A :Ordinary Shareholders have pre-emption and voting rights (subject to the company’s Articles of Association and the Companies Act 2006).
B : Investment Shareholders (generally “the Crowd” given the price barrier to A shares) do not generally receive pre-emption rights, meaning there is a higher risk of dilution. Generally, B Investment shares also do not carry voting rights.
The different rights afforded by each share type typically reflect the amount invested by investors. The company raising funds can set the threshold of investment required in order to obtain A Ordinary shares.
CROWDCUBE PROCESS
Making an equity investment
When you invest in equity you buy a percentage or share of a business in the hope that the value of that company will increase over time. Hopefully the business you have backed goes on to make an ‘exit’ at a higher value than when you invested, and you will get a return on your investment and make a profit. Please be aware, investments of this nature carry risks to your capital.
Step one: join the crowd
Joining Crowdcube is free, takes less than 60 seconds and carries no obligation to invest. You are required to take a short quiz to make sure you understand the risks of investing.
Step two: find your inspiration
Once you’ve joined you’ll be able to view the full pitch, including the video and discussions. You will also be able to request access to the company’s Restricted Documents. You can also ask for further information or interact directly with entrepreneurs using our discussion boards.
Step three: invest from just £10
When you find a business you like you can invest directly through the pitch page. Simply enter the amount that you wish to invest, which can be anything from £10 to the full amount that the business is seeking to raise, click ‘invest’ and that’s it you’ve made an investment!
Step four: we’ll sort the paperwork
Once the pitch funds and is closed to further investment, we will be working in the background to complete the round. At this stage, you’ll receive a copy of the company’s proposed Articles of Association, you will also be notified of a 7-day cooling off period so you can review the Articles and consider your investment. After the cooling off period, your investment will become legally binding and we will capture the payment for your investment.
Step five: you’ll receive your share certificate
Congratulations – your investment is complete! Approximately 5-10 working days after the payment for your investment has been processed, we will issue your share certificate on behalf of the business. If you and the company qualifies, we’ll also handle any EIS/SEIS forms and send them out to you as soon as they are completed.
Once the pitch has funded and has closed to further investment, you will receive a cooling off email, which includes a copy of the company’s Articles of Association for you to review.
During this cooling off period, which is generally no shorter than seven days, you’ll have the opportunity to review your investment before it becomes final. Once this cooling off period has expired, we’ll send you an email confirming when your payment, which includes your investment and Crowdcube’s investment fee, will be collected.
