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Wednesday 10 July 2019

ECF.Buzz is launching on 10th July 2019 - things will never be the same again!

10th July - the very same day Lady Godiva, The Countess of Mercia, rode naked through the streets of Coventry. That is the date for the launch of our new Equity Crowdfunding site ECF.Buzz. 

The two are not necessarily related. However as with Godiva, we are attempting to break the status quo and improve what is a hapless situation. Luckily for everyone, Im keeping my clothes on. And whereas her story is myth, ours is for real. 

This blog will be moving - to the new site. At ECF.Buzz everyone will have free access to the latest  blog posts but the archive will be kept for members. That along with the host of other great facilities we are offering - all of which are aimed at helping investors make better, more informed decisions. In this way we hope to improve the level of businesses being funded and eventually force the platforms to improve the offers they present. All round, this will improve Equity Crowdfunding. 

And from what we are being told, this is long overdue. It is time for Investors to take back control. 

Reasons to join Our Crowd

  • Independent Forum for knowledge transfer without interference from the platforms.
  • Huge knowledge resource on all things to do with investing in start ups.
  • Experts opinions and articles.
  • Company Tracker - our very own record of 1300 ECF funded companies 
  • Buzz Rating - our bespoke, handmade, analysis of funded pitches and how they are doing. 
  • MyTracker - get your very own personal service to help you keep tabs on your investments
  • The now almost famous Blog
  • Latest News on the sector.
  • ROI & RIP - definitive lists of companies that have made a return for investors and those that have failed. This will be accurate - unlike data on say Crunchbase, which is almost all faulty.  
So what do you say -  lets all get our kit off and celebrate the 10th July 2019. 
Go Diva!! Go Buzz!!

Saturday 6 July 2019

Another Crowdcube Zombie calls it a day - Workabode liquidates after raising twice on the FCA regulated platform

Founder Trevor O'Hara is a cracker - he's from Ireland. This is not a story of a near miss or bad luck. It's not even a joke. No, this is a story about nonsense, about promoting £21m of net profit, rising to £35m next year and delivering liquidation. It is not a story anyone would wish to see repeated. 

Trevor sent his shareholders a short communique stating that for reasons outside of his control he had to close the business. In plain English - I have spent all the money and now the bank account is dry, it's time to go and do something else. Nowhere in this pathetic excuse of an email does he attempt to apologies or recognise his own failure. 

He used Crowdcube twice to raise a total of £380k in 2014 and 2015. The business has been in the waiting room ever since. Meanwhile, Trevor has been evangelising about how to make great businesses. 

He is under the allusion that the way you scrap a UK business  - one registered at CH - is by creating an official looking document in Word and heading it - Notice of Company Dissolution. You then include phrases like  - ' Notice is hereby Given .........' and that is that. Trevor, that may be the Irish way but it wont work here. Shareholders would be advised to act now to see if there is any money they can get back from Trevor. Or indeed from Crowdcube if the pitch was in anyway misleading - £35m net profits!! ECF.Buzz has advice on all of this. Investors need to take back control.  

We wrote about this nonsense before here - he threatened to come after us! Looks like we were right - or more correctly, he was certainly wrong. You get them and they are best avoided. Now he is logged in, all ECF Buzz members can do that. Our Buzz Rating for this one has been spot on - Zombie waiting to go down. Goodbye and please dont come back.  

Friday 5 July 2019

BeerBods sells out to ABV

Beerbods raised a total of £400k on Crowdcube in two rounds. Now Matt Lane has sold the business to Beer Hawk, recently acquired by ABV incubator ZX Ventures. 

This is exactly the sort of transaction that will make equity crowdfunding work; if it gives investors in BeerBods a return. Lane admits that the sale is forced - ie it's the only option if the company wants to make any immediate headway.

No figures have been disclosed although shareholders will know shortly. In the first round Beerbods was valued at around £400k and then a year later at £2.5m post money. So looks like the 101 first rounders will see a healthy uplift. Not so sure about the others. Accounts show a loss for the year to May18 of £80k.

Lets us know if you know.

Monday 1 July 2019

A Suit that Fits now doesnt. Liquidation beckons.

After a somewhat bizarre failed rescue attempt, DKSG Bespoke, ASTF's and any other associated companies are heading for the chopper. 

