Tuesday, 27 June 2017

What Investment mocks real independent journalism



What Investment now has a regular column by that well known independent financial journo Darren Westlake. Topic - well of course its how brilliant his company Crowdcube are.

See here - http://www.whatinvestment.co.uk/easy-exit-crowdfunding-investment-2553600/
And here - http://www.whatinvestment.co.uk/is-there-liquidity-for-crowdfunding-investments-2553774/

You will notice that all the plus side is wrung out until even the pith has gone , whilst with the usual guile Darren skates around the downside.

At least have the sense to call it what it is  - Advertorial.

All this from a guy who still claims to be a serial entrepreneur. Well that's probably because the only company of any significance he has founded went into administration and was sold (at the same time Darren resigned) for next to nothing, then went into admin with the IP being bought in a prepack and closed. All in all we estimate that investors lost around £80k, not to mention creditors etc. You wouldnt expect anything less from a Crowdcube founder. Mind you, he is excellent at receiving rewards.

Oddly all reference to this company, ID Telecommunications, has vanished from Companies House but we already hold the administrator's report. CH Google search shows the company but then you click the link you just get

This page cannot be found

Which is odd. It isnt to be found under Darren Westlake's various directors names at CH either. Wonder why that is? Only collapsed in 2006 and was certainly there a year or so ago when we wrote about it here  Is it possible to get companies removed from CH?


When is an investment on Crowdcube not really a Crowdcube investment?


This is a very obtuse line.


Wit Fitness have what looks like a normal campaign that has got off to a flying start on Crowdcube.

£370k already invested.

But in the pitch, it states that £320k was already raised and of that £125k will be drawn down before the pitch completes - so whether it is successful or not. IE it has nout to do with Crowdcube's platfrom or this raise. We dont know if CC are taking commission on it but we'd guess it will enter their annual raise figure.

So what the fudge is it doing on here?

Is this how Crowdcube propose to make investment more open and more democratic? Seems unlikely. 

Wit are not raising £840k, as Crowdcube state - they are at a pinch raising £840k, minus the £125k they have already signed off for and will be spending even if this raise fails, by their own admission. So why not just be grownup about it and say they are raising £715k on Crowdcube? 

Well the maths show that if you remove the £320k already raised then the all important percentage completed graphic looks a lot less impressive. It's not like we havent seen this before a few times.

Monday, 26 June 2017

Correction to Tribe post which has now been removed

Tribe investors have now come through with funding to the original £1.7m, so the report we posted, which was triggered by an Annon post, was incorrect.

We take a great deal of care verifying the facts and as Crowdcube had Tribe listed in their 'Funded Companies' section at only £680k, we took that to mean its was final. Crowdcube have now removed Tribe from the Funded Section until the deal is completed

We were wrong and apologise for any problems this may have caused since the post went live 2 days ago.

Thank you to the anon post which alerted us to this development.

Friday, 23 June 2017

JAM Vehicles raising £2m for electric JIVR

JAM have featured here before. They dont do accounts - why bother? They just raise cash and spend it. Well the first part is what they claim.

Correction

It seems we may have been a bit fast to judge JIVR. We asked the company to explain all the things below and he said - 

Sales are going very well - no figures.
Accounts are very complicated due to various subsidies which he wouldnt name. They are late but so what.
The monies raised in 2016 was a mix of equity and notes - notes dont appear at CH until or if they are converted into equity or accounted for as debt in the annual accounts - which are te ones that are 5 months late. 

Who knows but the accounts when filed may give us a better clue. We think trying to raise £2m without them will be hard. 


The Jivr bike needs cash. Anyone reading this blog will know that. But wouldn't you think that a company trying to raise £2m in the private sector, would file accounts. Their accounts were due January 2017. Their filing record reads like the South Eastern Trains records - late late late.

In a new pitch deck dated 2017, the company claims to have raised over £1m last year, in two tranches. But this money isnt filed at CH. Could that be the reason for the accounts being sidelined?

JAM raised £160k on Crowdcube in 2014 and have struggled ever since. The directors' revolving office door has been spinning to The Swing. 

