Monday, 5 November 2018

91 active Crowdcube businesses filing accounts in the last 2 months show total losses for the 12 month period of over £47.5m.



Evidence does suggest that Crowdcube funded businesses dont do very well. All of these 91 and these exclude the 80 plus failures, were funded before the start of 2017. So they have had the money for 2 years.


This is not us trying to depress you - it is a fact. Of the 91, a handful have produced small profits  - in the low tens of thousands. Most have produced eye watering losses. All but one of the 91 have missed their projections by miles.

The one and only good news story is a company we have backed for a while - a London based restaurant that has not scaled. It remains a one unit business and it now makes an annual net profit of £500k. The Clove Club is a real business success. Why cant Crowdcube manage to get more of this type of success on board?

Of course there are a number of companies that are late or very late with their filings so there is still ahem........hope - ??

As we dont like others who choose to screw stats to make their point, we didnt include Monzo in this analysis. Their recently filed accounts for YE Feb18 showed losses of £30m. I'm pretty sure that had the analysis been 100% reversed and CC were PRinging it, they would have included this figure taking the total profit (in their fantasy world) to over £77m. They cant help themselves - but it really doesnt help anyone else.

7 comments:

  1. "As we dont like others who choose to screw stats to make their point, we didnt include Monzo in this analysis."

    Not sure how excluding a company that has used Crowdcube (Monzo) from your analysis isn't 'screwing stats'.

    I appreciate they are an outlier but the world of venture capital is an industry entirely based on outliers.

    ReplyDelete
  2. It is really pretty simple - to include the £30m loss for Monzo would have almost doubled the total loss for the 92 companies of £47.5m - thereby moving the mean in a totally unrealistic way. I dont think that's hard to fathom? And of course we told you we were doing it.

    ReplyDelete
  3. Hi Rob, I'm grateful for the work you do, and would like to thank you.

    Please don't take this the wrong way, but Im curious what it is about crowdcube in particular that you disapprove of so much?

    They have several failures, but startups are risky business and such failure rates are the norm, no? Relative to other platforms, their failure rates hold up fairly well (altfi "where are they now report" 2016).

    They are poorer than competitors at keeping shareholders informed but they seem to be making strides for improvement in this area, having recently acquired "supdate" - the business update platform.

    Maybe They list some shoddy companies, but they do boast 3 unicorns - something no other platform can boast - and that must reflect their deal flow.
    They are the market leader too, so the crowd clearly has confidence in them.

    I mean no offence, but I would love a healthy debate on your opinion of crowdcube.

    ReplyDelete
    Replies
    1. Of course no offence taken. It is just my opinion - based on the fact we present here. You can read about the latest farce with Emoov - valued at £100m on CC 60 days ago. Altfi are paid by Crowdcube, as are Beauhurst so you need to be aware of that. Failures are not the issue - Zombies and Trundlers are. Read the blog it is all there. And finally you are wrong about your unicorns - Revolut moved to Seedrs for their large raise. You see how easy it is to fall into the CC PRing trap. SNAP........ - they have you. Thanks for reading.

      Delete
    2. Crowdcube boast 3 x billion dollar companies (unicorns)? Define 'boast' please.

      Crowdcube are beyond awful.

      1. The bad (badly intentioned too) apples are welcomed with open arms.

      2. The promising, hungry entrepreneur/founder is often turned by the platform or, at best, mislead by Crowdcube with terminal consequences.

      Encouraging ridiculous valuations, pie in the sky projections, maintaining an environment that clearly allows artistic license with historicals. Yuck.

      You can cheat. You can cheat. You can fkn cheat.

      Accepting a high failure rate in this sector is one thing if the propositions are based on facts. We had assumed this was the case. Disgusted at what we have since discovered.

      We took the platform in good faith and this will likely end up being a very poor move. Lesson learned.

      Delete
    3. Revolut, brewdog and monzo? as Rob pointed out, revolut raised on seedrs but this doesn't disprove that revolut raised on CC prior.

      Im not sure what you mean by bad apples? I don't think failures constitute bad apples - that's just how risky private equity is. I'd be surprised if their weren't this many failures.

      I think valuations, projections, etc are for the crowd to judge. We may disagree on this, but I feel the crowd should decide whether a pitch constitutes a decent investment (there is no obligation.. , if a valuation is too high, no one will invest in your company) but CC need only make sure the company is legitimate.

      Don't get me wrong, I do have some criticisms CC. I Seedrs are undoubtedly stronger with investor protections. I just would like validation as to why so many have such a low opinion of them. I think CCs main weaknesses are poor shareholder updates (which is poised to improve) , but more importantly, their weak due diligence process.

      however, CC have attracted some very strong companies. My reasoning is that I'll look past CCs weaknesses if it will grant me access to the impressive deal flow that crowdcube continues to have.

      Delete
    4. Its a free world. When you have some evidence that Crowdcube produce ROI do let us know. All the evidence points to the fact that the crowd has not got a clue about what is or is not a good business. Why would they have? In 8 years what have Crowdcube to show? A few small exits most of which were exits dictated by a cash crisis (Ecar Club and Camden). Compared to large, glaringly disastrous, collapses - FRont Up, Sugru, Square Pie, Enclothed, Cake, Mr Sherricks, Waterbabies, Emoov, Sustainable Power, My Showcase, Ovivo, GF Foods, Ethos Global, Field Candy, Psonar, Lick, Yorkshire Meatball Co, Affresol, Togethera, Movem, Pizza Rossa, Astar Pets, Crumpet, Early Bird, Rebus, Quantock Brewery, Solar cloth co, Wool and the Gang .................... we could go on and on and on. We havent even mentioned the zombies and trundlers. Your faith in their ability to choose decent businesses to present to punters is touching but it is not backed by any evidence.

      Delete