Crowdcube investors who were asked to find £50k to support a new attempt to buy out the on line tailor, appear to have chosen not to. In the circumstances, a wise choice. No doubt the administration/liquidation will shed some light on the very odd goings on. 


The following day - Resurrection? 

We have now seen a new email sent to investors from the Indian side of this saga - Rohinton Mistry's A Fine Balance has fewer threads. He claims that he is the good guy and that he will deliver an end result for investors - but with no return for himself. Pretty much what the other guy promised. Remind you of any lies over our current undeliverable quagmire? It was ever thus. 

Sunday 30 June 2019

Hapless HAB Housing leave shareholders in the dark

In yet another example of the investor power vacuum, HAB Housing Ltd have filed yet more heavy losses whilst associated companies play swinging doors and restructuring games.  

HAB took £1.8m off Crowdcube investors in 2013 and then another £2m of Crowdbnk investors via a Bond in 2017. Results have so far been on the disappointing side and the GAP between the £8m predicted profit for 2018 and £1m loss is substantial. 

What is more worrying for investors is the silence that has accompanied this. Shareholders we have spoken to say they have been told nothing or very little. HAB Land, an SPV used to purchase land and the company the Bond is in, have now handed over 75% plus control to Bah Restructuring Ltd. McLeaod the TV star who headed up this HAB Crowdfunding share sale has resigned from both HAB Land and HAB Financing plc - as have many other directors. Whilst the building works may not have been busy, the swinging doors certainly have been. 

For a Group that told investors in 2017 that they planned to be building 500 new houses a year by 2020, they seem to have been a little optimistic - or is that misleading? This appeared on  https://www.codeinvesting.com/raising-finance-for-smes-hab-land-interview/

Friday 28 June 2019

A Suit that Fits enters the realms of fantasies and nightmares.

Simply - it doesnt. Never has done and never will. ASTF funded on Crowdcube and Envestors. Went bust, was exhumed and now sits on the edge of the hole about to slip back in. Meanwhile it appears investors may well have lost more cash. 

This isnt a case of a poor idea or even a good one poorly executed - although execution has not been great. This is about a team who will, by looks of things, end up wanting to kill each other. A team made up of various cultures where it also appears these cultures and their differing attitudes, may have clashed. The story has more twists than a bowline.

We have written about ASTF many times - here - we may make it into a book.

Enough from us  - below is the latest mini saga  - for a read when on a boring train journey.

Since this went out, another desperate email has gone out to SHs asking for more cash.  

Good afternoon.

I am afraid to say that your help is needed, please read on.

Following the recent raise to buy out David Hathiramani and Keith Watson I would like to provide you with a candid timeline of events and the current critical position of the business.

A total of £203,000 was pledged from our investor network, however only £160,000 was actually transferred post raise.

Adjustments were made to budgets and I had every confidence with your support I could drive the business forward and deliver on the objectives outlined.

The day following the raise, David's discontentment was evident at the buy out fee achieved against the amount pledged. A series of challenging text messages were sent to me demanding more money then was communicated to our investor network,with spurious claims of historical money being owed for services rendered, only communicated once the round had closed. I held firm and committed no more then what was agreed. I believe that David's discontentment continued to put significant strain on our relationship to this very day.

During the raise I was lead to believe that the official and legal side of the buy out would take around a month, at which point David and Keith would exit and share certificates would be issued, the new board formed and a fresh start ready for all. To this date the buy out is still not complete, following taking on the role of leading the company there was little to no handover and David and Keith hold all historical investment and financial records which have not been handed to our solicitor in a timely way. It was decided that David would oversee the transaction until today when I intervened challenging why some 5 months later there has been little to no progress. I quote a part of the response here "Part of the delay issue has been due to not receiving coordinated instructions or full  responses to the various emails I have sent".

I have now arranged a call for tomorrow with our largest investor and the solicitor where I aim to understand how this process may be expedited.

The funds raised went to the company you initially invested in, DKSG Bespoke Ltd which owns the ASTF brand, and leases this to Tailored Franchises Ltd whose ownership structure replicates that of DKSG.

This is a company I am a co-Director of, holding a bank account with Lloyds Bank. I have had no access to this account or until recently up to date statements which were assured weekly, the account has essentially been held to ransom by my co-Director and the only person with access to it Keith Watson. I still await a statement for June to have full visibility on the outgoings and an understanding of the true current balance despite requesting it one week ago today.

