Tuesday, 13 June 2017

Crowdcube finally admit that their Due Diligence is pitiful.


So at last we have it in writing. Crowdcube have admitted that one of their now failed companies was poorly scrutinised by the platform and they missed a crucial piece of information off the campaign. A piece that would most likely have made investors think at least twice before jumping in. They, as usual, have now last all their money.


According to Crowdcube, they have now corrected the error in their systems and this couldnt happen again. Which is an interesting comment - because it has. A whole year after this company raised its first CC round, the Solar Cloth Company raised £1m. We now know that the information supplied on the platform about the SCC was missing crucial elements - like the CEO's bankruptcy and failed businesses. It is a similar story here - no lies just massive, glaring chasms in the information supplied. The result of a totally amateurish approach. This is the information asymmetry we have been banging on about for years. 

So we have made some progress - Luke Lang never normally admits to anything and to be fair he didnt admit to this - his PRinger did. But it comes to the same thing.

But Crowdcube are still living in the Land of Nod if they think their DD is fit for purpose. We have the evidence that proves otherwise. 


2 comments:

  1. Has cc reached the point where lack of DD amounts to mis-selling in your opinion?

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  2. IMO they reached that a long time ago. But until the FCA decide to do something CC can get away with pretty well anything. Brexit has made it worse as it looks likely (certain) that the EIF will withdraw from the UK altogether - they have already put a stop to new applications. This means that ECf becomes such an important source of funds for the new tech hubs - who is going to pull the plug and see it all go to Berlin?? Unless of course we get much softer Brexit.

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