We are launching ECF.Buzz - a one stop goldmine for all things ECF for both investors and companies.

ECF Solutions is launching a new site - ECF.Buzz - A subscription site, including this blog with free access, where investors and companies can read and download guides to and reports on all things ECF. Plus a forum so you can a have a safe and sensible place to discuss experiences, ideas and find what did happen to that investment!

Knowledge is Power - we have the knowledge, you need the power.

Fantasy Equity Crowdfunding (FECf) will have an annual subscription, a one off fee option for guides and reports, a separate forum subscription option and a one day, read only, use of the forum facility. We believe we are uniquely positioned as an independent source of relevant information in the sector. We intend to offer that information to subscribers. Since 2011, when ECf was created in the UK by Crowdcube, we have been writing about it. We have been correct in pretty well all of our assumptions to date. We know our advice is pertinent, as current downloads and feedback on our DD guide and our advice to hopeful ECf companies, both show this. 

Guides (~40 in total, updated and regularly added to) will use real data collected over the past 35 years and will include  - 

• The Art of Due Diligence
• Investing via ECF - what you need to know 
• How to make sense of small company balance sheets
• Reading what's really happening in a projection sheet
• Analysing a Business Plan and Pitch Deck
• Spotting a winning team
• SEIS/EIS guide
• Best practice for creating a successful ECF campaign
• Telling the difference between fact and fiction.
• Using SM to find out the facts.
• Avoiding Overtrading

Annual reports using our data set will include

• ECF platform analysis - independent!
• Sector analysis 
• ROI and analysis by sector, exit method etc
• ECF Europe and ROW - developments and opportunities
• The Regulation Landscape - what to look out for.

There will also be an information centre which take all of the data we have currently on companies that have raised, failed to raise, the people involved and the outcomes and allow you to search for what you are looking for. Additionally there will be a resource library with links to hundreds of useful resources and reviews of some of them. This may take a little time to get up and running as it will be manual for us to start off with. This will link into a purely fact driven information centre on live pitches - again allowing investors a level of information that they could not hope for without our service.

We would like to know if you have ideas that should be included. If we havent already thought of them then we will offer you free membership for a year if we use them. Dont post them here but instead send them direct to me at rob@ecfsolutions.co.uk. We are also keen to talk to potential partners who may have something to offer to this project. So please do get in touch.

We hope that with traction this will develop into a site that will be able to run an annual get together for networking etc. A community of SMEs and investors, with a common goal - the success of UKplc. 

If we can help make investors more savvy and help companies choose the right time and strategy to use ECF, then we will all be winners. This will force the standards of investment opportunities higher, make the businesses more sustainable and cut out the dross.  

The aim here is not make a lot of money. The aim is to help preserve ECF as a functional way to create sustainable SMEs in the UK. The fees will be small. To give you an example a single download will be ~£9 and 12 months full membership will be ~£36. This is still WIP.

Help us make a change for the better.

Big time investor in start ups agrees with US

After the recent article in The Times - https://t.co/95DwWuLTv8 - we were contacted by an ex Investment Banker with some real experience of investing in start ups over 14 years. We thought we would share it with you. It's not the picture Crowdcube paint, but that should come as no surprise.

So Mr X told us that he invested over £2.8m in 12 start ups between 2000 and 2014. That is a very sizeable chunk of cash in a good variety of businesses. Mr X considers himself a sophisticated investor who knows the ways of the world. He was in the City for 24 years. 

Below is the text of his email laying out his story - 

Just read about your blog in the Times, and took a look. I hadn’t seen it before as I gave up investing in start-ups two years ago, for reasons you will see below.

Anyway, real and current evidence is very difficult, so I thought I would share my experience.

Between 2000 and 2014 I invested £2,814,000 in 12 different start-ups.

Of the 12, There have been

Two successful exits - one made 400% return, but this is 11% IRR over 16 years which is the real measure. The other 82% return in 2 years, 42% IRR, and I had to work hard with the company to make it happen.

