Friday, 20 October 2017

Are Crowdcube success Atlantic Seaweeds sinking?



We had hoped to bring you good news - but there isnt any. Atlantic Seaweeds took £125k off Crowdcube punters in 2014. Although they are still open, the accounts are not a pretty sight.


We should be looking at profits of over £100k by now according to the Crowdcube pitch - you know, it's the usual story. Accounts show the company as insolvent with little activity, no new money and from what we can see, a difficult future. The year does seem to have produced no further losses but this may just be because it didnt do much. Some new money must have appeared from somewhere to pay of the current creditors.

Nothing new on the blog since January 17.

A bit of a mystery but then that's seaweed for you.

Filmore and Union raise £3.5m from The Business Growth Fund.


Filmore and Union - a northern based chain of health food cafes - has raised a new £3.5m from BGF at what we think is a valuation of just over £6m. It raised over £800k in 2015 on Crowdcube at a valuation of around £5m.


Their accounts are due out in December so we will have to wait and see how they compare to the Crowdcube projections - last year's missed by someway. Revenues for 2017 do seem to be roughly in line with what they stated. The company has certainly been active since taking the Crowdcube money. It has opened 7 new sites, doubling its size and done a deal with John Lewis in Leeds. This might explain the need for cash.

Whilst selling what appears to be around 40% of their company to BGF is in many ways a coup for the company, it is not all good news for Crowdcube shareholders. Firstly they are diluted and secondly this raise was never part of the 2015 plans.  It does ensure the near future however and as we are likely to see some rocky trading for consumer facing outfits in the next 3 years, this can be no bad thing in terms of the business surviving.

BGF have deep pockets. It's too early to see if they are good at picking winners though. They have invested £1.2bn to date in UK start ups and early growth companies. It does not simply invest, it helps the companies grow and can provide further funding - a model we applaud and one that we would hope equity crowdfunding could eventually learn from. So for example instead of making a commission on the raise and then moving on to the next campaign, as happens now, platforms would take more skin in the game and be mentoring these companies. It is a whole different mind set and Crowdcube couldn't manage it. But is there a platform that could?  We think so. 

Thursday, 19 October 2017

Crowdcube's Shamba Technology has no news, no money and no assets.



Shamba Technologies raised £112k on Crowdcube in 2014. From the accounts most of this is now spent and the company has no fixed assets.

It is quite literally an extraordinary business. Its balance sheet suggests it is dormant and has been for some time. The website news section has had no news for over 12 months.

Yet it won a Siemens award in 2016 - small but still an award.

It was supposed to help get electricity to the poor in Africa, using a combination of small time solar powered units and their IOsolar system, which being modular, allowed it to be built in stages as and when it could be afforded. To be fair it is not a bad idea and its for a great cause.

We have no idea what has gone wrong. It was,according to Crowdcube, to be making around £1m profit in 2016 and almost £2m in 2017. In fact it made a small loss on negligible trading. A £400k loan was supposed to be in place for 2016 according to Crowdcube but this has not appeared. The turnover was projected to go from £40k to £1.7m in the twelve months post funding. Clearly that didnt happen either.

We hate to say it but we have been telling you for years that the kind of businesses Crowdcube supports will, in the round, go nowhere.

Wednesday, 18 October 2017

Pavegen fails to light the world with kinetic energy.



Pavegen raised £1.9m on Crowdcube in 2015. Their power generating footfall slabs are excellent at creating PR if little else. Is it just a vanity project for their star actor, CEO and Tom Hiddlestone look a like, Kemball-Cook? 


This is one we saw coming - we are not there yet but shouldnt take much longer. 

Pavegen claims be part of the solution for one of  the world's most pressing crises - energy use.

It was sold on Crowdcube in 2015 as an energy alternative. Or you could say it was over sold.

So to date the tiles have been used in some very high profile locations but as promotions not power generators. The Pavegen team all sing in tune off the same sheet and it sounds great. They are as slick as Hiddlestone's suits and not shy of comparing themselves to Tesla. The product is of the now but does it really help anything?

If you can stand it, watch this Apple launch style video -  http://www.pavegen.com/livestream/ and you will get some idea of the paf. The CEO says as at one stage 'So what do we call this'. We have our own idea. In this display, given to an audience of investors and hangers on, the CEO very proudly announces the first full time commercial installation - a major break through for the company. No ifs, no buts, no maybes. The venue is to be the Westfield Shopping Centre at the old Olympic Park Stratford City, we are told. He goes on about this being one of busiest sites in the world, which it may well be. The problem really is that this installation never took place. Despite the exciting announcement Pavegen never installed a single tile.  It was all nonsense. 

As an investor, we'd be worried about a few other things.

Firstly getting the price down to their stated level - the same price as standard flooring is never going to happen unless we have a critical global flooring shortage. The company has made some headway - the last figures we could find suggested £600 psm. So a long way to go.

The second issue is the power each step generates. Pavegen claim that the new triangular version which can generate off all three corners, produces 200 times more power than its original. That's fine at 5watts per step but it just means the original was nonsense. Can it get better? Well that is the billion dollar Q.

