CrowdRating Says 96% of Businesses that Received a Gold Rating are Still in Business

CrowdRating, a UK platform that rates equity crowdfunding offers, has released a note stating that 96% of the companies whose campaigns received a Gold Investment rating from the platform – and closed at least a year ago – remain in business. In fact, CrowdRating states that these firms are showing “demonstrable progress” with positive signs of life. The company says that only a single company is showing signs of distress.

Since September 2015, CrowdRating has completed more than 1000 ratings on equity crowdfunding campaigns across leading UK platforms.  CrowdRating bases their ratings on an analysis of all 384 campaigns that closed more than a year ago.  CrowdRating reviewed the latest available information on each of these 384 companies and assessed their relative signs of life, including clear evidence of progress such as financial performance, customer growth, or further investment achieved.  The research found that 24 of the 25 companies whose campaigns were awarded GOLD scores for investment were showing evidence of progress.

Alex Heath, co-founder and CEO of CrowdRating stated;

“We launched CrowdRating with the aim of providing crowdfunding investors with an independent, affordable and reliable screening tool to help them make better informed investment decisions.  These findings are an important validation of our ratings system and show that CrowdRating has delivered on what it set out to do – that is to provide investors with meaningful, independent analysis of crowdfunding campaigns which informs their wider due diligence and ultimately helps them to identify the best investment opportunities and weed out those that are less likely to succeed. Whilst it is still early days for many of these crowdfunded companies, we believe that those we have ranked GOLD in investment will outperform any index of equity crowdfunded companies in the medium to long term.”

 

Below are CrowdRatings Top Ten Crowdfunding Campaigns, according to their research:

CrowdRating Top Ten Investment Scores – September 2015 – June 2016

 

Campaign

Score Investment Platform Campaign Closed Funding
1 Spoonfed 89% £585,000 SyndicateRoom No** Link
2 Racefully 87% £275,000 SyndicateRoom Yes Link
3 SwabTech 85% £580,000 SyndicateRoom Yes Link
4 InYourStride (Compleo Sport) 81% £118,160 Crowdcube Yes Link
5 Storemates 79% £79,590 Seedrs Yes Link
6 SimplyCook 79% £717,550 Crowdcube Yes Link
7 Desuto 79% £55,677 Seedrs Yes Link
8 Empiribox 78% £112,530 Crowdcube Yes Link
9 Witt Energy 78% £2,386,030 Crowdcube Yes Link
10 Value Chain Lab 77% £639,000 SyndicateRoom Yes Link

 

In comparison, of the 48 companies which were rated BRONZE for investment during the same period, 9 (21%) are already showing evidence of distress such as reduced activity, increased losses, or delayed filings. Seven of those appear to have failed altogether.

In 2016, CrowdRating was included in the Financial Conduct Authority’s fast track authorisation and in February this year also received direct permissions to give Investment Advice via its ratings.

“Our inclusion in the FCA fast-track process and the grant of our direct permissions underlines how important it is for investors in this still nascent market to be able to access the kind of independent investment advice that CrowdRating provides,” said Modwenna Rees-Mogg, co-founder of CrowdRating.

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