Why we need a regular format for information shown on ECf pithces

There is a current pitch on Crowdcube which is an excellent illustration of why we need some regulated format for the information ECf platforms publish.

In this pitch the financials have been presented in such a way as to heighten the net profit. This is done firstly by claiming the previous 12 months accounts were for the Group and that any amortisation or depreciation is taken into account at company level. Then for the projections, the company have used some accounting scheme which is not explained but appears to limit the depreciation to tiny a percentage of what is a large capex . It refuses to give any details of this accounting system because it claims it is commercially sensitive.

So the net result is, or more accurately could be, that the profits for this company as published in the Crowdcube projections, have been materially over stated. We have no way of telling. Crowdcube clearly didnt bother to check these things before the pitch went live. In fact its more likely that Crowdcube wouldnt spot these discrepancies anyway  - they never have before.

No one here is breaking any laws; the whole area is a minefield. That's why it needs addressing

By filing all financial projections with an independent third party, sponsored by the government, and setting out some basic rules for how accounts are to be laid out, all of this could be avoided. If pitches didnt like the formatting, then its a good guess that what they are offering is not what it appears be.

In this way investors would have a much better chance of seeing a ROI and therefore ECf would have much better chance of a sustainable future.