E Sign UK Ltd return to Crowdcube for more cash at a simply crazy valuation

Yet another Crowdcube ''success'' is back for more money. This one is a cracker.

Only a few months ago at the end of 2014 E-Sign UK Ltd raised £50k to get going. At a valuation of around £500k it was probably a punt. Now the company is back asking for £200k for 4.88%. So since the end of last year they must have made some great progress.

No. They appear to have made little real progress, lots pf talk but little action. Sales of next to zero. A major competitor is out there so how on earth can they now value themselves at over £4m - or 8 times the value of a few months ago.

So according to comments from Darren Westlake, CEO of Crowdcube, first round investors have done incredibly well and have seen a ROI of 8X.  

Come on guys. Please.

Powered Now - a typical Crowdcube fudge up

Powered Now raised £580k in September 2014 - so only 9 months ago. This first raise is not mentioned in their new pitch on Crowdcube. The stated target then was only £350k - same as the new raise.

So why are they raising more money so soon when their plans to raise £350k were so oversubscribed? Simple - the projections used in the first raise were the usual Crowdcube nonsense. They spent far more on marketing and made far fewer sales. This is not to say that it wont eventually succeed but it is typical of the naive approach used by pitches and encouraged by Crowdcube, which is verging on the ignorant.

Of course the first round investors will now be diluted and then diluted again when this round proves to be over optimistic. They have not filed accounts since September so there is no way of verifying the numbers used in this second pitch. If they are anything like the first one, then they can be binned.

People are still piling in though - why are we so surprised. Once a gambler starts losing, thats when he spends most of his money.