Wednesday, 17 January 2018

Rushmore results give little clue as to what they are up to.

The Rushmore Group was suppose to run a chain of night clubs. Seven years after taking £2m of Crowdcube investors we are still waiting.

We have written about them here.

Their latest accounts just filed, show all of their assets sitting as debtors - most of this figure being amounts owed by group undertakings. Over £2m is accounted for here.

Of course if Group undertakings dont repay this debt, then the money is gone as is the company. 

We couldnt find any group undertakings and like the night clubs it all seems a bit of a mystery. 

Crowdcube embarrass us all with their latest update.

Crowdcube's new headline figure of £130m is the amount of money that people might have invested on their platform. Not what they actually invested.

Crowdcube's latest PRing fest takes the use of fake news down into the swamp. £130m invested in companies using the Crowdcube platform are the headlines. It is simply not true.

Well that all depends what you mean by the word 'invested'. We would have said that was pretty obvious but Crowdcube have reinvented its meaning. When they use it, it means 'pledged' for a short time. In our book the two are a long way apart unless you wish to purposefully mislead. Something that would clearly not be acceptable on a FCA regulated platform. 

The real amount invested or in other words, the real amount that pitching companies took away with them to use in their businesses was (according to a not headline figure from Crowdcube) only £90m. This £90m was only up by 10% on 2016, whereas the headline figure of £130m was up by 19%. You can see why they do it. 

So what is this £130m? Well it's the same as say Carillion issuing a statement (a bit late now) stating that their total revenues were XXXXm, for us only to find out that this figure represents the total amount of business they pitched for. Only 75% was in fact real income generating business. Crowdcube have added up all of the money pledged on all of their pitches - successful or not. To look at it another way, we know we are right as Crowdcube's revenues from their successful pitches were only £4m and that did not come via £130m invested. On what is now a commission of 7%, this 4.4% for the last year seems an extremely poor return.

It is highly misleading and idiots in the press like Crowdfund Insider just lap it up. Sadly it proves that despite all the claims and the new CEO, Crowdcube are still embellishing the facts and using whatever it takes to make money and mislead.

The only good news for Crowdcube investors here is that the figures for 2017 were marginally better than 2016 and that the company will only have lost another £4m - unless they have let the costs slip. After all their PRing, it has not been the year they promised 12 months ago. But they are still open for business unlike so many of the companies that have funded via them. 

Monday, 15 January 2018

Good news for Tandem

Tandem Money (ex Bank) has regained its banking licence by buying up the Harrods Bank.

Tandem Bank raised £2.34m on Seedrs in 2016 - alongside £22m million from an investor network. Unfortunately last year the company lost its banking licence when the deal they thought they had with House of Fraser fell through. Then they removed the word bank from their title and replaced it with money.

So now that they own a loss making bank, what's up? 

Progress apparently. Well, we will just have to wait and see.

Sunday, 14 January 2018

Odyssey Airlines - A Journey To Nowhere

Odyssey Airlines is a one off. It is a company that has raised millions, including one of them on Crowdcube, only never to take off. The highest anyone at the company ever goes is to their 4th floor office.

The latest accounts, out a week ago, show that the company has increased its losses by over £1m to £4.8m, has no real idea when it might fly and has to repay a debt of over £2.5m in March this year. The bank account was empty and the net current liabilities stood at minus £2.7m at YE. As far as we can tell money raised since is a drop in a large ocean.

In the same statement the company claim to be a going concern. Going nowhere perhaps. As their name suggests, they are more myth than matter.

We sent them an email a year ago but have never had a reply.

We were contacted by a shareholder who bought into their PR on Crowdcube. He has not had any communication from them in over a year. He knows nothing about what they are trying to do and suspects they dont either. Crowdcube have been useless at bridging the gap. They simply dont care - commission has been paid, sought it out yourself.

It is the usual Crowdcube serving of ridiculously ambitious plans, covered in PR gravy with lashings of bullshit on the side. Followed by a pudding of total mystery, served with the lights off. It leaves a long, lingering, foul taste in the mouth.

Comments from our egocentric would be pilots, always welcomed. 

Saturday, 13 January 2018

MyGravity sold to Loyalty Angels but nothing about it on Crowdcube

In a highly significant move, one of Crowdcube's recently successful pitches has been sold to Loyalty Angels. A fact we missed back in the Spring of 2017.

