Saturday, 28 November 2015

So what did happen to the Rushmore Group and £1.5m raised on Crowdcube

Its funny how the same people continue to crop up in the ECf world.

The Rushmore Group funded via Crowdcube in 2011/12/13. Its owned by John Downey.

They raised what was then a record £1m on the platform, followed by another £500k. They promised to use the money to open a new establishment in Soho, which would replace the burnt out East Room club, bringing the Group back into profit. The club in Soho was the Century club, named for its steps leading up from Shaftesbury Avenue.

Since then, John Downey's plans have gone a little bit off track.

Sure the Century club is up and running but not with the Rushmore Group - who now only have 2 London clubs. They closed Giant Robot Clerkenwell last year.  Accounts filed for YE Dec 2014 show continued losses, now accumulated to £1.75m.

Apparently the Group is suing the  former MD of The Century Club for £6m as the deal, agreed according to the Crowdcube out to lunch department, fell through. He seems to think he will get the £6m.

According to this article the Group were due to open 3 new members clubs in 2014. They didnt manage one.

So what has John Downey been up to?

It would seem that he has got bored of Rushmore and its 300 investors and is now full time with a new project, London Union. You could say that the Rushmore experience has taught him a few things. He is now raising £3m for his new project on Seedrs, another ECf platform. The pitch closes today, over its threshold figure of £1m and with 102 investors. We assume not many of them from the Rushmore experience.

Interestingly none of this is mentioned in the Seedrs pitch. In fact the bio for Downey doesnt ever mention Rushmore, only referring to one of its two remaining clubs.

This is not untypical of the outcomes that have befallen businesses funded via Crowdcube in 2012/13 and we can assume it will continue to be so. Investors have no control over either business or the management - they do as they please. Mind the wreck on your way out.

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