Monday, 30 May 2016

Upper Street does Equity Crowdfunding no favours


A recent article in The Times  - http://www.thetimes.co.uk/article/shoemaker-was-on-last-legs-but-crowdfund-investors-were-in-dark-3z5tn9zfz which we helped piece together, follows a number of posts we have here on this company.


It seems wholly unbelievable that Seedrs knew the real situation when they allowed the second pitch. The CEO of Upper Street, Julia Elliot Brown,  has a proven track record of being less than straight with her facts. Evidenced very clearly by her selfie as a successful business woman who now helps other companies go bust. How she can claim that she successfully exited Upper Street is incredible.

What we actually said to the Times was '' 'It seems pretty clear that when Upper Street came back for a second time, the company was in considerable financial difficulty. This is certainly not how the pitch portrayed it. The company was valued at £3.2m in October 2015 but by halfway through this month the company was to be worth just £12k. That anomaly is difficult to understand. Investors and indeed Seedrs might well ask why they were not told of the company's real situation.'' 

The important difference is that The Times left out the reference to Seedrs not being fully up to speed on what was happening.

Equity Crowdfunding needs a few changes, one of which is recommended at the end of the article. But this is not a major change and will not really make much difference. It's playing around on the margins

What we really need is a system whereby companies wanting to use ECF have to have audited accounts for the previous year including a full P&L and then must use full accounts reporting, for 3 years after they have raised their money. 

In the case of Upper Street this would have helped prevent this mess. 

Platforms must also be held liable for this type of failure - where there is very clear evidence that the pitch, for whatever reason, did not reflect the true state of affairs.

Seedrs is one of the better platforms so this is a very disappointing outcome. You would expect and indeed do constantly find this type of situation with Crowdcube pitches but not on Seedrs. 

4 comments:

  1. Hello Rob, I would just like to clarify something. RE: "The Times left out the reference to Seedrs not being fully up to speed on what was happening."

    I left this out of the article simply as I have no evidence that this is the case. I spoke to both Seedrs and Julia Elliott Brown, the founder of Upper Street, and neither of them suggested that Seedrs was not "fully up to speed on what was happening". Seedrs position was not that it did not know about the parlous financial position of the company, simply that
    it saw "nothing unusual" in Upper Street having no cash. Indeed Seedrs,says it still does not accept that the company had financial problems when the pitch was arranged (despite it collapsing weeks later / the insolvency firm coming in the following month).
    Thanks
    James Hurley, The Times

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  2. Hi Rob and thank you for your articles. They have provided me some valid information and insight with the challange I have had a year now with the case: Upper Street.

    Actually I find this whole situation pretty interesting. Just to let you know that the management team of Upper Street was hiring new associates/employees around the same time they applied for liquidation... they knew about the sinking ship.

    It took me some time to understand what exactly happened in the last months of 2015. The management team of course knew about the situation but said nothing when they signed the papers with me. I didn't have a clue about the companys finacial state since I was persuaded to understand that Upper Street was growing and the plans where to become even globally known.

    I used my time, name and resources to promote Upper Street. Attended a fashion exhibition, worked my ass off, used all the money I had (well and more), went to meet people; potential business partners, bloggers and customers to create a network. Then just suddenly out of the bloom 'bang' my upperstreet.com -email was not working and when I asked about it my supervisor said she had the same thing and "didn't know what was wrong" and the next day Í was informed that the company had been sold to a new owner.

    For now I haven't received anything from the highlighted great opportunity but have tried to contact Julia and all the rest but it seems that they don't want to take any responsibility.

    The management team broke the law just by withelding vital information from me and anyone who lost their money after summer 2015 without knowing the true situation.

    Is there anyone who would still like to bring the case in to justice? There is a way. There is black on white.

    Br,
    Maindo Andem
    Finland

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  3. Hi Maindo - if you would like to talk further about this please contact us rob@ecfsolutions.co.uk. Julia has been touting herself around London as some business guru with experience of raising money using equity crowdfunding and she really needs to be stopped before she does too much damage!

    ReplyDelete
  4. Hi Rob and thank you,

    I'll contact you after I have discuss with my solicitors.

    Br,
    Maindo

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