Pizza Rossa funded on Crowdcube in 2014 and 2015 - a total of £600k. Its big claim to fame was its London Business School Entrepreneur Business Plan of the Year Award.
The specialist square pizza fast food 'chain' filed accounts this month for YE November 2015 - showing a loss of over £300k and leaving the company in the red with accumulated losses so far of more than £630k.
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The guy behind the pizza is an Italian, Corrado Accardi, who was on a MBA course at LBS, when he stumbled on a great idea - build a chain of pizza joints. Funding? No problem, with the emergence of the new equity crowdfunding platform Crowdcube. By using an award won at LBS for this stunningly original business plan and his entrepreneurial flair, Pizza Rossa was able to massively overfund on Crowdcube. See here for the LBS trumpet blast that accompanied their success.
The business won Crowdcube's Entrepreneur of the Year or some such tin can and was away. A little while latter all the wheels had come off. Plans to have opened 5 units by now and be in the realms of £300k plus profits, have been well burnt. They have 1 unit open as we write and are producing enormous losses with it. 'The Latest News' section of their website has not been updated for a year. As chains go, its on the small side.
We have written several pieces about them here
Their arrogance and stupidity are in equal measure. In the original LBS 'award winning' plan they had Saturdays as City trading days. Even though it was pointed out at the time on the Crowdcube forum by us and another helper, that Saturday in the City was not a great place to sell pizza, they ignored the advice. The response was, well we won the LBS annual award so we must know what we are doing. Then once all the money had been wasted, they admitted that Saturdays in the City were not strong trading days for pizza - in fact they had the cheek to blame their awful performance on this! They did open a second site but it was closed within a year.
All in all, we think that this has been one of Crowdcube's biggest ever calamities. Based as it was on the very shiny medal issued by LBS - see this video if you want to have a laugh here. This guy is just taking the P. He hasnt a clue what he is doing and nor do LBS from this evidence.
So can we learn anything from Pizza Rossa? LBS shouldn't get involved in enterprise and certainly shouldnt allow their brand to be used so blatantly for such a farce. And simply do not believe what they tell you. We were warning about this outfit from the get go - it was clear the guy had no idea.
The final joke is that in 2015 Crowdcube raise, the valuation for Pizza Rossa had gone up 2.5 times - so that should make all shareholders feel so much better! Che disordine.
When the original raise was going ahead I was in the middle of a very tough 4 year stint running a central London café. I made every mistake possible and I offered some very honest real advice and he shot me down completely. What would I know after all.
ReplyDeleteWhat the hell does a snazzy business plan mean in regards to running a restaurant? His BP was complete crap and I pulled it apart for him to realise where he may need to tweak a few things plus some things to absolutely avoid. Not surprised at all. The thing is it was not a bad concept at all, nice product, great margins and he blew it along with the crowds money. No sympathy what so ever.
He must be feeling a right twat now he is washing the dishes in one outlet chain!
Delete@ Michael Gallagher. I was in an almost identical situation. I have bit my lip quite a lot in fact at these 'entrepreneurs'.
DeleteEverything ignored. Useful private contacts skimmed over, then carelessly passed on to third parties.
Arrogance and stupidity- perfectly put.
I was chatting with an ex director of a Crowdcube funded company who proceeded to slag off one of his fellow board directors (who just so happened to be Robin Klein- quite accomplished in the business world).
DeleteWhen I thought about it, I was like ok Houston we definitely have a problem..... the guy bestowing his wisdom upon me had been a failed lawyer or accountant (can't recall which) but had not actually 'worked' ever...
I did try to see things from his perspective, as he proceeded to 'advise' me, but I honestly didn't think there'd be room for both of us up there.
The arrogance thing is a recurring theme and is particularly ugly.
Rob you've hit the nail on the head. Brilliant. Thankfully their arrogance is fairly rewarded eventually. Small mercies!
ReplyDeleteTake this guy, he's in a single unit flogging pizzas at a loss for example, or (our experience) the AWFUL ex CEO of JustPark, happiest with a mirror in front of him, unable to listen to anyone with real knowledge, and based on no experience at all deciding on a "spend, spend, spend" policy).
Where does their arrogance get them?
Today one is no better then a village chippy (worse in fact) and the other is out on his ass and slowly contemplating the reality that his career has peaked.
Tragic.