So here we are - Syndicate Room have raised £2.6m of their £2.3m target. On Syndicate Room.
What are we to make of this?
We have a VC investor putting in £1m and turning around the enhanced due diligence its investment criteria stipulates in just 24 hours - according to the site. Some achievement for both SR and Unicorn AIM VCT's.
For some reason SR are not allowed (again from the site) to publish financial data on their pitch. So questions about profitability go unanswered. You can be sure that SR is not in profit - none of the ECf platforms are.
So a valuation of £25m now must be based on what?
Maybe the new development that they are so keen on - their launch into IPO's. But then the attempts to actually get involved in IPO's to date have been flops. So it cant be that. Must be a belief that they can deliver what so far has been undeliverable - a large ROI.
I like their Salty the Movie pitch best. How long does it take to make a film? Still waiting for news on this one!
220 investors clearly believe they can.
http://www.hollywoodreporter.com/news/cannes-antonio-banderas-play-aging-892340?utm_source=Sailthru&utm_medium=email&utm_campaign=THR%20Breaking%20News_2016-05-10%2021:30:00_HLewis&utm_term=hollywoodreporter_breakingnews
ReplyDeleteI see the situation is rather changed in the last year - looks like the Thai pirates must have got their navigation a little wrong. Looking forward to posting this as the first major success for ECF.
DeleteRe Salty...I believe from the offer document Salty also needed "pre-sales" to complete its finance, deals where international distributors agree to buy the film in advance based on the script, director and acting talent. Those deals are used as collateral for debt to cash-flow production until they deliver the film and the distributors pay.
ReplyDeleteProblem may be is that they chose Carnaby Film Sales as sales agent. Carnaby Film Sales is the off-shoot of Carnaby Films. Carnaby Films used the EIS to raise about £20m from small investors, just before ECF came along. They were all plc companies raising about £2-3m each per film so had to issue detailed accounts with turnover...accounts that show the plcs combined never booked any sales revenue. A 100% loss to all those small investors (and a big bill for the tax payer). This is even though the films did sell, and some like Rise of the Footsoldier did sell very well. I wonder where all that money went..?
Hi Rob,
ReplyDeleteI have been reading your blogs with a lot of interest. Can't say that I agree with all your comments but they make interesting reading nonetheless and it's always important to challenge many parts of ECF - especially some of the absurd valuations out there.
On your post above about Syndicate Room - this point applies I believe. I must first express an interest here - I am a current shareholder in Seedrs, Crowdcube and Syndicate Room (the actual companies). I was interested in topping up my investment in Syndicate Room but I really cannot understand how their valuation as tripled in a year. £25 million....really? Don't get me wrong, I would be very happy for them to succeed for obvious reasons but it seems like valuations are getting out of control.
Out of all of them, only Seedrs recent valuation looks (in my personal opinion) 'only very expensive'. Crowdcube's and Syndicate Rooms valuations do seem off the scale.
I believe one of them will be a winner in the end and will probably provide a decent return, but I also think there will be a causality along the way. Perhaps that's why I'm spreading my bets, as it were.