In a recent radio interview with Share Radio - due to be broadcast this Monday at 4pm, we were asked about the herd mentality in Equity Crowdfunding. It was clear that its existence was doubted. So just in time, we have a classic example of it at work on Crowdcube.
Floom's campaign was to raise £390k. It came to end of its alloted time short by around £40k. As is usual with a pitch that close to line, it was given an extended time frame to complete - otherwise Crowdcube dont get their commission. All fine.
It did get over the line. It's what happened next that is interesting. All of sudden within a couple of days, a pitch that couldnt get together a few thousand to complete in its last few weeks, was inundated with investment and is now - just days after the original deadline, overfunding by £65k and climbing. It has remained consistently on top of the pile of 'recent investments' since completion.
The business hasnt changed, the model hasnt changed and the valuation hasnt changed. It's great to know that the herd is alive and well.
You see this a lot on Crowdcube pitches (Uspaah and Pedals are Two recent examples), the pitch is way short with a day to go then suddenly a huge chunk of magic money falls from the sky at the last minute. You'd almost think Crowdcube fiddle the numbers to get them over the line so they can grab their commission but they'd never do that of course. Great blog by the way trying to counterbalance all the ECF lies and spin that's out there
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