Tuesday, 13 June 2017

More Alternative facts for Equity Crowdfunding

Borrow My Doggy was reported as having raised £1.5m at the end of 2015. Many of the usual publications picked up the story and issued it as fact. It wasnt.

Reports range from City AM, The Sun, Yahoo Finance and numerous online ECf publications and this release which suggests very strongly that the money was 'raised' - http://www.prnewswire.co.uk/news-releases/uks-first-live-crowdfunding-summit---crowdfinders-live---today-announces-19m-funding-goal-reached-after-four-hours-of-sme-pitches-534962631.html

We were contacted by a shareholder in BMD recently to see if we could find out what happened. The £1.5m was reported as raised by IW Capital through one of their live events - 'Crowdfinders - Make your Business Rock!' - ahem. So successful was this raise that BMD cancelled a scheduled Crowdcube raise. This shareholder told us that several investors were puzzled by the outcome. The news reports were very clear - yes the full £1.5m had been raised at the event.

The Crowdfinders website carries the Yahoo piece and the City AM piece links but they have been disabled. The City AM headline as shown on the Crowdfinders site states -  

''BorrowMyDoggy fetched £1.5 million at Crowdfinders Live. City A.M.''. We would read fetched as raised?

So we spoke to IW's main honcho Luke Davis - a man closely associated with our favourite lady, Ms Horlick. He started by saying that he couldnt understand what all the fuss was about and was this a story being put about by a well known pundit; whom he had just expelled from IW. The story has no connection to the gentleman 'named'. Luke went on to explain that at the event, money is only pledged and that as far as he knew, they had eventually tied up around £1.25m but certainly not £1.5m as reported; although he couldnt be sure of the exact amount. In the reporting, IW is never quoted as saying they had raised £1.5m or any sum. The reports seem to get this figure from an unknown source and they never bothered to check it.

One of the shareholders has said that they believe the amount raised was only just over £1m.

Does it really matter? Well it matters that reports in credible publications can be so far from reality and it matters that companies have made claims that are not true. But then this is equity crowdfunding and the pond is teeming with sharks.

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