Shuttle - Private Equity, Venture Capital

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hadrian

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Just wondering what peoples thoughts on shuttle.com are ...https://joinshuttle.com/

Is anyone here a member? What do you think of the platform etc?

The idea does appeal to me, they are regulated by the central bank of Ireland....

But I cant help feeling I would be way outside my admittedly tiny zone of competence!

I have read the potential risks and I feel I am comfortable with them all as long as there is a potential exit even on a long term time frame, 20+ years, but I don't think I have the expertise to verify answers to questions like

1) do you really do own a share of the underlying company which you would still own should the platform go bust for whatever reason? Do you have proof of this, share certs electronic or otherwise etc? - How do you declare to revenue...same as shares in a publicly quoted company?

2) were I to commit to investment at the minimum end of the range is it essentially too small an investment to really deliver a large gain on a company that does rapidly increase in value....or is it proportional like investing in publicly quoted shares/equities? .........basically would larger investments be getting better classes of shares or more voting rights or more upside in someway I'm not aware of (beyond just more value appreciation simply because the own more of a stake)

3) How big of a dilution does subsequent rounds of funding typically cause for a successful company?........should initial rounds not stand to make the most profit for getting in early and taking the initial risk when the company was a fledgling company etc?

These questions probably betray my lack of experience so just hoping people would give their thoughts
 
hadrian said:
just hoping people would give their thoughts
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Shuttle sounds like the sort of very high risk option that only those already very financially comfortably off should be considering...
joinshuttle.com

The fastest way to run a syndicate or SPV in Europe

Onboard investors, collect capital, measure performance, and manage everything end-to-end in one compliant workflow.
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1. LOSS OF CAPITAL​

Most start-up companies fail. This means that if you invest in any company through our platform, it is more likely that you will lose all of your investment than it is that you will see a return of capital or a profit. You should not invest amounts that you can afford to lose without altering your standard of living.
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The last sentence above doesn't really make sense. I presume that they meant "you should only invest ..."?

5. DIVERSIFICATION​

Investing in start-up companies should only be done as part of a diversified portfolio. This means that you should invest smaller amounts in a larger number of companies rather than larger amounts in a smaller number of companies. Investing in start-up companies should be seen as relatively risky with the majority of your portfolio invested in relatively safer, more liquid assets.
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The full Shuttle Membership Agreement is available online, so answers to technical questions (like "Do I actually own shares in the enterprises that I invest in?") will be found there . But note that it's 27 pages long and, while it seems to be very clearly written, unless you have some background in securities law and practice you're probably going to want competent professional advice to understand in detail how it works.
hadrian said:
should initial rounds not stand to make the most profit for getting in early and taking the initial risk when the company was a fledgling company etc?
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Well, that's the basic idea with venture capital. Venture capital is attractive precisely because small enterprises, growing from a small base, have the capacity to grow at rates that large enterprises are unlikely to acheive. Plus, for a given sum you can buy a larger share of the enterprise when it's a startup than you will be able to do in later rounds of fundraising, when it's semi-mature.

But nobody can guarantee explosive growth in the early years — as pointed out above, most small enterprises in fact fail. And no enterprise seeking investment will provide any kind of guarantee agains subsequent dilution — that would effectively be promising to limit or deprive themselves in future of capital that they might need in order to grow most advantageously.
 
I am not familiar with Shuttle but the promotion of private equity to the retail market is a worry. Previously it was the reserve of the wealthy, people who would put a portion of their money away for a long time without any need to access it. The retail investor does not fit this profile. Money in private equity can be locked away for 10-15 years as the investment plays out. There is an increased risk of losing all your money (in return, there is the potential for higher returns than the listed equity market).

It is certainly not suitable for all your money and definitely not if you have less than a 10 year investment term.

I will not be recommending any private equity investment to my clients. I have seen far too many of them invest in them previously and not be able to get their money out when they need it.
 
Steven Barrett said:
the promotion of private equity to the retail market is a worry.
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The explanation is very simple. They know they are overvalued. Know they have a load of less than average companies and they want to offload as much as possible onto joe punter before the crash.
I'm reminded of that Tim Nice but Dim, Harry Enfield sketch.

As Warren Buffet says in investing you get what you don't pay for - i.e. the high fees of private equity eat your lunch.
 
