Equity Crowdfunding needs a more holistic approach and Syndicate Room shows how this can be done. Crowdcube - time to wake up.
We received an email a couple of days ago from the Founder of SR - Goncalo. He said in it that one of the companies funded via the platform, Opun, had been sold to John Lewis but that this meant a loss for shareholders. The common cause was a lack of cash and inability to raise more. We are not commenting here on the way the company was run or the debts it built up.
The email ends 'Personally, I’d love it if we could all be open about the realities of startup investing. It’s essential for the survival of this industry.' We would agree.
This email was sent out to all SR clients not just Opun's investors. It shows a real attempt to clean up what is fast becoming a swamp. King of the Swamp is without doubt Crowdcube.
When Crowdcube businesses go bust or are sold at a value less than investors had paid, Crowdcube are generally nowhere to be seen. A PR is issued and quietly slipped under a few doors, stating that these kind of investments are high risk and it's not their fault. Investors receive no communication. Crowdcube offer no help. You are on your own, sucker.
Which way do you prefer?