Six total losses - most have failed pretty quickly, within 2 to 3 years.

One alive and cash generative

Two alive zombies - spinning wheels but not making or using cash One semi- zombie, good product and in seventh year but constant fundraising

If I count zero returns from those still alive but no market for their shares, I have lost £1,264,000, which equates to IRR of -14%. This is with EIS rebates, which have been considerable at £610,000. If I ignore EIS benefit, £1,874,000 has gone!

But it’s not that bad as the remaining four companies I estimate are conservatively worth c. £600,000. Let’s add that into the mix and net loss is £664,000, and IRR of -5% over 17 years.

For full disclosure, one of the total loss startups was one I founded myself and worked hard on. We burnt through £800,000 of shareholder funds (including £200K of mine). The business model just didn’t work so we cut our losses.

These investments were at what seemed at the time very sensible valuation levels. Certainly far more sensible than we see today on Crowdcube and Seedrs, where I can only describe some valuations as bonkers. So I can only assume a portfolio of investments would be even worse than my experience. My last note to investors is to avoid films at any cost - two of my total losses and one of the zombies were films. The intricacies of the film business and completely unethical practises I experienced, but which seem normal to them, stack the odds even more against investors.

We think this makes interesting reading - if only to warn people that promotions used by the likes of Crowdcube are highly misleading. You can see from this that returned are very hard and often take considerable input - something that never happens in Crowdcube funded companies.

That is not to say ECF cannot work - it's just that the Crowdcube model cant. Unfortunately The Times forgot to include in their article on our work , the fact that we offer companies looking to use ECF a consultancy service. The idea being that we help you gain the best results. Its cash flow neutral as we only charge on results. We are not negative about ECF but we can see and understand the shortcomings of the Crowdcube and Seedrs models. There are others out there trying to do a better job. 

Big slap on the back for ECF Solutions

This what Arena Partners in New York think of working with us - 

''ECf Solutions provided invaluable counsel through every stage of the equity crowdfunding effort we recently helped develop for a major UK client. While equity crowdfunding is simple in theory, it can be difficult to know what will work and what won’t for your specific raise, and how to handle specific aspects of the total ecf campaign. 

That’s where ECf Director Rob Murray Brown's unique expertise and guidance come in. They made all the difference in ensuring a focused and compelling ecf submission.” 

Peter DePasquale, Partner, Arena Partners – a New York based brand development firm that works with numerous SME’s

ECF Solutions launches its first client on Seedrs!

ECF Solutions helps businesses create equity crowdfunding campaigns

We are very pleased to tell you that as of a few minutes ago we have launched our first client on the Seedrs platform.

You see we can be positive!

Anyone who would like to know more should contact us via this site or via the ECF Solutions website. We will then send them the link and they can view the campaign at their leisure.

This is not a recommendation or investment advice  - its just a heads up about what is happening.

ECF Solutions can help prevent your Equity Crowdfunding campaign from crashing out.

We were contacted recently by an Equity Crowdfunding pitch that was live on Crowdcube.

You don't want your campaign being derailed.

The pitch wasn't doing very well and it was immediately obvious to see why. They asked us for advice but why would we give them a freebie when they hadnt bothered to contact us beforehand?

Nothing essentially wrong with the company but they had made a couple of fatal errors in the way they had presented it.

As we write they are almost certainly going to fail to even get to 50% so they will get nothing and this failure will sit on the internet for years. Crowdcube clearly had given them no advice about what are very obvious flaws in their plan - but I'm sure you will not be surprised by that.

So don't take the chance; we offer a free service with the payment only due after you have raised the money. What have you to lose?

Road Trip to Crowdfinders

We are travelling. Going to London for the Crowdfinders event and to meet with clients.

The hope is that the gathering of most of the UKs ECf sector in one space will give everyone a chance to find out what is really happening - not the PRing version but the real one. And of course we will be letting you all know what we think next week.

