Crowdbnk have rewritten the rules for Equity Crowdfunding - making it into a comedy.
Crowdbnk have decided to pull out of ECF - concentrating instead on P2P lending. That is fine, but as its parting shot it has made a total mockery of the sector.
We have written several posts on The New Cratfsmen - how they failed to raise a second tranche on Crowdcube then appeared on Crowdbnk to raise the same £1m - without telling anyone about the failure. Then they cut this figure to £750k as they had had no interest. The same 14 investors who put in £565k at the start, were the only ones to invest - yet the pitch remained on the site for months. No new investors.
So what do you do with a flop like this as a platform? Simple solution - you move the target.
So guess what - now the platform can show the same 14 investors and the same £565k as a SUCCESS. The target they were looking for was only £500k all along - or half the original target. No mention of this slight of hand anywhere on the site of course.
This has clearly been assessed by the FCA as a viable way for the UK to run its ECf platforms. So we need never see another pitch fail. You raise whatever you feel like or whatever people are willing to give you. So there is now no point in any business plan with projections, or any valuations, In fact there is not point full stop. Its just a massive free for all.
Haven't we been here before??