Saturday, 25 July 2015
Just how intelligent is the Crowd and what is the use of Crowdcube's Sprint Programme?
The best way to see if the Crowd is really up to making sensible decisions about investments in ECF sites is to look at examples.
A currrent mini bond pitch on Cowdcube is a good example. Hothca is a chain of Chinese take aways trying to raise £1m for a 8% return over 5 years - no security and no early exit.
So, as we reported here a while ago, you would expect investors to look at the Trip Advisor reviews to see how these guys are getting on. They have one of the worst sets of reviews ever seen on TA - 2.4/5 - some old and some recent reviews. It stinks.
How then can you explain the fact that 52 investors have given them almost £500,000 in the Crowcube pitch to date? It is beyond reason and shows quite clearly that the majority of people cannot look after themselves and should not be allowed to pass the pathetic excuse for a test that Crowdcube have on their site for 'sophisticated investors'. Crowdcube dont care, they just want commission.
Which brings us onto the next question - how useful is the Crowdcube Sprint Programme. This purports to be a help for start ups and is run by the platform as an incubator service.
You only have to take a look at the current pitches that are in the programme to see what a sham it is. Crowdcube want to be seen as the noble platform helping UK start ups to raise money and build their businesses. Rather than the greedy PR obsessed 'get them on there and take the commission' platform they really are. The business plans and nuts and bolts of running a business, let alone a successful one, simply are not there. We assume this is because the money Crowdcube make is spent mainly on yet more PR rather than employing some mentors who give a fig. Now if the Crowd knew their onions, they would twig that these plans have serious flaws and investment would dry up. But they have proved time and time again that they dont. After all isn't this one ECF's main attractions - lots of people putting in small amounts which they dont really care if they lose especially as they get half of it back from HMRC.
Will this build sustainable, successful UK SME's - how could it? Sprint? Most of them would find it hard to finish the egg and spoon race.