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Wednesday 10 February 2016

Crowdcube's sophisticated investors



There has been much talk about the sort of investors that the very lax membership requirements on the ECf Crowdcube will encourage.

We came across a recent series of Q and A on the Crowdcube forum which sums up the issue.

Q - How would we get rid of the shares once we have bought them?

A - We aim to float on a small share trading platform or you can sell them via a private company that deals in private shares - our chairman is an experienced investment analyst and has experience in both areas.

Q - How long would that take?

A -We are aiming for 5 years.

We dont know whether this convinced the questioner - we certainly hope not.

What is meant by floating on a small trading platform and what chance has this company of achieving this in 5 years - none.

What companies trade in these private shares? Well for some there is Asset Match -  a very new platform that has the likes of Brewdog share auctions once a year but there is no active trade in private shares in the UK. Certainly not for companies at the level this one would be at even in 5 years time.

These responses are total nonsense and we suspect the chairman is as well.

The very fact that this investor is considering parting with cash and is already a Crowdcube member (no doubt listed as an investor in their very helpful factograms) when he has no clue what will happen to his shares is beyond ridicule.

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