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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