Friday, 30 October 2015

Hello from the Summer Isles

Hello from the Summer Isles

We were not going to post whilst on a short break in the most serene setting you could imagine and yes it really does look like this even on the 30 October. But needs must  -  a ludicrous Crowdcube fund launch and an even more ludicrous ending to the farce that has become the Early Bird pitch have demanded a response.

Crowdcube's new £500k EIS fund must be a piss take, right? With only 1 out of 300 funded companies returning anything to investors and at least 10 bust, Crowdcube have now embarked on a managed fund that will, over 5 years, make you loads of money. The £500k will be invested in 8 to 30 Crowdcube pitches - carefully selected by a group of independent and Crowdcube 'experts'. Good luck with that guys, you will be struggling to find 3 let alone 30. 

For the privilege of having this expert guidance, you will pay a fee equivalent to 10% over 5 years, on top of your investment. This is the good bit - if the company hasnt 'exited' after 5 years, the management will end and you will be left holding a worthless piece  of paper. A cynic might look at this as fairly desperate measure by Crowdcube to increase investment in their pool of increasingly poor pitches. The same guys selecting these pitches are the ones playing with your money. Enough said.

Earlybird have been sending out their latest SOS emails to entice investment in their Crowdcube pitch, which like some over ripe Agen prune, will finally fall and die today. Thank the Lord. The email starts - ''It is our plan to deliver an minimum of 13x ROI based on current performance / growth targets and with our new routes to market this could be upwards of 66x ROI in the next 3 to 5 years.'' We think this is a clear breach of FCA rules amongst other things. Crowdcube have moved the goal posts on this one so often the pitch has now been developed into a new supermarket. 

Maybe this would be good opener for the new fund?

PS - The ridiculous farce with Early Bird has just been extended for another 6 days!!

3 comments:

  1. Hey there!

    I think the real issue that I have with EarlyBird in particular is that 'We also have an agreement in place with Crowdcube to close out the
    round below the £300,000 target, I can't state exact details until after midnight tonight but we feel it is a great compromise.

    Surely, they should tell potential backers and investors how this agreement will affect their long-term business plan, before making they commit to an investment.

    Thanks,

    Riaan

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  2. Not sure if you are aware of it, but EB seems to be simultaneously raising money on AngelsDen
    https://www.angelsden.com/project-view/EarlyBird/

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    Replies
    1. Yes we wrote about it in Equity CF Tarts post. Diff % of equity and the lead investor is the chairman!!

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