The new PD is littered with glossy pictures and quotes taken completely out of context. Substance almost zero. It's a neat enough design idea and has been generally well received but this looks very much like a case of the inventor turned CEO making a mess of things. 

Maybe go back to the Waltz lessons before you get into the Electric Jive. 

Tuesday, 20 June 2017

Another Crowdcube business abandons ship.





AngelBerry Frozen Yogurt raised £200k on Crowdcube in 2014. Now their website is closed and has been for sometime. Accounts were filed late but now they are, they show a company way past the edge. Insolvent is the technical term and this is the second filing showing this. 

The company was due to be making profits of £1.7m in 2016; instead they made a £10k loss. Predcitable? Oh yes, this is Crowdcube, whose own accounts show a £5m plus loss against a predicted £1m plus profit. 

Two tweets since Sept 2016. Only 695 followers. 

Meanwhile no doubt, the successful entrepreneurs portrayed in their Crowdcube pitch have moved onto other ventures. Ryan Pasco, one of the founders, has set up 2 businesses since Angel Berry funded on CC - neither looking good. He is sometimes British and sometimes Australian in the CH filings. His mate James Taylor hasnt been so active - maybe he was actually trying to make Angelberry work?

The business was supposed to be sold this year for over £14m - their figures in the Crowdcube pitch.

Right from the start in 2014, all projections have been way off target.  

As we keep saying - this is just the tip of the iceberg when it comes to companies that have not closed officially but have died.

We wrote about them before here   - it was a death foretold. 

Monday, 19 June 2017

Crowdcube success Onelane turns out to be a dead end


Onelane raised £280k on Crowdcube for its service of delivering children to their destinations. Little over a year later they are closing down as they were unable to raise the £1m they declared they needed this year.


So when a pitch on Crowdcube or any platform says it needs to raise £1m next year or the year after, it is worth asking them how they will do this. Or you end up where investors in Oneland are now - a dead end.

In the letter sent around to all shareholders, Camron, the founder, makes a good job of explaining what went wrong. But when you peel away all the pith, it all comes down to crass mismanagement and huge imaginations. If the idea had any legs they would have found investment, they didnt even try the usual Crowdcube trick of upping the valuation and having another CC round. According to Camron they were on target but no one would listen.

For a guy who claims to have an MBA and some connection to Harvard, oh and was instrumental in the role out of Just Eat in the UK, he sure wasnt much good at getting down and dirty when things got a little choppy.

We asked him what he had paid himself and why the investors hadnt been more pliable. No answer. One clue might have been the fact that of the 12 questions on the original Crowdcube pitch , he only bothered to answer 6 and he avoided giving any detail to one that was specifically asked about how he intended to go about raising this £1m.

He claims excellent traction but the current 176 Twitter followers and 600 odd FB likes seems to throw this into doubt?

In his last email he says -

It particuarly pains me that you entrusted us with your investment and I failed to provide you with a return. It is important to point out that you backed a service that worked really well, had tons of innovations in the pipeline, and was on its way to improve the routine for thousands of parents. With further funding, there is no doubt that we would have been a great success

Apart from the obvious lack of attention to detail, this is complete nonsense and is most likely the main reason the business failed. 

That pretty well says all you need to know. But they still invested. None of this will change until investors vote with their feet.

PS
Following posting this piece, we had an email from Camron - rather irate(vaguely threatening legal action through CC), with the usual spelling mistakes etc and no answers to any of our Q's except the one on salaries. He states that he paid himself nothing in year 1 and was paying himself below market rate in the final year ie now. Well call me old fashioned but in my day start ups didnt pay founders salaries until they were in profit - living expenses yes. We live in an instant world today where Crowdcube thrive and poor entrepreneurs take people's cash and pay themselves off the back of running their company into the ground. Great idea.

Wednesday, 14 June 2017

E-Car Club running on empty?



E-Car Club sold out to Europcar in 2015. Accounts for 2016 show revenues are down and losses are up. Of course nothing for Crowdcube investors to worry about as they are already cashed up. Still thought it was an interesting outcome for CC's first ever exit.