Come and sleep with the enemy: that was how online agent Russell Quirk, of eMoov, threw down the gauntlet to EYE readers, inviting high street agents to invest in his crowdfunding appeal for £1m – a pitch that values his business at £20m.
And that was exactly what reader PeeBee investigated doing (equipped, so he said, with teddy bear and comfy pillow).
On the CrowdCube website, PeeBee asked for help with understanding some of the mathematics – only to see his post removed, while Quirk himself responded to PeeBee, calling him an antagonist with a “mission to troll online estate agents”.
PeeBee, who is a high street agent in the north-east, said he is still looking for answers.
He has now posted up on EYE’s original story: “SO… along I goes – teddy and pillow at the ready for our sleep-in (although I did expect it to be more of a stay-awake, if being honest…) – chucks The Quirkster a few questions in relation to his proposition – and HEY PRESTO! my comment is immediately reported, removed ‘for moderation’ and responded to by the man himself – me being referred to as being ‘somewhat of an antagonist in the industry in your mission to troll online estate agents’ (still not sure whether that is an insult or a compliment…)
“Simple fact being – he dodged the questions I raised.
“I wonder why… and STILL want answers.”
By yesterday evening, eMoov had raised £685,010 from 148 investors. The company will give 5% of equity in return for £1m.
* Not one single online agent or other proptech firm was listed in the top 100 Tech Track list issued yesterday by the Sunday Times. The omissions from the list – which measures fast growth – were despite the fact that companies were not required to be in profit.
Comments (33)
It seems that despite my asking Crowdcube to confirm how long the ‘moderation’ process takes I’ve had no feedback.
I reckon they’ve simply overlooked the fact that there was nothing whatsoever ‘wrong’ with the post and have therefore overlooked the need to reinstate it.
SO… I’ve done it for them!
How kind am I? ;o)
Oh, dear – it’s disappeared.
AGAIN.
OH LOOK – the original post has been reinstated like it never happened! No explanation – nothing.
I wonder if it will get a more relevant response from The Quirkster than the original, in which he stated
“I’ve often indulged in sparring with you on twitter and the trade property forums… However you will have to forgive me for not taking the bait in this instance.”
Looks like I’ll be keeping my tenner, then…
It strikes me that the concept and need for OTM is either not understood, been forgotten or don’t want to know. Some of the anti OTM objections fail as they also apply to any web site or people have other business interest invested in making it not work. All I am hearing is personal agenda towards an individual(s). Nothing constructive. Bottom line is the public don’t see or care about agents squabbling, all they want is to see properties. Who they go to is fundamentally down to the agent. If you are on RM that is where you direct them and the same applies to any other portal. I don’t hear anyone so anti OTM complaining about the other portals unless it’s Z but all sites basically do the same. The arguing recently is more about traffic flow, most is presented as a sales pitch and like all stats often manipulated. If I was to add up all the unique visits RM & Z say they get each month, during the year its more than the people living in the UK!
And this thread is supposed to be about eMoov!
IT IS, Woodentop – but that doesn’t stop a bit of playful banter! ;o)
Crowd funding is a rich mans betting game. So rich, not that much bothered if they loose but Joe Public is a different matter. The only certain winner is the bookie and middlemen or in these cases those that that are at the top of the pile taking a fat salary from an investment that only JP can loose.
“You can say what you like, answer to nobody as it is completely unregulated”
Hummmm, sounds familiar !
I take it thats a dig at estate agency???
If so you are so far wide of the mark.
Agents (traditional high street agents not onliners like emove) only get paid once the property is sold. We are also regulated by the OFT and Redress schemes if a customer has an issue. And can also be brought up on criminal charges if we break the law.
Crowdfunding you can say whatever you like to raise money and what you will use it for. You do not have to prove anything regarding your figures and you also do not need to even spend the money on what you say you will.
I can start a crowdfunding page today, value my company at 50 million (btw not worth even 10% according to my professional accountant) look to raise 5 million for a 10% share say i am going to invest the money in an aggressive office expansion nationwide.
Let say i only raise £500,000 i can keep that money and give the retrospective shares. but if like emove means nothing as not turning a profit means i pay no dividends.
I can then take that £500,000 and decide i do not want to go ahead with office expansions instead i feel like i should get an end of year bonus so pay it to myself.
Investors will own their shares, will not get and dividends (most likely ever) and i will be £500,000 richer.
As an investor i would be really upset to find out the company was never worth 50 mill and also upset my money was not spent what it was promised on. So i want to complain? to who? nobody! not even the FCA or the police!
And you tell me crowdfunding is not a con ………
Of course this in not the case with emove i am sure ……….
Yep, sure is..!
I’ve no first hand experience of Crowdfunding but am a seasoned business investor. Also I have owned and managed business’s regulated by the FSA (and the like) so I can take a balanced view between extreme regulation verses ‘voluntary’ regulation
Crowdfunding seems like a concept that authorities will never regulate successfully and I guess rewards the funded. Its a gamble with the odds stacked against a decent return on the investment. As long as you know that at the start of the investment what your getting into and spread your bets across multiple investments then good luck !
Thanks for the reply but as i say your comparison is wide of the mark.
As with the now defunct FSA replaced by the FCA you only have guidelines not rules. If a company starts up and wishes to stray from the guidelines they are punished as are estate agents.
The problem i have with crowdfunding (as well as what i have written above) is that the returns are so minimal, I think emove is valued at 20 mill and is not turning a profit, it is not expected to turn a profit for another 3 years (we will see if that happens) how many houses do they need to list at circa £600 to make a profit? you are better off keeping the money in the bank with low interest rates or buying a property to rent!
Too many of the crowdfunding ideas are not going to be profitable, which in part why they are crowdfunding as bank and angles/dragons do not see them as viable businesses.
