Friday, 19 August 2016

Beauhurst Crowdfundig reports skates around real issues

The new Beauhurst report here on the decline in investment into the UK start up scene in H1 2016, is worth a read for anyone interested in the sector.

By their own admission, the key reason they give for this decline is guesswork. The uncertainty around Brexit, they say, is the prime driver.

They make absolutely no mention of the lack of ROI for Crowdfunding investors, despite highlighting the fact that this financing channel is the dominant one. Surely some consideration has to be given to investor fatigue. Back in 2011, 12 and 13, this was all good fun and early adopters poured in. However the total lack of credible business plans produced in those three years by the largest player, Crowdcube, has led to nothing but utter and total disappointment. Its one thing to tell people that investing in start ups is unlikely to give you a return but if the next sentence mentions Facebook and Dragon's Den, the original warning is lost.

Just look at the facts. Up until the result of the Brexit vote, everyone expected a win for Remain. So on the 23 June, we all got a massive shock. But H1 ends in June so the figures only include 7 days out a possible 180 in the half, when the result could have had a real influence. Looking through the report the deal numbers are holding up well for the first 4 months of H1. Isnt it far more likely that the series of failures and scandals that have marked HI have dented investor confidence? Certainly investors we talk to think so. H2 will show if Brexit is having an effect or not.

Why we ask is this not even considered?

4 comments:

  1. The tagline of this site is "How you can use it to make money for your business", and yet all the posts seem of be either dissing Crowdcube or the firms on there. Do you actually have any ideas on how to do this successfully?

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  2. Hi - yes we do but you have to go to our website http://ecfsolutions.co.uk/. This blog is a light hearted look at the problems equity crowdfunding faces - most due to its own incompetence. No one has to read it but many seem to. We do also post positive news when it comes - which is not very often from a ROI perspective - yet. You clearly have not spent very long on the site or you dont know much about equity crowdfunding, as there are plenty of helpful posts and posts that are not about Crowdcube. Although as the self proclaimed Kings and Queens of ECF, they get their fair share of criticism. If responding use a name or it will not get published.

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    1. PS - the tag line is tongue in cheek - sorry we should explain that more clearly for those with a slow tendency.

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  3. I would be interested in the following figures for each crowdfunder:
    1. Money made
    2.Money Lost
    3. Not sure yet

    I would imagine for Crowdcube, the catastrope's are catestrophic and the wins are marginal and that is in boom years...but I might have it wrong

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