Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@. Skimlinks & other affiliated links are turned on

Search
  • FIRST POST
    • stevec59
    • By stevec59 9th Nov 18, 5:22 PM
    • 237Posts
    • 18Thanks
    stevec59
    Invest in Chip Series A
    • #1
    • 9th Nov 18, 5:22 PM
    Invest in Chip Series A 9th Nov 18 at 5:22 PM
    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
Page 1
    • coyrls
    • By coyrls 9th Nov 18, 5:32 PM
    • 1,089 Posts
    • 1,163 Thanks
    coyrls
    • #2
    • 9th Nov 18, 5:32 PM
    • #2
    • 9th Nov 18, 5:32 PM
    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
    • By Zanderman 9th Nov 18, 5:52 PM
    • 1,860 Posts
    • 4,563 Thanks
    Zanderman
    • #3
    • 9th Nov 18, 5:52 PM
    • #3
    • 9th Nov 18, 5:52 PM
    I guess it's a good investment?
    Originally posted by stevec59
    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
    • By masonic 9th Nov 18, 6:12 PM
    • 10,135 Posts
    • 7,427 Thanks
    masonic
    • #4
    • 9th Nov 18, 6:12 PM
    • #4
    • 9th Nov 18, 6:12 PM
    Thoughts please.
    Originally posted by stevec59
    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
    • By londoninvestor 9th Nov 18, 6:42 PM
    • 437 Posts
    • 358 Thanks
    londoninvestor
    • #5
    • 9th Nov 18, 6:42 PM
    • #5
    • 9th Nov 18, 6:42 PM
    Today I received a Chip Chat inviting me to Invest in Chip Series A, I presume lots of people have received the same
    Originally posted by stevec59
    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
    • By stevec59 10th Nov 18, 11:21 AM
    • 237 Posts
    • 18 Thanks
    stevec59
    • #6
    • 10th Nov 18, 11:21 AM
    • #6
    • 10th Nov 18, 11:21 AM
    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
    • By masonic 10th Nov 18, 11:35 AM
    • 10,135 Posts
    • 7,427 Thanks
    masonic
    • #7
    • 10th Nov 18, 11:35 AM
    • #7
    • 10th Nov 18, 11:35 AM
    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?
    Originally posted by stevec59
    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
    • By pmjenkins 10th Nov 18, 5:25 PM
    • 106 Posts
    • 38 Thanks
    pmjenkins
    • #8
    • 10th Nov 18, 5:25 PM
    • #8
    • 10th Nov 18, 5:25 PM
    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?
    Originally posted by londoninvestor

    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
    • By jimjames 10th Nov 18, 5:57 PM
    • 12,821 Posts
    • 11,553 Thanks
    jimjames
    • #9
    • 10th Nov 18, 5:57 PM
    • #9
    • 10th Nov 18, 5:57 PM
    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.
    Originally posted by stevec59
    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.
    Remember the saying: if it looks too good to be true it almost certainly is.
    • Alexland
    • By Alexland 10th Nov 18, 6:08 PM
    • 3,656 Posts
    • 2,995 Thanks
    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.
    Last edited by Alexland; 10-11-2018 at 6:11 PM.
    • ecnirp98
    • By ecnirp98 12th Nov 18, 9:23 PM
    • 22 Posts
    • 6 Thanks
    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
    Last edited by ecnirp98; 12-11-2018 at 9:38 PM. Reason: not FSCS
    • dont_use_vistaprint
    • By dont_use_vistaprint 12th Nov 18, 9:46 PM
    • 136 Posts
    • 32 Thanks
    dont_use_vistaprint
    Its interesting that many millennial an gen-z trade interest and credit card rewards for a novel approach like this, a bit like Monzo offers no interest or switching incentive yet had waiting lists for current accounts. Based on this I'd say it could be good investment & theres not much fintech about in savings.
    • ecnirp98
    • By ecnirp98 12th Nov 18, 9:50 PM
    • 22 Posts
    • 6 Thanks
    ecnirp98
    The worrying thing about CHIP is that it is targeted at people who struggle to save regularly, by taking smaller amounts that build up over time, but are these the type of people who can afford to invest upto £1200 and not see it again for a long time? I think allot of people are seeing this as way to make a quick killing, there are quotes from people on the forum area of £500 invested to being worth £60,000 in 5 years, which would be nice !!!