Meanwhile, it looks as though another Crowdcube success story maybe in trouble. Jam Vehicles raised £165k but are now very late with their accounts and have had a GAZ1 stuck on them. Of course this maybe just because they are so busy that their accounts are now 3 months overdue.

An increasing amount of what we read on the UK ECF scene shows a distinct split in attitudes. Two totally different and non convergent views are emerging - it all depends at which end of the telescope you are standing. Those in the industry seem unable or unwilling to be frank about its very obvious flaws and those who view it from the outside with scepticism seem equally unwilling to see the enormous potential benefits if we can get it right.

Somewhere in between is the answer. Time to open up some minds.

Why we are doing this?

I had a comment posted by a Chris yesterday. Quite aggressive and very rude but it made me think  - so why am I doing this?

There are various reasons and they keep increasing the more I do.

Despite what Chris said, I have run several of my own businesses from start up, some successfully and some not. In fact for 35 years that is what I have been busy doing. I know the difference between failure and success and bullshit and the truth. That is one reason I do this - to make sure that the ECf platforms cannot get away with the lies they have been stringing people along with. The evidence we put out here is all factual, backed up by filed company accounts.

Having started this blog, I came across a few people who enjoyed it and so carried on. In the early stages, I had no intention of making this a commercial venture. However, as luck would have it, people liked the approach and started asking me for advice. So the blog has been the the driver for ECF Solutions Ltd, which is about to launch its first ECf campaign.

Also as a result of the blog, we had approaches from several papers and websites asking if we could write for them. Hell yes, if you pay us, we said. And they did.

So this blog, which Chris has so ridiculed, has now produced two sources of income and started a new business for someone who had semi retired. I have to say I'm loving being back in the saddle Chris.

I had no idea what content marketing was before I started this. When I did my Cranfield MBA the internet was just getting started. Now I have it for breakfast every day.

Chris you will have to forgive me for not publishing your comment but it was written with such venom that most of it doesn't make sense. Feel free to try again but take a little time to read it through. Happy Easter to All.

It is getting very noisy out there

The world of Crowdfunding, Equity Crowdfunding and P2P lending is becoming increasingly noisy. It is getting hard to find your way around safely.

Here is a breakdown of the scene as we see it today

Established platforms

Name                                 Model

Crowdcube                          Retail

Seedrs                                  Retail

Syndicate Room                   Investor

Angels Den                          Investor

Newcomers

Name                                   Model

Venturefounders                    Investor

GrowthDeck                         Investor

InvestDen                             Retail

Angel List                             Investor

On the Edge

Name                                    Model

Bnktothefuture                       Off shore

Cadia SE                               Off shore

Square Knot                          Now Growthdeck

Crowdrating                          Advisory

EIS Intelligent TV                  Advisory

P2P Lenders

Name

Trillion Fund

Zopa

Funding Circle

Lendinvest

Thincats

Crowdfunding

Name

Indiegogo

Buzzbank

Fundme

Crowdfunder

Unbound

BloomVC

Kickstarter

We are not commenting on the platforms  - if you want to know what we think you will have to pay! We run a new equity crowdfunding consultancy that helps businesses break down this noise and make sense of this funding channel. For more see here ecfsolutions.co.uk 

We see the growth of the off shore (ie unregulated) platforms as the most worrying aspect. Different UK platforms use very different models and achieve very different results for the vast variety of business sectors that approach them. Clearly knowing which is best for what, greatly increases the chances of the ECf campaign being a success. Our advice is totally independent.

Just when we thought we had them all corralled, we have a new entrant. At some stage soon they are going to have to come up with some better names but Angels Cube is just out - a tech based start up ECf platform. The guys are French so maybe that explains the name?

Some FREE advice for Left Shoe Co

A current pitch on Crowdcube has made a massive error - uncorrected it will not fund.

So here is some FREE advice for The Left Shoe Company from all of us at ECF Solutions

1. Don't talk vaguely about converting £500k of investor loans into equity - you need to either have done it or be more precise - what value, dilution to this round etc etc.

