Waterbabies appeared on Crowdcube in late 2013 to raise £1m for the launch of what was hailed as the next West End blockbuster. It was an impressive pitch, big names and lots of gung ho success stories. Even more impressive was the opening of the pitch with £800,000 of the £1m total raised in the first few days.
As usual Crowdcube had been playing games with its potential investors. When asked about the pitch and the £800,000, the founder of the company admitted that the £800,000 was not part of the pitch. It had been raised separately and earlier and no commission was due to Crowdcube for it. When asked whether he thought this was deceitful - to make it appear as money raised via the site - he declined to answer. The questions were then removed.
The pitch went on to complete its ''£1m'' raise and Crowdcube still have this 'success' as one of their largest.
Does it matter? Well yes it does. Firstly it proves that Crowdcube's main aim is to reach completions, no matter what. Secondly as a platform regulated by the FCA this sort of manipulation should not be allowed. The platform makes loud claims to be democratising investment. And finally the poeple who invested the other £200k may have thought that they were riding on the back of something very well supported - by the crowd. ECF has two main sorts investors, people who lead and can be bothered to do some due diligence and followers - the vast majority who just pick pitches that are being well supported and take a punt. As Crowdcube know, the easiest way to complete pitches is to have a rush of funds at its opening. This is not the only time they have pulled this trick.
The Musical launched in Leicester and drowned instantly with the loss of all hands - it was famously described by one critic as 'water torture'. Now in liquidation, the company has no assets and owes investors and creditors £1.2m. Good job Crowdcube.
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