An opportunity to share in our future via SEEDRS

At The Clubhouse our success to date has been a result of both the strong membership base we have and having welcomed so many people through our doors. We are now looking to grow and expand The Clubhouse, and in doing so we would like everyone who has contributed to our growth and success to date to be able to be part of this. As such, we would like to share with you details of an equity raise that we have launched using the SEEDRS platform.

We have had a great response following the initial announcement of our expansion plans, and have compiled some commonly asked questions and answers. Please click on each question to read the full answer.

Q: Who are the typical members of The Clubhouse? Are your members predominantly start-ups or larger businesses?
Q: Don’t some of these big companies already have an office? Why would they be members of The Clubhouse and what is the benefit to their business?
Q: Is the market for business clubs, co-working spaces and serviced offices getting more competitive?
Q: Much has been written about London office rents. What are your thoughts on this and how does this affect The Clubhouse?
Q: Is the market growing? What are the opportunities for The Clubhouse?
Q: How cyclical is your business? What about in an economic downturn?
Q: Why are you looking to raise capital in this way and using SEEDRS?
Q: Is there a minimum investment amount? How do I invest?
Q: Are there any other benefits available if I invest?
Q. Tell us more about your longer term plans for The Clubhouse?
Q: How will investors see a return? What are the exit plans?

 

Q. Who are the typical members of The Clubhouse? Are your members predominantly start-ups or larger businesses?

A: We are currently home to over 250 companies and have a diverse membership base drawn from almost every industry sector. This therefore gives our business strong foundations as we are not over reliant on demand from a particular sector and furthermore, with lots of people doing lots of different things, this makes The Clubhouse a great ecosystem in which members can meet, work, collaborate and grow. Whilst we have a number of dynamic start-ups and early stage businesses, the vast majority of our members and clients are either successful SMEs which are growing and scaling up, or very well-known, large blue-chip organisations such as Tesla, BBC, Facebook, Mondelez, Lazard, UBS, Grosvenor, and Richemont. With relatively few start-ups and being home to more established businesses, we have a high level of member retention. (back to top)

 

Q. Don’t some of these big companies already have an office? Why would they be members of The Clubhouse and what is the benefit to their business?

A: Many growing businesses or established organisations don’t have a central London office and if they do, they often don’t have enough meeting space either for formal board meetings or informal client or staff catch ups, where they may still go out to local coffee shops or hotel lobbies. So whether a company has an office in central London or not, at The Clubhouse we provide a professional, flexible and cost effective alternative.

Furthermore, we are currently witnessing a paradigm shift where many modern businesses no longer want the fixed overheads and hassles of a long term lease associated with their own office space but instead are starting to ‘consume’ office space as a ‘service’ allowing their business to be more agile with a lower fixed cost base. Do you remember when you used to have to buy a piece of software for your computer on a CD or back up files on a hard drive? Well now you no longer buy and own that software but rather download and licence it on demand, or store files remotely in the cloud also allowing you the flexibility to access your files wherever you may be.

Some people will always want a desk and their own space, but advances in mobile technology and cloud computing have created the concept of ‘cappuccino commerce’ which has changed the way many people work. In addition, we know that with many of our members, key to employee recruitment and retention, is providing their staff with design led, flexible space in which to work or meet and a dedicated team on hand to attend to their every need. (back to top)

 

Q: Is the market for business clubs, co-working spaces and serviced offices getting more competitive?

A: There has been a strong increase in the number of new spaces over the past year, not only in London but around the world. Different types of companies need different types of workspace, so we are in a growing market where there is room for many operators to co-exist through clear product and service differentiation. We firmly believe that The Clubhouse is different to most: We are not a typical co-working space or serviced office, but a smarter alternative offering flexible meeting space, individually designed meeting rooms, hot-desks, a range of virtual office solutions and everything a business needs without the overheads of an office. We fill a gap between a serviced office or co-working space on one side and meeting in a hotel lobby or coffee shop on the other. The Clubhouse is different and put simply, we believe there is no one doing what we do, the way we do it. (back to top)

 

Q. Much has been written about London office rents. What are your thoughts on this and how does this affect The Clubhouse?

