Doisy and Dam should now be in profit - £136k for year ending Sep17. But the Sep17 accounts just filed show yet more losses totalling £230,000 for the year. This year they are supposed to be making profits of £500k.
If and when we come across a Crowdcube funded company that actually gets close to its projections, we will let you know. It seems to be a pipe dream at the moment.
So if ALL Crowdcube funded companies fail to get close to the figures used to sell their equity, when is the FCA going to step in and say - ''Yes, this is all clearly misleading'? Because, clearly it is. We are talking about an almost 100% record for misleading projections. The normal distribution one might expect, would be for 40% missing, another 50% being there or there abouts and say 10% showing better results. Not figures showing 95% missing by a country mile and 5% max being there or there abouts. And this 5% is shrinking.
We hear ECF evangelists say that this fact is not important - you expect all start ups to miss all of their projections. We think this is nonsense. They say this simply because to say anything else would cause harm to the worst offender, Crowdcube. They prefer to trumpet the now defunct option that an upward valuation in a follow up funding round indicates a ROI for investors. Come on.
We need change.
Thinking of writing to my mp.
ReplyDeleteIs there a spreadsheet of companies, amounts raised, targets missed rhat backs this post that we can attach to a letter as evidence.
Ideally to make the point something that says 100m raised 20m gone bankrupt 80m still making losses of 15m compared to projextion of 40m profit and no one hit the projection etc.
If you write to your MP, another stat that you should try to incorporate is the loss to the taxpayer as a result of EIS/SEIS relief and failure to pay VAT, PAYE, rates, etc. when these companies go bankrupt. Jf
DeleteIt's a good point we have been making for 3 years. Companies generally dont just close, they leave behind a considerable backwash of unpaid creditors. You might also wish to include the cost of the lost opportunties that funding one business because it had massively exaggerated projections, instead of another one with that money finding its way to a well run sensible start up. All in the end so the platform can make a commission.
DeleteHi - you can contact me on rob@ecfssolutions.co.uk This information is held here and we have records on over 400 companies. Of that 400 we are looking currently at 96% missing their projections. This figure is lagged by around a year due to the out of date way we handle accounts in this country. From our data this figure has increased in the past year so it is not something that can be put down to Crowdcube learning curve. Crowdcube denial curve, perhaps.
ReplyDelete