Microcosm - 2nd Seedrs crowd-funding round

Are you sure you are reading that email right?

The price hasn't gone down, it's gone up substantially. More shares are being issued, and the email is covering the purchase of shares, by existing investors, to preserve your current % position.

If you have questions, then Seedrs will be able to clarify the math if it's been presented in a way that has caused confusion.

simply put,

First round: 10% of the company was sold for £50,000. total valuation: £500,000
Second round: an additional 5% of the company is being sold for £100,000. new valuation: £2,000,000.
so shares purchased in the first round are now worth about 4x more than when you bought them.

Email received and money forwarded to seedrs...

Awaiting D-Day.

Are you sure you are reading that email right?

The price hasn't gone down, it's gone up substantially. More shares are being issued, and the email is covering the purchase of shares, by existing investors, to preserve your current % position.

If you have questions, then Seedrs will be able to clarify the math if it's been presented in a way that has caused confusion.

Obviously the price of the company has increased... this is clear.

I was just checking what maths had been done to get to the new share price (ie, how many new shares make up one old share). Do I still have 50 shares, now worth £40 each or will they be diluted by the new share issue so I will have 1,342 shares each worth £1.49.

It's more of a technical point rather than a fundamental where the fuck has my money gone question.

maths...

maths...

Typo (now edited) rather than the adoption of a shit Americanism

Obviously the price of the company has increased... this is clear.

I was just checking what maths had been done to get to the new share price (ie, how many new shares make up one old share). Do I still have 50 shares, now worth £40 each or will they be diluted by the new share issue so I will have 1,342 shares each worth £1.49.

It's more of a technical point rather than a fundamental where the fuck has my money gone question.

You have the same number of shares, but they represent a smaller proportion of the total number of shares in circulation, so you own a smaller proportion of the company. However, the current financing round puts a higher value on shares in circulation. Of course, to realise that value now you'll have to find a buyer for them, and you may lose some tax breaks (see small print).

Right, Seedrs are going to respond, and I don't want to muddy the water before they do so.

They'll respond on this thread, and may also send a clarification email if it's still not clear.

Which means, you might want to make questions to Seedrs clear so that they can see what they need to answer and address.

You have the same number of shares, but they represent a smaller proportion of the total number of shares in circulation, so you own a smaller proportion of the company. However, the current financing round puts a higher value on shares in circulation. Of course, to realise that value now you'll have to find a buyer for them, and you may lose some tax breaks (see small print).

Then this is where i'm confused... the email status the new share value as £1.49 which is a lot lower than the £10 initial purchase. I was expecting it to be higher.

Then this is where i'm confused... the email status the new share value as £1.49 which is a lot lower than the £10 initial purchase. I was expecting it to be higher.

£10 was not the original share price. The original price was 43p (and some further decimal places).

£10 purchased 23 shares.

I suspect (but do not know for sure), that they've presented the wording of the original investment in a way that suggests that the share price was £10, when it was not.

Seedrs will clarify, but the original share price was approx' 43p, and for every £10 you invested you got 23 real shares.

Then maybe it's my share certificate that has an error:

CERTIFICATE OF BENEFICIAL OWNERSHIP
This certifies that Soul (the “Beneficial Owner”) is the beneficial owner of **50 **ordinary shares, nominal value £0.000001 each (the “Shares”), of Microcosm CC Limited, a limited company formed under the laws of England & Wales with registration no. 08206192.

HOLD THE PRESSES!

Ooops... just gone back through my old correspondence with Seedrs and spotted a second share certificate was issued because of this exact issue.

Nothing to see here.

Praise be!

Yup... turns out I was just being an idiot.

If anyone needs my, i'll be posting a picture of myself in the Epic Fail thread.

Nice one, VB... Just emailed Tom to clarify how much cash I need to get ready to avoid dilution...

Might even buy a few more in the second round....

How would this work with SEIS and tax returns? Because the first round was done in January I presume that goes on the return I'm going to do now? Then this topping-up will count as a new investment in this tax year?

Is there an idiot's guide to getting the form filled-in right to claim SEIS tax relief? I hate forms...

Trying to get on board with seedrs. Have to supply NI number and driving license number by email. Maybe cause I'm forrun?

It amuses me that i got denied the chance to invest via seedr because of my answers, but some of you lot were allowed :p

There's nothing intrinsically bad about being diluted if the new valuation is higher than the old - unless you need to hold on to voting rights, which I don't think is the case for many people here except VB.

In. Amazingly fast turnaround. Now where did I put my wallet?

no email yet…

Check junk/spam.

Hi everyone

A bit of clarification about how this is going to work, mainly re-iterating other answers already given above. Sorry if it wasn't clear in the email. Feedback much appreciated, as ever.

(1) The first round of funding for Microcosm was raised at a valuation of £500,000.

The minimum investment on Seedrs is £10.

As the price per share was 43p, £10 got you 23 shares.

(2) The second round will be at a £2,000,000 valuation.

Under our subscription agreement that those who invested first get the ability to retain their original percentage ownership (which would otherwise be diluted as new shares are issued) by investing more money, up to the limit noted in your email this morning). This happens before the offer is opened up to the rest of our membership.

The email sets out how many shares each investor would be able to subscribe for to maintain their holding. As the valuation of the company has gone up, as has the share price. It'll now cost investors £1.49 per share.*

Everyone will get the opportunity to top up their ownership after the pitch has gone fully live, which will be on the usual "first-come, first-served" basis.

When it comes to SEIS, it's not possible under the rules of the scheme for investors to claim the relief until the company which has issued the SEIS-eligible shares has either spent 70% of the money, or traded for 4 months. As ever with HMRC, there is a form-riddled process to work through. Microcosm will file a form SEIS1 once it has hit the criteria to claim the relief. HMRC then send back a set of forms SEIS3. We'll help fill them out and sent to individual investors to file with their tax returns. All the detail's here.

I'll try to stick around here if there's anything else I can do to help.

• NB the minimum investment will remain £10 (well, actually £10.43, which will get you 7 shares at £1.49).
  

What's happened to Jeff Lynne?

Has he gone back to record with Bev Bevan, Kelly Crowcut and Mick Kominski?

Frank. can you comment on how this funding round compares with other early-stage rounds, in terms of funds raised per % of the business given to external investors? £100k for a 5% stake must put it in the top decile, no?