2015 was the year Crowdcube broke through the £100m invested barrier and the year they finally saw a funded company sold. Two in fact. Despite the returns being small, they are at least returns.
We said goodbye to quite a few Crowdcube funded businesses also in 2015. Most of the ones liquidated over the previous 3 years are also still in the process of closing. Losses for ECf have mounted and are now heading for the £20m mark.
The FCA continues to be AWoL and there seems little hope of them coming to the party in 2016. What exactly is it they are supposed to do? Answers on a postage stamp please.
Many companies labelled successes when they raised ECf continued to show spectacular form when it comes to missing projections.
Our award for the worst performing success story for 2015 has to go to Pizza Rossa - the self styled square pizza mafia. Two raises on Crowdcube and voted best business idea by the LBS and Crowdcube, this succail has broken all records when it comes to missing targets. We expect more of the same in 2016.
Worst performance by a ECf funded company is shared between Flavourly, whose reviews on Trust Pilot are a very amusing read, JustPark for likewise and Soshi Games who recently liquidated and seem to have lost their lead investor along the way. Some error with the AR apparently.
Quote of year as usual goes to Luke Lang, PRing director for Crowdcube, who told Altfi that of course Easyproperty investors would enjoy a considerable uplift in value despite dilution, after Stelio's namesake company raised a further £25m without entertaining Crowdcube investors. No figures then Luke - as usual!
Biggest fudge of the year - Camden Brewery sale with reported returns for ECf shareholders of 70%. Now looking a little dodgy that percentage.
Most resilient performance goes to Red Advertising, who having failed to raise yet more money on Crowdcube, have been successful in raising over £200k as a loan on Thincats. Of course the Thincats pitch didnt give details of the Crowdcube dealings.
Our quotes of the year - take your pick -
'Your blog should be essential reading for anyone interested in ECf' - an investor
'I wish the FCA would pay more attention to your writings' - an ECf platform - not Crowdcube!
'I love your blog. I discovered it today and couldn't stop until I had read every post. Truly insightful.' - a possible stalker.
Tip - keep your eyes open for a broadsheet article coming out shortly on a truly unbelievable phoenix event.
I very much enjoy reading the blog. Whilst I don't often agree with the tone, you can't argue with the facts.
ReplyDeleteSo to all Ecf'ers out there - Caveat emptor and Happy New Year!
Thanks Paul - appreciate the sentiments. My NY resolution is to try to look at ECf in a more positive light!! Happy NY.
DeleteI hope another NY resolution is to make this site more visible.
ReplyDeleteThe more I think about ECF, the more concerned (?) I become.
- Information asymmetry on entry
#1- the management have control over the pricing of the ECF campaign.
#2- the management have control over the timing of the ECF campaign.
#3- the 'broker' (seedrs / crowdcube / sr / ...) make money from a successful fundraise
#4- the 'broker' controls the information the PI sees - this is not regulated (we opt out)
#5- libel laws do not stop you saying 'Fund raise X looks rather good', but put rather a brake on saying 'Fund raise X looks rather wrong'
- Lack of visibility on progress (or not)
#1 most small investors hold 'B' shares that have fewer rights
#2 there seems little other than good character to stop the managers / Class A shareholders hollowing out the company from the inside
- I have never experienced a sale.
Thanks for the comment - we are slowly gaining traction. This blog was started because every time I expressed these views on Crowdcube I was banned from the site. Joined at least 50 times now and dont make comments there anymore! Hopefully 2016 will see some more serious players enter the market.
DeleteGood post. Thank you.
ReplyDelete