An interesting comparison can be made between the many companies that have funded via the various ECf platforms since 2011 and one particular start up which took a different route - Tropic Skin Care.
Tropic has been trading for three years and to YE June 2014 showed quite remarkable results - turnover up from £600k to £2.5m, with profits of £400k. So whats the secret?
Well it appears to be fairly obvious. Lord Sugar is one the two directors and is the main funder behind the venture after the founder pitched the business idea to him on The Apprentice.
You would also have to factor in the dedication of the founder Susan Ma. As with many great entrepreneurs, she started making product in her kitchen and selling at markets - giving her invaluable insights into her customers' desires. The sort of insights ignored by the instant success junkies who seem to inhabit the ECf platforms. Between them they came up with what appears to be their eureka moment - a revamped Avon Lady scheme as their main sales driver.
It's fair to say that no company that has raised money on any ECf platform has achieved a tenth of this success. In fact there has been very little success full stop.
The big or rather massive, difference is in Lord Sugar's input. Money is required but there is no substitute for contacts and experience. These he has in spades. The investment appears very lite compared with most ECf pitches - a mere £200k of share capital recorded in the accounts.
So the lesson has to be that ECf by itself is not the cure all - businesses that are 'successful' in terms of raising money do not automatically go on to grow. In fact the evidence to date is that encouraging poorly planned businesses to raise using overstated projections ends in tears. You can be sure Sugar wouldnt be accepting the sort of ridiculous projections that the platforms promote.
The answer is...........combine an ECf platform with top notch business mentoring. Where are you?