Wednesday, 29 July 2015
Proof that Crowdcube are scamming the Crowd
A friend of ours who is Crowdcube 'member' was so concerned about this that they contacted us.
A newish pitch on the platform is asking for £X for Y%. All good so far. However on inspection of the pitch financials, the company showed an inward investment from this round of £X plus 40%. When asked how this tallied with the figure of X as promoted in the pitch, they said they needed £X plus the 40% to pay for their plans and that 'overfunding' would cover the difference.
So here we have a company being advised by the platform to ask for less than they really need and to use the overfunding option to get to where they need to be to execute the plans they have pitched. How open and honest is that? Crowdcube know from experience that overfunding tends to add a minimum of £20% to the published figure and can add as much as ten times that sum. They also know that asking for smaller sums, especially with start ups, is more likely to succeed.
The Crowd deserves a better service than this surely?