We reported earlier that Crowdcube funded Hug & Co had failed to file accounts or returns. Now we know why; they are closing. This was one mess they couldnt change out of.
So this is yet another Crowdcube success, yet more taxpayers' money poured down the drain and yet another reason why this waste should be stopped... now
Of course it is ok for grown ups to throw away their money if they wish, we believe in caveat emptor. But this whole equity crowdfunding scam is being fueled by the SEIS and EIS schemes - giving investors instant 50% and 30% refunds respetively. This is not free money - it comes out of the Exchequer. It is our tax money that is being so stupidly wasted.
Why is it that only CC, BankoftheFuture (or whatever the hell it's called), and Angel's Den only come under your radar?
ReplyDeleteWhile I can't recall you mentioning City One Securities, CrowdBnk, Sydicate Rooms, or Seedrs.
Simply because they are the ones I follow. Feel free to check out the others yourself. Seedrs and SR have a different system and its much more time consuming to get the full details of their pitches. I actually think that the piggy back on VCs method maybe the answer.
DeleteI see. thanks. I believe CrowdBnk take equity in all the pitches they punt. If their taking a large stake and are run by people who know what they are doing then I think that model could work - I'll have to look into it.
DeleteYou are contradicting yourself, on the one hand you say it's your (our) tax money, on the other hand you call it (correctly) refund.
DeleteNot a single penny of your tax goes into these schemes! It is still the investor's tax, it's just that he needs to pay a little bit less for supporting British start-ups.
You misunderstand the point. If the money used by the Exchequer to support UK businesses through SEIS and EIS produced long term jobs and Uk prosperity, then the scheme would be fantastic. Fewer people on the dole and more wealth both help the Exchequer. However if most of the businesses supported this way go bust or just limp along, as the evidence suggests, then the money thown at this scheme is wasted - no new jobs no more prosperity and in fact the costs of closing businesses to Creditors is much larger than the sum lost - more often than not HMRC are a large creditor in these failures.
DeleteSo although the money is not technically HMRCs (as it is never paid in tax) the loss in revenues of approx £30m to date must be a concern - if it is not producing sustainable, profitable businesses. That loss will have to be either found from elsewhere or services cut. Clearly the Exchequer work on a budget and have no control on the levels of SEIS and EIS accessed through platforms like Crowdcube. Take away or better still control the access to these kickbacks and the pltafroms would be forced to vet their pitches and we all be winners.
Im sure we all want the same thing - better businesses in the UK, with more employment and more wealth. The gambling going on with such very poor odds on Crowdcube is certainly no way to achieve this