Saturday, 1 July 2017

Crowdcube change their system to protect bad business plans



Lets face it - Crowdcube cant do numbers. Or rather what they do with numbers is interesting. Now they have changed the way businesses pitch on their platform so they no longer have to produce a 3 year basic projection. Now they are trying to hide these numbers under the carpet.


Why?

Well very simply because they hope this will stop us having this information to compare with the company's real results a year or two later. You remember our ongoing research into 400 CC companies has revealed that 95% have to date missed these numbers by quite a margin.

You would have to say that this is pathetic.

Instead of sorting out their own very obvious problems, they attempt to block legitimate criticism by hiding the real figures.

Well boys it wont work. We get most of our information from people who have downloaded the full business plans, which do include projections. We also have other ways of finding things out - what you might call an inside track.

It is yet another illustration of all that is wrong with this company. The sensible option would have been to sort out the numbers, not paint over  them. Open and transparent they certainly are not and the bad news pipe work in the sewer below their offices is at bursting point.

6 comments:

  1. Hi Rob,

    I have been reading through your blogs with interest as I have made various investments into startups via Seedrs (and one via CrowdCube).

    Obviously your blog is very critical of the industry. However, from what I can tell, you routinely seem to make criticisms of specific businesses or practices, and I am struggling to understand your view of the big picture.

    Would you mind giving me an overview of how you feel about the space generally? Do you think it is all one big scam? Or do you simply think the industry needs to be held to a higher standard?

    ReplyDelete
  2. Thanks for the Q.

    1. We are generally very critical of CC in this area - because in what should be a
    long term play they have chosen to cut out the middle and go for volume over substance. In so doing they often breach the line of what is acceptable practice. This is generally not illegal and involves not giving information that would limit a pitches appeal rather than outright lies. This will have to stop. It hasnt, despite what CC now claim - we are currently writing about a live CC pitch where the information is nothing if not misleading.

    2. Seedrs have been tempted to follow in a grab for market share. Their ridiculous annual report on how much uplift value SHs have seen, when the shares have no market, is a clear example. However their DD is generally better as are (IMO) their pitches.

    3. No its not all a scam but under current conditions I dont see anyone making any money out of it. Things need tightening up, the whole accounting and reporting system needs to be brought into the 21st C and then we might have a chance. We have a very large backlog of companies that have funded on CC that are either late filing, have missed their projections by miles and or failed to raise promised future funding. They will eventually all go or just trot along making a salary for founders. That is not what ECF is supposed to achieve.

    4. I have many opinions on what could be done to try to correct this but not ones Im going to share here. Like all problems, it is addressable but you have to admit there is a problem first, which the chaps at CC and sometimes at Seedrs are unwilling to do.

    Get in touch if you want to discuss more rob@ecfsolutions.co.uk

    ReplyDelete
    Replies
    1. PS - the blog reports facts only so if these are critical of the sector then there is something wrong with the sector.

      Delete
  3. Have you ever investigated the rewards system ? Having invested in a handful of CC pitches I've not received what's been promised. Not once

    ReplyDelete
    Replies
    1. Im interested to hear this. Get in touch on rob@ecfsolutions.co.uk if you can give more information, anon of course. I cant write it unless I have verified facts. Thanks.

      Delete
    2. I can't say I share your experience. I've invested in one thing on CrowdCube and received my promised reward.

      Delete