Tuesday, 31 May 2016

Crowdcube were recommending Solar Cloth at the same time the company was going bust!!

We found this on the Crowdcube blog dated January 2016. (see below)

So this was after the CEO of Solar Cloth had jumped ship. Do Crowdcube take any interest in the companies they fund or the advice they give? For those of you who dont know, Solar Cloth has gone bust taking with it almost £1m of Crowdcube investors 'diversified' investment. A truly 'great start' from the Crowdcube out to lunch department............................
When diversifying a portfolio some investors may prefer to keep their investments to specific industries, technology for example and create their portfolio by investing in different stage companies within this sector. For example, an investor could have invested in:
Mindflood – a start-up tech company offering 12% for £100,000
Cell Guidance Systems – an early stage tech company offering 5% equity in return for £100,000 back in 2013
The Solar Cloth Company – a growth tech company offering 10% for £750,000.
These range of investments would be a great start to a diversified portfolio.
The picture shows a Crowdcube promo. All but ineed no longer exist!


  1. Well, in a times interview in TSCC May 24th 2016, the founder of CC did say that

    “It is important that this is viewed in context: [up to] 70 per cent of early stage businesses fail, according to the Financial Conduct Authority. Our investors are aware of this risk and it is worth highlighting in this instance that 72 per cent of the investment in the company came from experienced investors who had self-certified as sophisticated or high- net-worth investors.”

    So perhaps they are just getting their 72% in early.

    Personally what concerns me more is that CC's own definition of due diligence states

    ...that any factual claims made by businesses seeking to raise funds through our platform are independently verified.

    Certainly for TSCC and possibly other cases there seem to be a number of statements made on historic values of revenue / profitability / assets that should be classed as factual claims that turn out to be not quite factual.

  2. If only CC had listened to warnings (before the funding was completed) about the claims TSCC were making then the funding round would have been stopped and the shareholders wouldn't have lost their money. If i were the guy who put in the £500k I would be gathering evidence!