appreciate it's not everyone's idea of a hobby, but it works for me!

But, there's a massive caveat that I categorise it as spending. Actually, I think it's probably a form of gambling.

It is not in any way suitable as a form of saving. You have no idea when - if ever - you will see returns and there is no way to assess the risk / return rate.

I've made good investments - £200 in the first round of Monzo for example - and lots ones that were probably bad decisions. As it's a hobby I would very much like to break even or make a profit, but that doesn't mean I think about these returns when I am planning my finances.

I do think there is a massive danger that people, unaware of the risks, are using this as a primary form of saving (I have met some of them). It can be addictive, you can get sucked in and end up overspending.

bostonerimus

Nardge wrote: »

To be fair, people had advised the same as you previously in this thread too. Thanks for confirming though.

I myself invested in Chip when I was a relative novice in the matter

With Kind Regards

I'm glad that I'm not a "John the Baptist" on this and the wisdom of the crowd should tell you something. I hope your CHIP investment works out, but the success of investing in startups by some people does not make it any more sensible for the vast majority of investors who are looking to secure their retirement and finances.

Albermarle

I always thought it was noteworthy that the FCA gave their blessing to include rather risky P2P and some retail bonds in IFISA's, but drew the line at equity crowdfunding . Although in the public's mind it is all similar , equity crowdfunding is another step up the risk ladder.

Nardge

In light of the above useful and pertinent comments, I conclude matters thus:

Avoid 'Crowdfunding' unless:

- You are very wealthy
- It is a hobby that is perceived as spending (unless very lucky)
- You spread the risk in a fund that invests in many startups, and remain aware of the large expense involved.

The previous query was to see whether investing in large firms changed peoples' take on the matter. It seems not.

Thank you bosteronerimus for your wishes regarding my Chip Investment!
Fingers crossed I'll get something worthwhile back.

I think that'll be it with me and Crowdfunding though.
I'll stick with 'Innovative Finance' and 'Stocks and Shares' where the risks are considerably less...

This thread has been very helpful, thanks all for your contributions.

With Kind Regards