Monday, 20 March 2017
Red Squirrel Group have gone nuts - literally and this time its not on Crowdcube
Red Squirrel Group raised £651k on Crowdcube at a valuation of £5m in 2015. Now they appear to be back as Mad Squirrel at a valuation of £9m on a shambolic platform called Right Crowd. How this platform is allowed to operate even within proximity to an FCA license is beyond us. The forum Q's suggest this will be a massive flop.
You can have a good laugh here - https://therightcrowd.com/.
This is exactly why equity crowdfuding will go down the tubes. Red Squirrel ran a very odd Crowdcube campaign, with the line between their two operating companies and the Holding Co almost impossible to understand. Recent accounts have the holding co making a £7k loss but the two subs have made a total of £160k loss for the year. On Crowdcube, they predicted a profit...of course.
Talk of dividends for 2017 look like the usual Crowdcube fantasy.
On Right Crowd, there is no business plan, no mention of types of shares and in fact nothing about what shares are on sale in what company as Mad Squirrel is just branding. To join RM all you have to do is give some vague(in our case spurious) details and you are in. This is wholly contrary to the FCA guidelines.
It is truly farcical. Asked on the forum why they have chosen this atrocious platform for their second raise, they say that Right Move is better for fast a growing business like theirs. Firstly there is little evidence they are growing at all and secondly Right Crowd looks to us more like a scam than a serious platform. These guys have under 500 Twitter followers and only 3 live pitches - all rubbish. We would agree with their strap line though - 'Crowdfunding with a twist'.
When asked on the RC forum about the dilution for existing CC shareholders, the reply is that by increasing the shares the value of the company has increased. We all know that is nonsense and even more so in this case.
Oh and if you are interested, the Mad (that's you if you are) Squirrel or whatever they are called, campaign on this platform has been a complete flop with only £80k of the desired £1m pledged. We'd imagine the £80k is from the company founders.