We are puzzled. More often than not you will find companies pitching for ECF will produce projections for 3 years that are not the same YE as their accounts.
In these projections, they include a previous 12 month period, which as its not aligned to the filed accounts, is impossible to verify. Surely it would be more open and simpler to get the two aligned - unless of course this is being done on purpose to prevent comparison.
A quick example and we have a lot - Beerbuds funded through Crowdcube. Their official YE is 31/05 but the projections run Jan to Dec. So their first set of filed accounts showed a small profit of £1500 but the past 12 months projections have different figures. The latest filed accounts show a £5,000 profit but the projections used to sell their equity show a much larger figure with a healthy balance sheet - the filed accounts show a very weak bottom line with large outstanding creditors well in excess of the cash raised.
To make sense of this, you have to try to guess what happened in between May and December each year, which is impossible. So in essence it is not possible at this stage to say if they are or are not on target. One suspects they are not, only becsue this is the trend but we will have to wait for the May 2015 accounts to see.
By elongating the the time frame in this way, Crowdcube gain more time before people are able to assess if investing in this type of company is going to produce any ROI. Its not exactly as open as they like to make out.
A simple solution would be for SEIS and EIS rules to stipulate that the raising of money via these platforms required the alignment of financials and the filed accounts.
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