    Their model appears to be hoping they are bought up, which is possible.
    • surreysaver
    • By surreysaver 13th Nov 18, 4:36 AM
    • 2,598 Posts
    • 1,494 Thanks
    surreysaver
    I clicked the link to state my interest in the investment, but didn't like the pressure I was put under to invest by having a deadline. So I didn't invest. Seems a bit dodgy to me.
    I consider myself to be a male feminist. Is that allowed?
    • masonic
    • By masonic 13th Nov 18, 7:04 AM
    • 10,135 Posts
    • 7,427 Thanks
    masonic
    I think allot of people are seeing this as way to make a quick killing, there are quotes from people on the forum area of £500 invested to being worth £60,000 in 5 years, which would be nice !!!
    Originally posted by ecnirp98
    With venture funding such an outcome is possible, but the much more likely scenario is that £500 invested will be worth nothing in 5 years.
    • Zanderman
    • By Zanderman 13th Nov 18, 7:27 AM
    • 1,860 Posts
    • 4,563 Thanks
    Zanderman
    The worrying thing about CHIP is that it is targeted at people who struggle to save regularly, by taking smaller amounts that build up over time, but are these the type of people who can afford to invest upto £1200 and not see it again for a long time?
    Originally posted by ecnirp98
    Agree this is the oddest thing about this.

    Inviting investment with no guarantees of a return and possible a loss (which is what this is, despite the hype) is one thing.

    But doing this to a group of people who've been signed up because, in essence, they have difficulty saving is another thing entirely. Arguably very irresponsible.

    I'm with Chip purely for the benefit of a a direct debit on an account that I need a 'spare' DD not because I can't save. So I'm not their original target audience - and I assume I'm more savings-savvy than that target audience. I've had all their invitations to invest in the last couple of weeks - but I'm not going to touch them with a barge-pole. Too risky for me.
    • dont_use_vistaprint
    • By dont_use_vistaprint 13th Nov 18, 8:16 AM
    • 136 Posts
    • 32 Thanks
    dont_use_vistaprint
    The worrying thing about CHIP is that it is targeted at people who struggle to save regularly, by taking smaller amounts that build up over time, but are these the type of people who can afford to invest upto £1200 and not see it again for a long time? I think allot of people are seeing this as way to make a quick killing, there are quotes from people on the forum area of £500 invested to being worth £60,000 in 5 years, which would be nice !!!

    Their model appears to be hoping they are bought up, which is possible.
    Originally posted by ecnirp98
    No they are not, not now at least, they are students and low paid workers who struggle to save anything! :-) Investors and users have very different aims, and its probably not even ethical to target the users with this , knowing this as they do.
    • stevec59
    • By stevec59 13th Nov 18, 6:09 PM
    • 237 Posts
    • 18 Thanks
    stevec59
    I decided not to invest, but thanks to everyone that replied

    Steve
    • londoninvestor
    • By londoninvestor 13th Nov 18, 9:21 PM
    • 437 Posts
    • 358 Thanks
    londoninvestor
    From the link posted above:

    Making an equity investment is a commitment. Unlike buying shares in a public company, which you can trade any time, buying a stake in a startup means you donít get your money back until the company Ďexitsí.

    There are a couple of ways you might get your money out of your investment in Chip:
    • We take investment from a VC firm who offers to buy out some (or all) earlier investors
    • We are acquired (bought by) a bigger company
    • We go public in an Initial Public Offering and list our shares on the stock exchange

    If any of these things happen, youíll make a profit from your initial investment.
    by Chip
    The line in bold surely cannot be stated as an unqualified truth. The business could struggle, and end up being acquired, but for less than investors paid for it.
    • Malthusian
    • By Malthusian 14th Nov 18, 9:45 AM
    • 4,916 Posts
    • 7,924 Thanks
    Malthusian
    You invest via the Crowdcube platform.
    Originally posted by pmjenkins
    I'm out.

    This is the same outfit that pays "interest" based on how many people you recruit into the scheme, and claims to offer "savings" that aren't FSCS protected.

    Having built their suc...cesfully compiled list of people financially inexperienced enough to go for this, now they are raising money from them for angel investment into a loss-making micro-cap startup. After they have verified that they are all high-net-worth and sophisticated investors and that investing in this garbage is potentially suitable for them. Yes.

    I bet Initiative Q will be next up on CrowdCube.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

2,270Posts Today

8,380Users online

Martin's Twitter