Tuesday, 27 June 2017

When is an investment on Crowdcube not really a Crowdcube investment?


This is a very obtuse line.


Wit Fitness have what looks like a normal campaign that has got off to a flying start on Crowdcube.

£370k already invested.

But in the pitch, it states that £320k was already raised and of that £125k will be drawn down before the pitch completes - so whether it is successful or not. IE it has nout to do with Crowdcube's platfrom or this raise. We dont know if CC are taking commission on it but we'd guess it will enter their annual raise figure.

So what the fudge is it doing on here?

Is this how Crowdcube propose to make investment more open and more democratic? Seems unlikely. 

Wit are not raising £840k, as Crowdcube state - they are at a pinch raising £840k, minus the £125k they have already signed off for and will be spending even if this raise fails, by their own admission. So why not just be grownup about it and say they are raising £715k on Crowdcube? 

Well the maths show that if you remove the £320k already raised then the all important percentage completed graphic looks a lot less impressive. It's not like we havent seen this before a few times.

5 comments:

  1. Well, at least they disclose this now... a step in the right direction.

    When you think about, SR does this with every pitch. I even remember a pitch earlier this year when they included money in their progress bar that was raised (and spent) 12 months (!) ago... they argued it was still the same round (as approved by the same resolution and same valuation). Absolutely ridiculous!

    ReplyDelete
    Replies
    1. Goncalo de Vasconcelos28 June 2017 at 00:44

      Hi,

      The key unique point about SyndicateRoom is that online investors are investing alongside professional investors. We couldn't be more transparent than that - it's our USP and we have a tab on each pitch that discloses exactly how much the lead investor or investors are investing and who they are. The lead investors having committed capital to the round are exactly why SR members have access to the same valuation and class of shares as the lead investor.

      At the founder of SyndicateRoom I am proud of pioneering the investor-led model, leading fairness and transparency in online investment and how we disclose the existence of such lead investors. I would find it very hard to believe that anybody believes we try to hide the fact that every single round has a lead investor considering how much we shout about it as it being our key differentiation.

      The round that anonymous is referring to was a very large soft round that due to the amount it was split into two separate years as a result of the 5 million Euros threshold. This was entirely disclosed on the pitch. Again, it's all down to being transparent.

      Thanks, keep the good work and have fun,
      Goncalo
      Co-founder of SyndicateRoom

      Delete
  2. Does anybody want my entire Crowdcube portfolio for free ?? So I can delete and unsubscribe.
    Let me know.

    ReplyDelete
    Replies
    1. Yup I'll take it off your hands - no charge!

      Delete
  3. Hi Anonymous,
    SyndicateRoom pioneered the investor-led model whereby online investors invest alongside business angels, venture capitalists and other experienced investors. It is therefore very hard to argue that SyndicateRoom doesn’t disclose that part of the round is already funded by lead investors when it is an absolutely essential part of SyndicateRoom’s model and both the lead investors and their respective investments are fully disclosed. This is how SyndicateRoom members get access to the same valuation and same class of shares as the lead investors.
    One of the things that really sets SyndicateRoom apart is the level of transparency and fairness and what we stand for. This is the basis of the entire vision behind SyndicateRoom and it’s why Tom and I started the business back in 2013. The funding round you are referring to was part of a much larger funding round that was split into different years due to the total amount being raised being very large and this was entirely disclosed on the pitch.
    Any online investor should do their homework by starting to look at each platform portfolio, how they have performed so far and read through this blog. Then the choice of platform becomes pretty obvious to any wise investor. I may be biased but the facts around SyndicateRoom’s portfolio show a clear and very compelling story.
    Have a lovely day,
    Goncalo de Vasconcelos
    CEO and co-founder of SyndicateRoom

    ReplyDelete