Wednesday, 25 March 2015
Is that Superman or just more PR.
Modern use of PR illustrates both the best and the worst of our world.
Articles like this one by Crowdcube - the UK's largest ECF platform, fall firmly into the latter selection -
In it Luke Laing, Mr PR att Crowdcube, states that they want to continue to build on the company's success. What success? Why is raising funding for companies using completely undeliverable sales and cash flow projections a success? Most of the companies funded have closed, gone bust or are just trundling along with no hope of ever returning a penny to investors. Not one company since 2011 has managed to exceed its projections and only one has matched them. Investors have seen a negative ROI.
He goes on, he always does, about the £70m raised through the platform since 2011. He fails to mention that between 30% and 50% of this money is being paid for by all UK taxpayers - whether they like it or not. The misuse of the EIS and SEIS tax schemes is one a the greatest scandals never to be mentioned.
The only beneficiaries of this ECF explosion are the ECF platforms. With a hint of irony, even Crowdcube has missed its projections and is now a long way behind where it predicted it would be in 2015. For sure, without government aid and tax payers hard earned money via EIS and SEIS, Crowdcube would have closed by now.