Wednesday, 9 September 2015
Crowdcube PR hides the truth
Scanning the internet for stories on E-Car Club's sale to Europcar we came across this piece in City AM - http://www.cityam.com/222021/ignore-snobs-why-crowdfunding-bringing-diversity-back-business
Reading it, it began to feel like it was written with a slightly one sided view. Guess what, it was. The author works for a major Crowdcube backer and although the piece acknowledges this, it is still just a piece of very obvious and not very intelligent PR.
Quite apart from anything else, the sale of a major stake in their company by the directors of E-Car Club to Europcar was not all that Crowdcube have made it out to be. The 65 Crowdcube investors - most of them B shareholders - were forced to sell their stakes in line with Crowdcube's standard drag along clause. E-Car Club had up to now made almost £500k of losses and had failed to gain a foothold in its target South East market. In desperation it had started opening bizarre hubs in the north like the one on the outskirts of rural St Andrews, Scotland.
Why would shareholders sell their holdings when Europcar had given the company instant access to pan European hubs - something it would never have achieved flying solo. The company will now go on to make its founders rich, whilst shareholders can only imagine the returns they might have made.
The article of course ignores the many total failures that Crowdcube have helped promote, the loss of all the investment and the large numbers of creditors hung out to dry. Still he has to look after his company's interests and wouldnt want the truth to get in the way.