The Full English Accompaniment – Crowdfunding maturing

What’s piqued my interest this week?

Over the past few years I’ve watched the crowdfunding field grow, with various platforms and companies gradually expanding into robust and trusted investment sources. I’ve thought about trying Crowdfunding investments before, the 2011 Brewdog prospectus still sits on my old laptop, but I’ve always been dubious about the liquidity. As a student I chose to spend my cash on beer in my hand, rather than beer in a portfolio. Other bloggers did invest, and have been stuck trying to reduce their exposure and sell up (1). Due to this liquidity risk I lump all crowdfunding and P2P investments together, including all of the stock, property and loans in one big, high risk, ‘invest and don’t expect to get it back’ bucket. They’re all basically junk bond grade investments. The percentage returns on these investments supposedly account for this risk of losing your money.

I think my concerns are largely justified. If you look past the odd moment a few months ago when Seedrs stopped it’s own investment round due to it’s own rules, there’s been plenty of warning signs (2). We’ve had Lendy’s collapse, and there could be more on the way (3, 4). In response the FCA is bringing in new rules to clamp down on poor practice and protect investors (5, 6). The P2P and Crowdfunding market is maturing, less wild west. P2P and Crowdfunding is going mainstream (7, 8).

So, if everyone’s doing it, I might as well too. I decided it was time to start dipping my toe, as part of my satellite active investments. But for me this wasn’t about attempting to increase my returns with a >10% P2P loan, like the one Monevator affiliated RateSetter offer (9). This was about getting in on the ground floor, like I coudla-shoulda-wounda with BrewDog, with a small amount of throwaway money. I was tempted by a number of options: MoneyDashboard (too many competitors, unclear valuation and monetisation strategy) (10, 11); Curve (not happened yet) (12); Tickr (too many competitors, unclear valuation) (13). I became aware of the gameification of crowdfunding investment, and the methods employed to prey on the ‘fear of missing out’.

My first Crowdfunding investment went on FreeTrade. I missed out on the earlier round after the glitches meant it was closed before I could complete (14). I got in with a small, test the waters, investment sum on the June round (15). This means, like Weenie, I have free stocks to share (16). I have concerns about FreeTrade, not least the proliferation of other free trading apps, and the recent move of Robinhood into the UK (17, 18). If it goes tits up, then I put in enough to be along for the ride. Invest, forget, and definitely don’t bank on the returns. (And if you want a free share, contact me or leave me a comment!)

Have a great week,

The Shrink

Other News

Opinion/ blogs:

The kitchen garden:

What I’m reading (affiliate links):

Food Of The Gods: The Search for the Original Tree of Knowledge: A Radical History of Plants, Drugs and Human Evolution – Terence McKenna – An ethnobotanist explores humanitys’ fascination with hallucinogenics, and the role of altered states of consciousness on the development of human society.

References:

