Monday, 7 March 2016

Renovagen now versus Renovagen in 2014 - fudging the valuation.

Renovagen are back on Crowdcube raising £600k at a company value of £3m

They raised £220k in late 2014 at a value of £1.5m. So happy Corwdcube investors have yet again made a small fortune.

Here is a direct comparison between what they predicted in 2014 and what they are predicting now. The blue figures are the new actuals (2015) and projections in the live pitch.

2015              Turnover £900,000      EBITDA    -£  34,000  
2015 MkII     Turnover £  85,000      EBITDA     -£137,000     

2016              Turnover £4.5m           EBITDA     £454,000
2016 MkII     Turnover £1.48m         EBITDA      £155,000

2017              Turnover £15m            EBITDA     £1.34m
2017 MkII     Turnover £9.95m         EBITDA      £ 852,000

2018              Turnover £42m            EBITDA     £4.93m
2018 MkII     Turnover £25m            EBITDA      £1.73m

So a company expected to be making only 35% of the EBITDA in the 2014 projections, is now worth twice as much as it was then. How is that possible? Well quite simply it is only possible because all of these figure are complete and utter fantasy  - they are meaningless. If they had any meaning a company halving its projections, would logically have to be worth less than it was before.

Of course you will not get this comparison anywhere else but here, certainly not on Crowdcube's site. This is happening time and time again. We are not saying that Renovagen are a poor investment or that they might not go on to be very successful. The point is the platform is clearly misleading people by fudging the valuations. As clear as night follows day.

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