Crowdcube's new headline figure of £130m is the amount of money that people might have invested on their platform. Not what they actually invested.
Crowdcube's latest PRing fest takes the use of fake news down into the swamp. £130m invested in companies using the Crowdcube platform are the headlines. It is simply not true.
Well that all depends what you mean by the word 'invested'. We would have said that was pretty obvious but Crowdcube have reinvented its meaning. When they use it, it means 'pledged' for a short time. In our book the two are a long way apart unless you wish to purposefully mislead. Something that would clearly not be acceptable on a FCA regulated platform.
The real amount invested or in other words, the real amount that pitching companies took away with them to use in their businesses was (according to a not headline figure from Crowdcube) only £90m. This £90m was only up by 10% on 2016, whereas the headline figure of £130m was up by 19%. You can see why they do it.
So what is this £130m? Well it's the same as say Carillion issuing a statement (a bit late now) stating that their total revenues were XXXXm, for us only to find out that this figure represents the total amount of business they pitched for. Only 75% was in fact real income generating business. Crowdcube have added up all of the money pledged on all of their pitches - successful or not. To look at it another way, we know we are right as Crowdcube's revenues from their successful pitches were only £4m and that did not come via £130m invested. On what is now a commission of 7%, this 4.4% for the last year seems an extremely poor return.
It is highly misleading and idiots in the press like Crowdfund Insider just lap it up. Sadly it proves that despite all the claims and the new CEO, Crowdcube are still embellishing the facts and using whatever it takes to make money and mislead.
The only good news for Crowdcube investors here is that the figures for 2017 were marginally better than 2016 and that the company will only have lost another £4m - unless they have let the costs slip. After all their PRing, it has not been the year they promised 12 months ago. But they are still open for business unlike so many of the companies that have funded via them.
