Estates direct raised £500k on Crowdcube in 2014. Just in time for the SEIS allowances to be covered (3 years), the company has been sold to a newco backed by the Pels Family office.
B shareholders have been issued a final warning to accept this deal or be forced to by the Crowdcube drag along clause.
The newco have bought the equity in the company for £125k and taken on its debts. The company was valued by Crowdcube at £5m 3 years ago. You do the maths. Here's a clue - Crowdcube shareholders who invested £1000 will receive £7. So they will lose £993 if you ignore SEIS.
You have to ask the question. If Crowdcube are going to facilitate this kind of transaction, where the taxpayer is essentially helping investors make a return via this move (SEIS gives them a 50% rebate on their investment and no CGT on sale), how is this building sustainable SMEs for UK plc?
We were under the impression that the main reason for the Goverment's S/EIS scheme, was the creation of successful SME's. Apparently we were wrong.
We have written a few times about this outfit - here.