ForCrowd20 Jul 2020 13:45
ForCrowd
Clear Leisure bought 20% of ForCrowd last October for 54,218,847 shares technically worth at the time £189,000. The nominal value of the 54 million shares issued was £135,500.
FG structured the deal with ForCrowd: “As part of the terms of the investment, Clear Leisure will be entitled to a referral fee on all clients and investors introduced by the Company to ForCrowd. The referral fee will be 1% of the total amount raised for any projects Clear Leisure introduces to ForCrowd and it will receive an additional 3% of funds invested into a project by an investor introduced by the Company.”
Last Friday ForCrowd introduced a new campaign for “Meta Wellness” with a minimum goal of raising €500K. Meta Wellness is aiming for a turnover of over €15 million.
Back of envelope calculation: say they raise €1 million. Assume FG introduced the company, then due 1% of €1 million = €10,000 and say FG also has introduced investors who contribute say €200,000 then 3% = €6,000. Then Clear Leisure would have income of €16,000. Ok our detractors will say that is not much but it would still be positive for us.
So what changed last Friday? Well you should know that you have to be an Italian Tax Payer to invest in ForCrowd and that you can receive up to 50% Income Tax benefits but what ForCrowd have done is “guaranteed” founding investors a Right to be refunded 65% of investment after 4 years and 20% discount on existing products and future products.
With translation they said:
“Given that this is a risky investment, there can be no guarantee on the part of the issuer, the innovative start-up, to buy back the shares, it is possible, in line with the growth objectives declared by the company, to foresee that to achieve the same, for example after four years of investment, for the only special class of shares issued at the service of the crowdfunding campaign , the company can intervene on capital, remunerating crowd investors, for example, with 65% of the investment..”
“In this way, in the event of a tax benefit of 50%, the investor who has invested a total of 100 euros, has in fact taken a risk of a .50, which, if remunerated with a total of 65, in four years, not only allows him to return from the investment, but also to cash in a return of almost 7% on an annual basis, remaining at the same time as a shareholder, thus with the possibility of further valuing his shares at the time of the listing. , or the sale of the company.”
From my contacts in Italy I believe we will see a number of successful ForCrowd investment projects solely because of the potential substantial tax benefits.
RKB
PS Nice to see you bought back-in LtdAxis, will you be here for the Company Udate?
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