Monday, 13 March 2017

Crowdcube's corpses grow higher by the day


Purple Harry have eventually called it a day - having never come close to their modest, by Crowdcube standards, projections. They were backed by Britain's Olympic stars the Brownlees Brothers

We dont yet have the figures but for 2016, the company was supposed to be making a profit of over £200k. Needless to say it didnt. When Crowdcube repeat their denial that this all going tits up and explain that very few companies have closed, they ignore the likes of Purple Harry who have struggled on for over 4 years since funding and achieved not going bust - until now. There are many many more out there in a similar situation; as yet under the radar. 

Despite the views of the CEO of Seedrs, we do not believe it should be fine to project unattainable goals in order to encourage investors to part with their cash.  These projections go into making up the valuations against which the shares are sold. The fact that your platform states it doesnt endorse them but makes them available only through the platform, is like Del Boy selling a car based on its top speed, even though to drive at that speed is against the law. It doesnt help investors, it certainly doesnt help the businesses and it doesnt help UK plc; who have now part funded (S/EIS) all these failures.

The only people this stupidity helps are the Insolvency Practitioners. 

When will the Government wake up?

Some platforms are far too arrogant given their total lack of success to date. Projections should not be Del Boy (no offence Del) style persuaders - this is simply too important for the platforms to be able to dictate their own terms.  

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