Tuesday, 14 June 2016

Crowdcube just keep it coming & coming & coming ..........

Tidy Books Europe Ltd raised £125k on Crowdcube in 2013

Last year they tried to raise another £150k but failed.

So we have a projections used for last year's attempt to compare to the real accounts just filed for YE August 2015. Needless to say the filed accounts bear absolutely no resemblance whatsoever to the 2013 projections. But you'd have guessed that already. You would also not be surprised to know that in 2013 they had no plans to raise more money and thereby dilute shareholders.

What is more alarming and if you read this blog you will know it is becoming almost an everyday occurrence, is the fact that the historic accounts to YE 08/15 produced by Crowdcube in last year's pitch, are not the figures that have just been filed at CH.

So here we are again - yet another pitch with figures that are purported to be 'actuals' and that have a  material bearing on the investment pitch - where the figures are wrong. If some figures were wrong one way and then others the opposite way, then you could just put this down to either stupidity or laziness. But no, the differences are ALWAYS making the companies' positions better .....never worse.

1 comment:

  1. In both the equity and debt crowdfunding spaces there is frequent use of YTD/'Management Account' figures which turn out to deviate wildly from the actual subsequently filed accounts. On one of the largest UK business loan crowdfunding sites, IIRC, the loan request figures have shown discrepancies of up to 6-7 figures vs. filed accounts, sometimes filed only weeks after the loan request, so the phenomenon is not unique to Crowdcube, although I do certainly do not want to appear to be an apologist for that or any other platform. There are far too many examples which appear to show standards of practice far below what one would normally expect from a financial provider/intermediary with degrees of mendacity, whether by assertion or omission, arguably worthy of a referendum campaign. These remain lemons markets so, as ever, buyer/investor beware, particularly with regard to business plan projections. FWIW, if I force myself to try and find some positives, some minor steps towards improvement are starting to appear, e.g. on the current Crowdcube based pitch for (renamed) JustUs there is at least a risk warning (even if cursory and purely for behind-covering purposes) at the top of the financial snapshot, "Any financial forecasts are not a reliable indicator of future performance", and the snapshot appears to purposefully include the forecast from the previous Crowdcube funding round (as of Dec 2013) for the year to end Dec 2015 highlighted next to the actual achieved performance (assuming the figures are accurately reproduced) so the scale of the headline shortfall (e.g. -95% for actual revenues vs. projection) is more apparent, at least in this example. It will be interesting to see what is produced for the forthcoming Crowdcube (own funding round) prospectus.