Friday, 3 July 2015
How often can this happen - really??
Earwig raised money on Crowdcube in 2014. The projections used showed no indication of any further raises - growth was purely organic.
When sales fail to materialise as too often happens with Crowdcube pitches - the cash runs out. You can only cut overheads so much before the company stops operating - sales and cash are key. Its the commonest reason for early stage companies closing. That is the case here - turnover was under a tenth of the one predicted for 2014 and 2015 was supposed to see an 8X uplift on the 2014 projection; which we can only assume has not materialised. Costs were cut and the overall loss was in fact smaller than projected but the cash has run out. The now ex Director talked on the forum of a 20X return for investors in 5 years.
So how is that Earwig are now claiming this is their 2nd tranche as if this was planned? No mention of the massive sales shortfall - only very optimistic future sales promises.
And the valuation on the company has in the space of 14 not very successful months almost doubled. Still people - presumably those already tied in - have piled in. You really couldnt make it up.
This may well be a great product and its run by people who know their market - so why let Crowdcube make you look so foolish? Tell the truth please. For a start why not tell us why the real founder has recently left the company along with his brother?