Affresol Ltd has just filed accounts to YE May 2014. Affresol raised £135,000 on Crowdcube in Summer of 2013.
The company projected it would be well into profit by May 2014. Accounts just filed show a loss of £460,000 for the year to May 2014 and a total accumulated loss of just shy of £1.5m. This figure is almost double the company's estimate.
The company currently has its own ECF pitch on its website, raising some £400,000. So were the other shareholders asked about their dilution, as this new share issue certainly wasnt mentioned back in the Summer of 2013.
It strikes us that you simply cannot build a sustainable business using plans designed to sell the company's equity. These are sales presentations not business plans. Affresol is just one example out of many we have on file, of a company encouraged to over estimate its sales in order to complete its pitch. Surely at some stage the crowd will realise this and stop investing?
This would be shame in our opinion - ECF could be a very valuable life line for SMEs. Just not the way the current model is run.