A: Office rents have risen across central London over recent years as the economy has recovered and many new businesses launch and grow. This is against a back drop of a constrained supply of suitable office space in part due to the fact that many buildings have been converted into residential property. Therefore with an imbalance between supply and demand, rents have risen strongly. Whilst rent is our largest cost we are still able to secure attractive lease terms on space that is not suitable for many occupiers, proven by what we secured last year at Grosvenor Hill and more recently on St James’s Square. With rents rising, many growing and larger business are becoming increasingly reluctant to take on their own central London offices, so therefore the demand for flexible alternatives such as The Clubhouse is increasing strongly in parallel. (back to top)

 

Q. Is the market growing? What are the opportunities for The Clubhouse?

A: Yes, absolutely: Some statistics:
There are around 5.4 million companies in the UK with only around 200,000 currently using flexible workspace solutions: we are only at the very beginning of a new paradigm, with huge potential.
There are around 4.5 million self-employed people in the UK.
Around 550,000 new business were launched in the UK last year.
In the City of London (Square Mile) alone, there are 2,250 businesses employing 18,000 people, ie an average of 8 people who are currently based in serviced offices.

The amount of serviced office space in The City has quadrupled over the past 20 years and is forecast to double again over the next 10 years.
Population growth, particularly in London and with Crossrail opening in 2018 (including a station on Bond Street very close to The Clubhouse at 50 Grosvenor Hill), more and more business people will be looking for somewhere to meet and work in London. (back to top)

 

Q. How cyclical is your business? What about in an economic downturn?

A: Whilst no business is completely immune from macro-economic factors, we believe we have a strong business model in times of both economic growth and economic weakness: The original idea for The Clubhouse started to develop shortly after the onset of the previous financial crisis where many people either lost their jobs and set up their own business or realised that they may be better off working for themselves. By joining The Clubhouse such people and their business can have a sophisticated central London presence from Day 1 and without the upfront costs or risks associated with traditional office leases. In times of growth and when many businesses don’t quite know at what rates they will expand, The Clubhouse offers a range of flexible membership solutions. (back to top)

 

Q. Why are you looking to raise capital in this way and using SEEDRS?

A: At The Clubhouse everything we do is designed around the needs of our members, and underlying this is the single aim of making our members and their business more successful. We are currently raising capital to replace our first site which we opened to test the model with a larger, purpose-designed site in which we can offer a broader range of products and services, along with the aim of opening two Clubhouses in The City. Our growth to date has been driven by our members and we would like those who love what we do and those who we have supported in their growth to share in this opportunity and our future success. Equity crowdfunding has really come of age over recent times and is recognised by many as a strong source of growth capital which also giving the business a broader shareholder base and help us to build awareness further. With 825 individual members, 250 companies and having welcomed almost 20,000 visitors to The Clubhouse through our doors, this seemed like a natural thing to do. (back to top)

 

Q. Is there a minimum investment amount? How do I invest?

A: There is no minimum investment amount and currently as you will see on the SEEDRS website, we have over 45 investors who have invested from £10 up to £200,000. You can also invest anonymously via the SEEDRS platform. All investments via SEEDRS will be held in their nominee structure however for larger investments, there is the possibility of investing directly with us. We have also raised money in addition to what is shown on the platform and are in advanced discussions with a number of members and external investors. (back to top)

 

Q. Are there any other benefits available if I invest?

A: Yes:
If you are not a member of The Clubhouse, invest £1,000+ to receive two FREE Day Memberships worth £130 and FREE entry to our guest speaker evenings.
Current members who invest £1,000+ will receive a special membership card so you are instantly recognised on arrival at The Clubhouse.
Invest £2,500+ to receive 1 hour FREE meeting room use per month for 12 months.
Invest £10,000+ to be invited to join our Members’ Advisory Board to help shape the future of The Clubhouse.
Invest £25,000+ to receive 12 months Individual Club Membership or a Meeting Room Package for your business worth £2,450. (back to top)

 

Q. Tell us more about your longer term plans for The Clubhouse?

A: With two locations in Mayfair, The Clubhouse will now look to open a network of Clubhouses across London and broaden its range of services by offering dedicated desks alongside our hot-desks. In addition The Clubhouse will shortly launch a mobile app, an enhanced member’s directory and improved online services to further facilitate collaboration and networking opportunities between members. We are looking to open a network of 8-10 Clubhouses across London over the next few years along with exploring opportunities in the major business hubs across Europe, the UAE and Asia, where we have already secured a local partner. (back to top)

 

Q. How will investors see a return? What are the exit plans?

A: We believe we have a scalable business model with attractive, recurring revenue streams which would be of interest to a private equity firm who could put the ‘rocket fuel’ under the business to grow it considerably over years to come. Alternatively, we are in many respects a ‘feeder business’ to a serviced office operator as some of our members will outgrow us over time and look to take some of their own permanent space (particularly if we fulfil our aim of making our members and their businesses more successful), so a trade sale opportunity is also a likely exit route. (back to top)

For further information, please visit SEEDRS or contact Adam Blaskey by emailing: adam@theclubhouselondon.com