Monday, 21 March 2016

Are Crowdcube insane?


It may seem an odd question but bear with us.

One rather well used and often misquoted definition of insanity is 'Doing the same thing over and over again and expecting a different result'.

Well Crowdcube are certainly guilty of that.

A little research reveals that a growing number of their pitches are forced to increase their equity and lower the A share threshold during their campaigns. Just look on the site right now.

Currently 6 out a total 20 pitches have reduced their valuations. Half of the remaining 14 will have to if they want to complete their campaigns. So that is 50% plus of the active pitches at anyone time where the companies are over valued.

There is a message in there somewhere. Its hiding in clear sight buts its definitely there.

The obvious conclusion that we can all see and they clearly cannot, is that the people from the OTL department are not doing a very good job when it comes to valuing the offers they are putting out. Quite apart from the unprofessional look it gives the site, it is a firm slap in the face of investors who are being asked time and time again, to over pay.

Here is a tip - for free.

If people consistently tell the pitches that they are over valued, then they are - over valued. If this continues for sometime, as it has, then why not try to change your metrics for valuations or alternatively employ some people who know how to do this.

Of course companies that do not wish to make this mistake can contact us for free advice in the first instance and then some genuine guidance in how to go about raising money via ECF.

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