  1. https://gentlemansfamilyfinances.wordpress.com/2019/02/13/how-to-put-out-a-fire-use-liquidity/
  2. https://www.altfi.com/article/5635_seedrs-suspends-its-own-shares-after-entering-advanced-stages-of-a-new-funding-round
  3. https://www.telegraph.co.uk/business/2019/07/28/wake-lendys-collapse-britains-peer-to-peer-lending-bubble-go/
  4. https://www.altfi.com/article/5404_dont-panic-but-were-in-the-middle-of-a-peer-to-peer-lending-crunch
  5. https://www.fca.org.uk/news/press-releases/fca-confirms-new-rules-p2p-platforms
  6. https://www.independent.co.uk/money/spend-save/peer-to-peer-investing-maximum-limit-fca-regulation-a8947886.html
  7. https://www.moneyadviceservice.org.uk/en/articles/peer-to-peer-lending–what-you-need-to-know
  8. https://www.moneyadviceservice.org.uk/en/articles/crowdfunding–what-you-need-to-know
  9. https://monevator.com/ratesetter-high-interest-offer/
  10. https://www.insider.co.uk/news/money-dashboard-raises-46-million-18983490
  11. https://www.bbc.co.uk/news/uk-scotland-scotland-business-48349943
  12. https://www.finextra.com/newsarticle/34273/curve-set-to-embark-on-a-mighty-crowdfunding-campaign/retail
  13. https://www.altfi.com/article/5470_impact-investment-tickr-200-crowdfunding-target
  14. https://www.altfi.com/article/5290_freetrade-shutters-19m-crowdfunding-round-technical-difficulties-new-round-june
  15. https://www.cityam.com/freetrade-to-close-7m-in-second-crowdfunding-round/
  16. http://quietlysaving.co.uk/2018/05/25/wisdom-of-the-crowds/
  17. https://techcrunch.com/2019/08/07/robinhood-fca/
  18. https://qz.com/1684107/robinhood-is-heading-to-the-uk-where-it-will-compete-with-freetrade-revolut/
  19. https://www.bbc.co.uk/news/business-49356248
  20. https://www.theguardian.com/money/2019/aug/14/south-of-england-house-prices-fall-for-first-time-since-2009-brexit
  21. https://www.theguardian.com/business/2019/aug/08/house-prices-fall-unexpectedly-pre-brexit-caution-bites
  22. https://www.thisismoney.co.uk/money/mortgageshome/article-7382937/Britains-expensive-cities-including-London-Cambridge-affordable-buyers.html
  23. https://www.theguardian.com/world/2019/aug/09/chase-bank-cancels-all-credit-card-debt-for-canadian-customers
  24. https://www.thisismoney.co.uk/money/pensions/article-7333403/Government-comes-fix-doctors-pensions.html
  25. https://www.thisismoney.co.uk/money/news/article-7341053/Interest-rate-cut-cards-pound-takes-leg-down.html
  26. https://www.bbc.co.uk/news/business-49352760
  27. https://www.bbc.co.uk/news/business-49452366
  28. https://www.express.co.uk/news/uk/1164081/pensions-news-national-insurance-stamps
  29. https://www.thisismoney.co.uk/news/article-7385337/Investors-ploughed-cash-Kevin-McClouds-business-told-expect-lose-penny.html
  30. https://www.theguardian.com/commentisfree/2019/aug/14/the-guardian-view-on-brexit-and-the-economy-storm-clouds-on-the-horizon
  31. https://www.theguardian.com/money/2019/aug/18/meet-people-saving-retire-by-40-fire-movement
  32. https://www.mrsmummypenny.co.uk/financial-independence-why-i-think-it-is-unrealistic-and-unachievable/
  33. https://www.telegraph.co.uk/money/money-makeover/money-makeover-earn-36k-can-retire-15-years-age-47/
  34. https://thefifox.wordpress.com/2019/08/06/crunching-the-numbers-should-we-be-overpaying-our-mortgages-or-investing-instead/
  35. https://monevator.com/how-to-invest-as-an-expat/
  36. https://monevator.com/weekend-reading-75-not-out/
  37. https://www.mrmoneymustache.com/2019/08/22/1000-per-hour/
  38. https://www.ukvalueinvestor.com/2019/08/stagecoach-investors-bumpy-ride.html/
  39. https://theescapeartist.me/2019/08/06/milestones-on-the-path/
  40. https://theescapeartist.me/2019/08/14/heres-whats-in-it-for-you-right-now/
  41. https://theescapeartist.me/2019/08/21/getting-rich-with-property/
  42. https://cashflowcop.com/financial-independence-reality-check/
  43. http://diyinvestoruk.blogspot.com/2019/08/orsted-half-year-results.html
  44. http://diyinvestoruk.blogspot.com/2019/08/legal-general-revisited.html
  45. http://diyinvestoruk.blogspot.com/2019/08/scottish-mortgage-trust-portfolio-sale.html
  46. https://firevlondon.com/2019/08/16/how-to-become-a-millionaire-in-london-on-40k-p-a/
  47. http://quietlysaving.co.uk/2019/08/09/return-of-the-dogs/
  48. http://quietlysaving.co.uk/2019/08/19/manchester-fire-meet-up-in-sept/
  49. https://drfire.co.uk/uk-government-to-raise-the-state-pension-age-to-75/
  50. https://drfire.co.uk/my-newfound-appreciation-for-podcasts/
  51. https://www.msziyou.com/veggie/
  52. https://www.msziyou.com/intergenerational-unfairness-part-2/
  53. https://awaytoless.com/inheritance/
  54. https://www.iretiredyoung.net/single-post/2019/08/09/Early-retirement-numbers
  55. https://www.iretiredyoung.net/single-post/2019/08/23/Why-we-lie-about-being-retired
  56. https://asimplelifewithsam.com/2019/08/20/how-to-live-a-balanced-life/
  57. https://simplelivingsomerset.wordpress.com/2019/08/08/work-is-not-a-job-and-the-web-of-life/
  58. https://simplelivingsomerset.wordpress.com/2019/08/21/monzo-metal-cards-and-bullet-journals/
  59. https://gentlemansfamilyfinances.wordpress.com/2019/08/21/6-personal-finance-numbers-that-are-bullshit-2/
  60. https://pursuefire.com/pursue-fire-updates/
  61. https://indeedably.com/a-goldilocks-decision/
  62. https://indeedably.com/meltdown/
  63. https://indeedably.com/fools-errand/
  64. https://ditchthecave.com/perfect-day/
  65. https://thesavingninja.com/what-is-happiness-to-you/
  66. https://lovelygreens.com/vegetables-to-grow-for-autumn-harvests/
  67. https://agentsoffield.com/2019/08/11/its-all-systems-go-almost/
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8 thoughts on “The Full English Accompaniment – Crowdfunding maturing

  1. Long time follower and really enjoy the round ups 👍. Pretty sure that was Freetrades 4th & 5th crowdfunding round. Sounded like it was said as 1st and 2nd raise above? July 16, March 17, June 18, April 19 and most recent one but I may have misunderstood? Thanks

    Like

    1. Interesting you point this out. I haven’t really touched on the other two forms (as I see it) of crowdfunding; crowdfunding for items/ services like Patreon or Kickstarter, and crowdfunding as a charity structure, like Kiva etc. I was planning to write a post about charity, so I’ll try and include the charitable loan type structure in that.
      Cheers for following as always!

      Like

      1. my personal belief is that whilst watching dragon’s den is fun – putting your money into these schemes is a good way to lose it all. You are essentially funding other people’s dreams (and nightmares) and the ones that look the best to the naive investor are the ones that have more snake oil than substance to them.

        Liked by 1 person

  2. Cheers for the shoutout as always.

    My crowdfunding investments (in Brewdog and Freetrade) are just for fun – if I make anything from them, it’s a bonus.

    Think I posted briefly about Kiva a couple years ago and I continue to crowdfund loans – would love to read your take on charity crowdfunding.

    Liked by 1 person

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