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Asset 1005


A Wee Cracker from Seedrs

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As explanation, SkinnyBrands raised over £400k on Seedrs in February 19. Valuation pre money of £10m. Three months later they have sold 37.5% of the company at a pre money valuation of less than £900k. It is almost impossible to know this and read the email below without falling off a chair. Try it. 

Dear SkinnyBrands investors

Following an update from the company we wanted to provide you with more details on SkinnyBrands’ most recent investment round and how this has led to changes to the shares reflected in your portfolio account.

As communicated by Tom, the company has received further investment from Mosaic private equity group. The investment was for 37.5% of the company and the share price, as indicated in your portfolio, was £0.72. This gives an overall post-money valuation for the company of £1,422,236.88.
The reduction in the valuation has primarily been driven by the requirement of the incoming investors to receive 37.5% of the company. The company felt that it needed to accept such terms due to the ongoing cash requirements of the business.

Because this round came so soon after closing the prior round, Seedrs agreed with the company and the incoming investors that the round would be structured so that Seedrs investors would not be diluted.

As a result the Seedrs Nominee was awarded a bonus issue of shares to be held pro-rata on behalf of the Seedrs investors. This has been reflected in your investment account, and the number of shares attributed to you has been increased by 42.87595%.

We would like to emphasise here that Seedrs have worked closely with the company and the incoming investors to ensure that the rights attaching to the Seedrs investors’ shares have been preserved throughout this process, as well as the ownership position of those who invested via Seedrs.

Therefore the overall effect for those who invested in SkinnyBrand’s previous round via Seedrs will be as follows:

a. your overall ownership in the company remains the same (i.e. it has not been diluted); and
b. the price of each share held by you has been reduced from £8.11 to £0.72, to reflect the share price used in the most recent round.

The company is willing to answer any further questions that you may have in relation to this update.

Kind regards
The Seedrs Team

Friday June 7, 2019

Hardman and Co’s Brian Moretta in conversation with ECF Buzz Founder Rob Murray Brown on start up investing, equity crowdfunding and what’s a good read.