The odd thing here is that we can find no mention of this momentous exit anywhere apart from on MyGravity's Chairman's Linkedin page where he states - 

Last Friday Loyalty Angles Ltd completed on the acquisition of MyGravity Ltd - of which I was Chairman, which owns a Loyalty App called My360. This is a great deal for both companies and we achieved an excellent valuation for MyGravity's shareholders. Congratulations to all involved and good luck to the combined company. 

We have taken a hard look for the anticipated PR that a 'excellent valuation' for Crowdcube investors would generate. But there is nothing. Not one piece. That's why we missed it. Recent accounts filed this month show the company made further losses, had failed to raise the money that they predicted and were as at March 2017, insolvent. This was just weeks after the company changed hands. The only reason we know this is because the last confirmation statement shows all shares have been transferred to Loyalty Angels.

Greg Gormley seems to have been the man behind the move. He is the single largest shareholder in LA and was made a director of Mygravity in February 2017.

For some light relief, the last Confirmation Statement for LA states that A Shareholders get 'One Vole per share ' which will give Mr Gormley 340,000 voles. And I thought Bitcoin was a little risky.

We asked the ex Chairman to comment - we'll let you know what he says. Maybe something from Jeremy, at Tales of the Riverbank would be appropriate. 

Thursday, 11 January 2018

Despite what we said, Brewdog slams through its £10m in under 100 days

In what looks like a surprising result, Brewdog will now easily get to its minimum target of £10m raised in the final 4 days of the BFP5 campaign.

We say surprising as for the best part of 70 days of this 100 day campaign, it looked less and less likely that the Dogs would get over £8m, let alone £10m. 

Back in October 17, there was a good steady stream of investment up around the £100k per day level. Then around the middle of November it started to slowdown and by December it was nearer to £50k than £100k per day or around half the required rate. So from 20 December, the amount still to be invested was £2.9m - around £110k per day. But the daily input was stubbornly stuck at around £50k. 

By the 5 January Brewdog still required £1.8m in just just 11 days, with the trend heading the other way. But those boys just dont ever give up and since, they have raised all but £400k of that amount, with the last two days seeing £750k coming in.

This is certainly not a pattern we have seen before in any ECF campaign in 6 years. Yesterday for example saw 536 investors when the average per day has been just over 200. This campaign is run by Brewdog, not an independent platform. So how they have turned this around we will never know but it is some achievement.

Hats Off.  

Rumour is Hopstuff is looking at a listing and selling off some assets for a new project; as well as a new raise.

Ambition is a wonderful thing - in the right hands. Leave the nest too early and you will likely end up dead. 

We have written a few pieces on Hopstuff, it has to date been a success - an almost unique situation for a Crowdcube funded business. But now we hear that the founder has asked for advice on a listing in the next 12-18 months and raising some cash against assets - for a new project.

Hopstuff doesnt make money in the real world - its projections do. Its current valuation of £14m is based on what might happen next. We think there is a good chance that the required happenings may come about but only if they concentrate on getting there....not something else. The company is talking about a new raise early this year - as well as the news on a listing and asset sale. Profits are projected  - they always are. 

Their plans are already very ambitious - and have taken a slight fork. They are now due to be opening bars (taprooms they call them) in number, even though the original two have not yet been truly tested. We did suggest to him that he might want to rein in the ambitions a little and consolidate but like most entrepreneurs he knows best. He still thinks his comparison to Brewdog is a valid one. 

So why the headlong rush? Is it a Millennial thing?

We dont know. But we do know that the reason that many successful early stage businesses go bust is because they over trade. They over extend their risk based on false, often untested assumptions. He must have his reasons.

Now is not the time for new projects or enquiring about future listings. Now is the time to deliver on your last set of projections and for ensuring as far as possible that plans for new openings work. It's like they havent learnt a thing from the delay in opening the new brewhouse and the lease issue with the Taproom - things never go to plan. 

How many businesses have we commented on that have had similar ambitions that have failed miserably. Taylor St Baristas, River Cottage, Rushmore Group, Ethos Global, One Rebel, Hen Restaurants, Pizza Rossa, Chilango etc etc have all promised and tried to expand via new openings and all have failed - some with dire consequences. We cannot list one that has succeeded to date, apart from The Dirt Factory, who 2 years after funding have still not opened their first unit. Getting it right is not easy and for sure out of 5 new units, one at least will end up a dog for reasons that are perhaps not even apparent now. Well that's our experience from 30 years opening new units of various kinds.

The hazards are many  - all untested by Hopstuff. The rewards enticing. 

This will of course fall on deaf ears. But just so we can say told you so. Alternatively you the investors might want to drop him a line. And of course, if we are wrong, then much humble pie and hat eating will be on the menu. Our record speaks for itself.