On inspection of historical statements I see David has paid himself £17,700 in recent months, a figure I am yet to receive any justification for and was not agreed with me, his co-Director.

The impact on the business as a result of this has been significant. £50,000 of the amount raised was intended to fulfil the outstanding orders, as communicated during the raise I was unable to take any new orders until we made a start in completing the historical ones, as such we have not taken a single new order this year and funds raised have been used to sustain the business in the hope the buy out would complete, we could make old orders, take new ones and commence trading again using every penny for the purposes communicated.

The constant stalling with the buy out has been detrimental to the business to the point where Tailored Franchises Ltd has zero cash is unable to make business critical payments to suppliers or staff payroll this week.

My understanding is there is around £25K remaining in the DKSG account which would cover these expenses, however David is unwilling to release funds meaning I essentially have to close the trading business immediately unless David relents or I am able to rally support from you, our investors.

In recent months operating costs have continued to drop and if we expedite the buy out and raise a relatively modest amount of cash I believe we still have a business that can essentially flourish, however I am effectively fighting for something that I am not drawing a salary for and have committed not to in the upcoming months.

Short term (as in the next 24 hours) I need to raise £50K to see us through the next month, by which point I would expect us to be self sufficient and be able to commence trading again.

I have looked at institutional lending for which we are not eligible however I believe we would be eligible for a Funding Circle Loan. This is a high interest loan that requires a personal guarantee. I am happy to offer this personal guarantee such is my belief in the business. I am also looking at a personal loan so I can contribute where necessary and claim back when the business is back on its feet.

I appreciate the context of this email is startling, I frankly feel quite startled also and like I have been fighting a losing battle against people presently yielding more power than I. Whilst late in the day felt it appropriate to reach out in an attempt to rally support before it is too late.

I understand there are likely to be many questions, whether I/Tailored Franchises achieve the mission outlined here. I would like to invite you all and openly invite David Hathiramani and Keith Watson to an event on Tuesday 8th July whereby I /we can answer any questions or concerns this email may raise or how the companies persistent failings lead us to this point, in the interim my sole focus must be survival so please forgive any late responses to questions etc.

In exchange for £50,000 raised in the next 24 hours. We offer BOTH 10% equity in both businesses AND complete complete payback of the amount you support with at this stage over 12 months next year - a modest liability to the business of £4,166.66 a month.

You can commit from £500 up to the full £50,000, funds will need to be received by the end of tomorrow.

If you wish to support please just reply to this email and I will come back to you immediately, any other questions please email ..............................(my other account) and I will come back to you when time permits.

I thank you for your time and will send a progress update tomorrow.

Kind regards

Daniel Warwick 

Wednesday 26 June 2019

Kokoon lowers valuation by 20% at the end of their Seedrs round to 'accomodate' a £525k investment from an EIS fund.

We strongly recommend that if you want to be cheered up, you read the Kokoon Kickstarter forum. Now in breaking news, the company has written via Seedrs to existing SHs about an exciting development. 

Hard to know where to start with Kokoon  - makers of the sleep enabling headphones that have given thousands of Kickstarter backers sleepless nights, waiting for delivery. 3 years on, the latest batch of comments (4,997 in total) on their pitch page are hilarious - provided you are not a shareholder. We particularly liked this one - 

I listed mine on Ebay with no reserve! Get a great deal. And yes, I will actually ship them to you quickly.

Now in a final twist to their latest ECF round - they started on Crowdcube and are now on Seedrs - they have told SHs that the valuation of this round - which has been on Seedrs for ages - is coming down by 20% to accommodate a large EIS fund investment. So the Crowd was allowed to be over charged but not the EIS fund? Fills you with confidence and belief in ECF doesnt it. 

Oh and we forgot to mention the main reason for the email was to tell SHs they could now take up their pre emption rights at this new exciting discounted value. Are you that stupid?

On the Seedrs pitch there is no mention of the problems with delivery to over 7500 KS backers, the demands for refunds, the breakages, the product downgrading and software inadequacies. What they do tell punters is that they have pre sold £4.5m worth. How much is owed back in refunds, lost in breakages and not delivered at all after 3 years. Those numbers are not available at this time.  

You do have to ask if Seedrs under Jeff Lynne would have allowed this nonsense.