Emove in my opinion will only every make money if listed and even then i fear astute investors will avoid.
As an experienced investor Che, would you know invest in emoves offering?
I wouldn’t invest via CF but if the right deal was available, absolutely I would invest. Its a future model that stands a fair chance, in some form or other and in the long term of growing grow and be worth something. Change is coming and if you spread your bets you might be lucky and get one that cuts though.
But sorry, in terms of FSA FCA (or whatever its called now) regulation V Estate Agency….no contest.
I think anybody would invest if the right deal is available and that’s the issue with crowdfunding, its not the right deal.Its dressed up to be but its not.
Out of interest why do you think estate agency needs regulating? what do you think regulation can provide that we currently do not have?
Its easy to say it makes an industry more compliant but in what? We already adhere to money laundering, already governed by the estate agents act, already have to be part of a redress scheme, already have to lodge deposits with a third party for lettings, need PI, we can be brought up on criminal charges if we break a law, have data protection, need to abide by ASA.
I fail to see what else regulation can enforce?
You are not an agent, so maybe i am missing something, you have been kind enough to respond today maybe you would be kind enough once more?
No problem. Regulation for me equates to governance and compliance, ergo the ability to act according to an order, set of rules or request.
External audited rules that are imposed upon the organisation as a whole along with systems of control that achieve compliance designed to protect the interests of the customers to the maximum possible extent.
For a million billion reasons this wont happen but the new breed of online agents, because of the use of technology do seem to be building in compliance behavior. Technology can deliver transparency which intern makes it difficult to hide info.
Oh, btw, your right i’m not an estate agent but I do own one. Have done since 2007
Thanks for your reply.
I do not agree with it, but nice to hear reasons why.
I cannot see what regulation can bring to the party from what you have said above apart from maybe an audit (which i cant see improving anything).
You mention rules, what rules do you think need to be in place that are not already?
As for online agents being more transparent, how? All agents are online these days and we are all bound by the same rules.
Again not looking to pick holes but understand, I believe in the most part agents work to the rules and do not break them. Vendors and purchasers are safe and get a good service.
Third parties such as solicitors, lenders, mortgage advisers tend to create the delay which in my experience creates the buyers and sellers the greatest stress as they do not understand the process and then complain to the agent as they think they can magic a solution.
I would add the online agents offer a worse service as they are taking money upfront so no commitment to service. And have been seen to bend the truth comparing themselves with traditional high street agents when in fact the offering is less (albeit at a lesser fee).
So nice to see a polite, reasoned debate and exchange of views on here. Makes a lovely change 🙂
Well… it sort of went like this:
“Maybe you can help ME with my mathematical issues, Mr Quirk? They appear to be very similar to those of others.
First of all thank you for the open invitation on PropertyIndustryEye to ‘join’ you over here, ‘in bed’, so as to speak. I have brought my favourite teddy and a comfy pillow but I doubt we will be getting much sleep. I’m up for some rough and tumble.
I hope that more colleagues in industry do exactly the same – Butt to be honest I Caan‘t imagine many of them will as we are all looking forward to the best selling day of the year which by the way hasn’t happened yet – how unfortunate that you clearly peaked too early in the race for sales and it’s all downhill for you now up to the next date you would like to pick out of thin air for another blatant shot at gaining extra column inches… ;o)
Anyways – back to the Numbers Game. And it IS a game – isn’t it? Here’s the thing. In your pitch you state that you have so far signed up 9000 PAID customers. On your website – and everywhere else you can possibly quote it – you have been responsible for 4500 sales.
With me so far? By my reckoning that leaves 4500 – yes? Otherwise translates to 50% success to date. LESS, of course, the numbers of available properties you have. Which, according to Zoopla is 1082, and according to Rightmove is 1167 so let’s use the median – 1124 – and that reduces the balance at around 3376.
Now 3376 as a percentage of 9000 is 37.5 – and it is THAT 37.5% of your register of 9000 units that is the issue here with me. NOT with you, of course – you’ve already had their money and it’s included in your past income figures – but in terms of your claimed statistics it kinda bu99ers them up.
Further up this debate thread you state “The typical high street agent sells 41% of its stock (according to the RICS). By way of example, in August our ratio of sales versus listings was 76%. In July it was 73% etc.” You are not comparing apples with apples there and you know it. You are not even comparing apples with elephants.
Basically, it could be reasonably assumed from MY figures above that you actually ‘sell’ [b]62.5%[/b] of the total number properties you list. Is that correct? – if not I welcome the [b]actual[/b] figures from you and I will reassess accordingly.
Of course all the above would not necessarily have been important before – you only took 100% payments up front – but now that you are offering a more ‘normal’ NSNF proposition that would mean that instead of achieving 83.33% of £595 (you don’t seem to mention anywhere that you are quoting VAT INCLUSIVE FEES on your proposition by the way…) on EVERY listing you [i]could[/i] only earn £1195 x 83.33% (removing the dreaded VAT element again) x 62.5% – which you have to admit is quite a drop and it would be interesting to have clarification as to what percentage of future listings have been forecast at the ‘on sale’ fee model in future income predictions.
But of course the average ‘investor’ won’t know that – they just see the figures you throw at them.
But I know a bit about the industry. 38 years of scars to show – and counting. You want ME to invest in ‘the future’ as you see it? – then this is MY due diligence.
I’ll no doubt have other questions in due course…”
And thats the problem with crowdfunding everyone!
You can say what you like, answer to nobody as it is completely unregulated.
As soon as questions or comments appear you do not like you can dismiss them as nobody else will hold you to your claims and promises.
This has to be one of the worst investment opportunities ever, but a fool and their money I guess.
There is no way he would/could answer the math question, anyone can fudge figures, I’ve been doing it for years 😛
What were your questions PeeBee?