Steven Barrett said:
I am not familiar with Shuttle but the promotion of private equity to the retail market is a worry.
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Just curious, are there other similar operations in Ireland/EU marketing private equity investments to retail punters?
Steven Barrett said:
Previously it was the reserve of the wealthy, people who would put a portion of their money away for a long time without any need to access it.
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Isn't this why, for example, the likes of hedge funds can only be marketed in the US to institutional and very high net worth individuals? Not sure if similar rules apply in the EU? But sounds like the sort of thing that should probably apply to private equity investments too?
 
ClubMan said:
are there other similar operations in Ireland/EU marketing private equity investments to retail punters?
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They are cropping up. I don't pay too much attention to them as I won't be recommending them to clients.

ClubMan said:
Isn't this why, for example, the likes of hedge funds can only be marketed in the US to institutional and very high net worth individuals? Not sure if similar rules apply in the EU? But sounds like the sort of thing that should probably apply to private equity investments too?
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A similar rule applies in Ireland as a Qualified Investor. They need to be an "informed investor or are confirmed as such by a financial institution and the minimum entry is €100,000. I don't know how firms circumvent these rules. I remember when Eddie Hobbs launched Brendan Investments back at the end of the Celtic Tiger, he had a €5,000 entry point. I knew it would end in disaster. All geared property investments were €100,000 entry before that. He was selling it to those with small amounts of savings and who trusted him based on his tv show.


Another thing about the private equity funds is investors won't know what's in it. High end investors have advisors and lawyers to read contracts and identify flaws (as well as having the spare capital). Retail investors just want private equity, many won't even know the underlying investments. This is going to lead to them being repackaged with some decent deals and some absolute tripe that they know will fail but are getting big fees for.

Private equity is something that works but the selling of private equity funds to retail clients is something I really fear will blow up and cost people a lot of money. I have a real fear about this.
 
Corola said:
Retail investors can buy private equity ETFs, for example iShares Listed Private Equity UCITS ETF.
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I am so happy this is the case. Not because retail investors should buy them (they shouldn't), but because since their inception, private equity have been very opaque as to their fees and their actual returns. I assume here the fees will still be opaque, but there will be no arguing with the returns.
It will be interesting to hear what the excuses are in 5-10 years time as to why they haven't beat the market.
 
Also the ETF will expose the real volatility that is also hidden by private equity and which is used as one of their biggest selling points.
 
Trade Republic have started marketing private equity funds directly to retail investors:

Trade Republic Private Markets

Trade republic have just launched a new asset class called Private Markets, giving you the ability to invest in non stock exchange listed companies (hence the private part) via the Apollo and EQT funds. Their in app explainer marketing does nothing for me - watching a guy eating a fancy meal...
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hadrian said:
were I to commit to investment at the minimum end of the range is it essentially too small an investment to really deliver a large gain
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How much do you intend to invest? The fees are very high for small investments.

How fees are charged at Shuttle​

We operate on a subscription model, charging investors €250 annually for platform access and a 10% performance fee on any realised gains. We do not charge transaction fees or commissions on investments.
 
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iShares Listed Private Equity UCITS ETF is not a private equity fund.

That fund tracks an index of listed private equity companies (ie the big, publicly traded, PE managers). If you invest in a global equity index fund, you already hold a position in these companies in proportion to their respective market caps.

I agree with Steven - retail investors should steer clear of PE funds.

However, if you insist, I would go for something like HVPE (a highly diversified, publicly traded, UK investment trust) and would limit your holding to no more than 10% of your overall equity holdings.
 
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Private equity suggested here, but only for "accredited investors" whatever that means. :rolleyes:
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When considering ways to grow and preserve wealth outside of traditional deposit accounts such as savings or current accounts, there are several innovative and effective saving structures.
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9. Venture capital and private equity
  • Investing in startups or private companies through venture capital funds or private equity.
  • High-risk, high-reward structures that require substantial capital and patience.
  • Suitable for accredited investors seeking diversification outside traditional markets
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Private Equity seems to be the new force in global capitalism, super unregulated and growing potentially unstable debt...here be dragons?
 
On the Regulation of the Shuttle platform itself

“We could have looked at getting authorised elsewhere in Europe, which we were told would have been easier and quicker but we wanted the CBI’s rubber stamp,” said Mr Halligan. “It’s well known that they’re the gold star when it comes to regulation in Europe, and we think it will help show just how dedicated we are to building a safe and trustworthy business.”
 
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