Sunday, 29 November 2015

Come on please dont insult our intelligence

This is Steven Segal - one time action hero, SEAL and cook. It's not what he looks like today, which is part of our point.

A new Crowdcube pitch is being sold with what can only be described as information sieve syndrome. It has more holes than facts.

The Founder of Po Zu is Steven Segal - no not the cook, the shoemaker. They make ethical shoes and have done so since 2002 or thereabouts.

This business may well be one that could make it - but not the way it has been laid out by Crowdcube.

For starters we are not given any historical financials. We are told that the new company Po Zu owns two subsiduaries, Po Zu Online and Fishwalk - both of them due to file accounts by end Dec2015 or in a months time. Why then are they not filed already? They must be hiding something. Fishwalk is insolvent and has a long term debt of £52k for YE March 2014. This debt appears to be cleared in the new holding company.

From previous years accounts both subsidiaries are loss making or just BE. Turnover appears tiny, assets almost zero.  This may well be down to lack of marketing as the pitch explains. Turnover appears to be around the £100k mark, with projections of £350k for 2016 and then £1.6m 2017 etc etc.

The pitch claims that the founders have invested £20k in share capital but this is not in the financial statements. They are raising £150k now and this is the total share capital on the financial projections.

The brand name Po Zu is owned by the newco, but Steven has held back another trade name he owns, only licensing it to the newco.

All of the above is bad enough but then we get to the valuation. Oh Lord the valuation.

Steven has outdone himself proud here. Using the DCF method - with no historic data relevant to the turnover projected, they have come up with just under £1m - now. Its sheer genius.

Crowdcube posted this pitch so must have checked it. Their standards are slipping below the watermark. We need the real Steven to break down the doors and kung fu the lot of them.


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