2. Don't talk vaguely about converting an outstanding creditor debt of £100k into equity  - see above.

3. Don't talk vaguely about renegotiating a bank loan but show it being paid back on the projections - it makes you look pretty foolish.

4. Why have you chosen to pitch only 2 months before your first accounts are due to be filed? With all the above and your claims, you really need to have filed these already - that isn't much to ask surely.

Of course this is all advice you should be getting from Crowdcube, if they bothered to employ people who knew what they were talking about. As they don't, you should have come to us first and we could have sorted this out for you. Your pitch is going nowhere unless you take our advice.

Harry Brompton's Crowdcube campaign is not such rich pickings

We wrote about Harry before http://fantasyequitycrowdfunding.blogspot.co.uk/search?q=+harry

Simply put the campaign is over valued. With just 1 day left and despite being a BAW (Branson Award Winner), they have raised under £100k of their £300k target. They have made so many mistakes it's hard to know where to begin.

They simply dont understand how this works. Of course we could have told them and we are pretty sure that had they taken our advice they would have raised their money - but they didnt ask.

That is why we set up ECF Solutions  - if you are thinking of using equity crowdfunding, don't follow Harry, talk to us first. It's free to chat..

Why use ECf Solutions' services for your Equity Crowdfunding Campaign?

Why use our services?

At ECF Solutions we aim to make the most of your chances of raising funding using the Equity Crowdfunding channel. This is a new way to raise business finance and each campaign has to raise its full amount or you get nothing. So you simply do not want to fail – it’s too important to take a chance with.

Of course you can do it for yourself. The average failure rate is around 70%, although this does vary from platform to platform. We have seen many instances of campaigns that failed because they didn’t understand the metrics of this new channel, failed to understand the way the Crowd needs to be handled and failed to tailor their business model to attract the investment. Despite their businesses being investible, they failed to raise the full amount and therefore left with nothing.

Failure in your equity crowdfunding campaign will remain on the web for many years, causing you considerable problems should you wish to try again with a better proposal or raise money using a different option.

Our Services

We offer a bespoke end to end service, tailored to your needs.

We get involved right from the outset, advising you on the best platforms for your offer, looking at other similar campaigns, advising on the equity offer and investment vehicles and helping with the campaign documents and financials. We then see the campaign through with you, advising on actions to take if it stalls, keeping you up to date with any queries from investors, helping with the live pitches and helping wherever we can to bring about a successful conclusion. Campaigns can be very time consuming and we understand that your job is running your company – we take the hard work out of your fundraising.

Our advice is based on studying hundreds of campaigns since 2011 across multiple platforms. We know how to achieve the best outcome.

Contact us for a chat. What have you got top lose?

A new hope for ECF

For Equity Crowdfunding there is light at the end of the tunnel

Since 2011, when Crowdcube launched the first on line ECf platform in the UK, hundreds of businesses have tried to raise money using this channel. Many have succeeded but very very few have come close to meeting the projections used by the platforms to promote the pitches. This has to change.

We blame the platforms - far and square. We know from talking to entrepreneurs that the larger platforms push businesses to escalate their financials. Sexing up the dossier in other words. We have shown 50 or 60 examples of this on this blog - there are many more waiting in the wings.

This is just crazy business practise. Over trading in an early stage business is one of the most common causes of failure - so actively encouraging it shows strong suicidal tendencies.

In a few days we are launching ECF Solutions -  a bespoke business service for companies thinking about using ECF to raise funds. We aim to promote only businesses we feel have a good chance of raising their money and going on to deliver some return for the investors. If we dont back winners, we wont get paid!

Failure is all part of the start up game - many would claim that you learn far more from it than success. However stupidity should be kept to a minimum. Advancing claims about a business that simply can never come true is plain stupid - it doesn't help anyone in the long run. As the main platforms seem unable or unwilling to help prevent this and the investors are still being dazzled by the promise of the next FB, its up to some sensible well seasoned business heads to sort out the mess.

Launch day has been brought forward to tomorrow.