Wednesday, 15 July 2015
E-Car Club investors take a 3X return.
The word is that investors in E-Car Club received 3X, when the recent purchase of a majority stake was agreed with Europcar Lab.
This is of course speculation as the real figures have not been confirmed and it is as described by Crowdcube, a multiple return and their first. Very few investors will make any real money though - only 4 took A shares and invested £15k - so a tidy £30k will be a great return over 2 years. A few more invested over £5k and likewise this will see a healthy return but those at the bottom end, about half the of the 63 including both Westlake and Lang, will only make enough to buy a new gadget.
Based on this example of what Crowdcube can produce for investors how does the Crowdcube advice of spreading the risk amongst 10 investments work out. Clearly if you have one in three making this return you would be roughly BE. However this seems very unlikely. To date we believe that investors have lost more than £3m with Crowdcube punts, so this return of £300k is a drop in the ocean.
A question which is at present unanswered is just why the 63 Crowd investors agreed to sell their shares at the rumoured 3X? With the aid of Europcar, we feel pretty sure that the value of E-Car Club would be far greater than the deal's suggested £1.5m in a very short time. E-Car Club had struggled to get open in London and the South East - their stated aim and clearly the most lucrative market. You could claim they had lost focus with deals like the recent one in St Andrews - where the hub is a good 30 minute walk from anywhere, on university grounds that are empty of students for large parts of the year. In one move Europcar solves this problem and opens up the whole European market.
Institutional investors have always said that having large numbers of tiny investors would put put people off doing deals with crowdfunded businesses. Crowdcube have always claimed the opposite. Is this evidence that the former opinion is correct? Could the Crowd investors have been offered this deal or no deal ie take a good 3X return now or take pretty well nothing later as E-Car Club either closes and is reborn or just closes. Certainly B shareholders would have had little choice - especially as the company had a drag along clause in its articles which would have forced all B holders to follow the a holders decision.
We may know more in October when they file their latest A01.