Seedrs Transfer Guru closes down and reveals the truth behind many equity crowdfunding businesses - the lack of any planning or research and easy money.
Transfer Guru wont break the bank - they raised just £82k. Mind you 100 £82ks suddenly starts to add up.
In their end of life letter sent to Seedrs SHs they reveal a startling fact -
In short, after the round of investment on Seedrs, TransferGuru soon came to the conclusion that the consumer market was not able to offer the repetitive revenue required to grow the business. We made the decision to pivot into the business space. This is where we managed to prove some demand, but over the last two years, were unable to scale this with the limited funds available to us at that stage, and unable to raise further funds without being able to prove the scalability of our operations. Meanwhile, at a macro level, the new introduction of services such as Transferwise and Revolut for business provided additional pressure on TransferGuru's use case.
Well the first line says it all. Get the money in and then try to decide if the idea works. That is not how this is supposed to work - You were only supposed to blow the bloody doors off.
We need entrepreneurs to underdstand that having an idea and getting funding to play with it is not really what ECF is about. You are supposed to use your own F&F money to get to that stage. This cash is far too easily accessed and is being far too readily wasted. Why would Seedrs allow this? Ah yes a thing called commission. Someone has to pay the bills.
Lessons learnt? Well alomost certainly none. Roll up Roll up.