Are Crowdcube hiding their own massive chasm?

Bottomless chasm are dangerous things. Before you can react they are upon you and its all too late.

Looking at Crowdcube's latest accounts, to YE Sept 14 and comparing these to the projections they used to sell their equity on their own site, one might be tempted to yell ''LOOK OUT!!''.

It is not so much the loss for the year of £1.35m but the fact that this loss is on a turnover of just over £1m. The company is in no immediate danger with investors piling in over £6m. The interesting bit is the fact that the company now (2014) runs administration costs at an annual £2m which by end 2015 may well be nearer £4m. Taking a 5% commission on successful pitches means that to 'turnover' enough money to cover costs of £4m would mean raising £80m pa - ignoring the listed direct costs of 30%. That's before the company makes a penny. In five years it has just managed to raise a total of £100m. Now the truth is beginning to hit home with investors - you aint ever going to make any money this way, investment will become increasing tight. So is £80m in one year really possible?

Quite apart from all of the above, what is so amusing here is that their very own projections - the ones used to enthuse all that investment, have turned out to be more inaccurate than any of the others used by the 1000 plus pitches that the platform has promoted. We are talking about stella differences here not a close miss.

What also might be of interest to those who have their faith in this outfit is that the notes to the accounts state that they have, under the Companies Act, not declared a P&L - but there it is on the very first page; a full P&L. What's more they go onto declare a profit of £1.35m in these notes not a loss - !! Management, what management?

If we were amongst their shareholders, we would be looking out for the first cracks before the big drop opens up.