Fair Value

The Seedrs secondary market opened for the third time today and with it a listing for Blue Crow Media. I have nothing particularly interesting to say about Blue Crow as a company, only that it publishes maps and turned a modest profit for the y/e 31st July 2016. No, what makes the Blue Crow lot interesting is Seedrs’ valuation.

Blue Crow completed their one and only raise on 29th May 2014 or 3 years, 2 months and 3 days ago. With this, as the opaque Seedrs ‘fair’ valuation model goes, because they haven’t raised for more than three years they are subject to “substantive valuation analysis”. I’m not too sure how substantive this analysis is, the lots available are offered at the same price as at the last raise.

If we then compare Blue Crow’s current ‘fair’ value with that of Bird Cycleworks which currently stands at zero (yes I’m moaning about that again) then it calls into question what exactly Seedrs are doing to keep their valuations fair and current? Both companies made a small profit last year (£17k for Bird and £6k for Blue Crow), they have similarly sized balance sheets with positive net current assets (£35k for Bird and £7k for Blue Crow) and have both filed accounts recently. The pre-money valuations at raise weren’t even that different with £450k for Bird and £950k for Blue Crow with Bird giving 10% away for £45k and Blue Crow £58k for 5%. With that information alone, in my opinion, Bird is arguably worth more than Blue Crow.

I think it’s about time Seedrs start publicising their valuation strategy for companies that fall into the ‘3 years since raise’ category. In theory, the number of companies falling into this category is going to increase, are Seedrs just going to leave the values alone so that lots can continue to be listed on the secondary market? If so, what’s to happen to companies who were valued before the launch? I’ve been asking Seedrs to clarify via email and Twitter to no avail, I will keep pressing.

Leave a Reply

Your email address will not be published. Required fields are marked *