This level of power generation isnt really going to solve anything - its more of a gimmick for PR stunts; which is precisely how it has been used to date. Whats more, watching people walk over a section of them makes you wonder how long it would be before the lawyers would be involved over elderly sprained ankles or worse. The 5mm downward and back up movement cannot be comfortable. 

In any high footfall situation you also have to wonder what happens when litter, grit and general dirt gets down the gaps between tiles and if someone is already on one side but leaving and another person is just treading down - how do the tiles/people respond? None of this has been trialled as they have no high footfall sites that are in long term operation - despite the announcement. Used on pavements, we may find people walking on the roads.

The one thing that Pavegen should be applauded for in all of this is their ability to get people to focus on the crisis. Alternative power is the solution but just not this hype. 

And we almost forgot its new use - as a customer data collection tool. Im sorry but this has to be one of the most expensive ways to collect footfall data ever invented.  

Finally  - the one thing Pavegen have a proven record of, is the generation of large losses when they claimed they would be making large profits. Filed accounts show losses of £1.5m against Crowdcube's figure of a £280k profit for 2016. Dilution a go go; all the usual Crowdcube features apply. 

Mind the gap in more ways than one. 




Scaramouche and Fandango way off Crowdcube targets.



S&F or Galileo Group Ltd, have just filed accounts for YE Dec2016. According to the first HY update for 2016, they were on track for a record year. So what went so wrong?


The HY report that we have seen states that the company is on track to break through its Crowdcube 2016 revenue projection of £2.2m and is aiming for £2.8m. You have to dig a little to get the real figures for Galileo - the word Group in the title does not refer to the accounts. We have found a YE revenue of £2.15m between the Group and Galileo Products. So not close to the anticipated £2.8m. The Crowdcube projected profit of £658k on a £2.2m revenue, is filed as an overall profit of just £60k.

At the end of 2016, Galileo 'bought' the industry leader, Watermark Ltd. Actually they gave them 230k new issue Galileo shares and around £200k for the deal. Watermark had been making losses since 2000 and was technically insolvent by 2016. Restructuring, including a capital injection of over £6m, in 2007 enabled a small profit for two years but then it was back to heavy losses. Formed back in the 1980's to service the then growing corporate gadget market, Watermark had made substantial annual profits and paid juicy dividends. But expansion into the travel accessories market seems to have brought with it problems that were insurmountable. What is the point in having to service low margin contracts (Watermark's own description of its core problem), just to have a multi million pound turnover? If there is a message there it might be -  Drive for show putt for dough. As we keep on pointing out deals with he big boys at low margins are not really for small turnover companies - the impact on the cash and profit line is too severe.

Why the purchase of Watermark took place isn't exactly clear but may become so with another year's accounts. Watermark's 2016 revenues were $14m, down almost $4m on 2015. So there maybe synergies that will give Galileo the leg up it needs and of course a short term windfall may come from the fall in the £/$. Unless of course they bought forward in anticipation of a remain vote, as any sensible business with manufacturing and sales both in dollars would have done. It does give them instant access to some interesting overseas (HK for one) markets and alternative accounting centres.  

Issuing another 230k shares will dilute Crowdcube shareholders as it represents a 20% increase in the issued share capital. But they will be used to that.




A total turnover of only £2.15m for a company claiming to have deals with most the UKs top retailers and some of the world's top airlines seems to be very low to us. Are they giving the stuff away?

It is hard to reconcile such an upbeat shareholder report in 2016 and the accounts filed for the year.  Galileo posted a small overall profit of £60k for 2016, against a £650k projected NP. But more importantly it took out a £250k loan in the year; filed as coming from its shareholders. New updates have apparently not been forthcoming.

Tuesday, 17 October 2017

Please let us help you Crowdfund - you are making so many easily avoided mistakes


Looking at the Crowdcube platform recently, it is obvious many of the pitches have little clue what they are doing. We can help you - for free.


So many of Crowdcube's recent pitches have failed to get even close to 50% completed. 

ECF Solutions, our ECF consultancy, could help you avoid the heartache and waste of time that this involves. You either need to revamp your pitch, look at another platform or choose a totally different route for your financing. 

We will look over your business and your pitch and help you place it on the best possible platform, at the best value to achieve the capital raise you require and in the best possible shape to be a success.

We can do this effectively because - 

- We are totally independent.

- We have 30 years experience in creating SMEs

- We have reviewed over 2,000 ECF pitches

- We have been involved in ECF since 2011, are recognised by the FCA as a genuinely independent information source, work for various platforms on a contract basis and have this blog which is read by around 1000 people a week - many if them investors.

- We have called many of the failures on Crowdcube, before they happened and continue to do so.

Our initial service is free. If we believe that your business is suited to this type of funding, we will then charge you a small upfront fee to put together your campaign and help you through it. If it is not, then we tell you that and try to advise on other avenues.

When you are successful, we then take a prearranged percentage as a fee - so the impact on your cashflow is zero. 

With our help, Crowdcube could have a much higher success rate and far fewer very sad looking campaigns at 10% or 20% completed, by the time they end. It's bad for moral and it's bad for business to fail.

Email us now on info@ecfsolutions.co.uk to have a chat.

Some of the articles featuring us - 

https://www.thetimes.co.uk/article/lone-researcher-spells-out-the-dangers-of-following-the-crowd-jw990k2b5

https://www.bloomberg.com/news/articles/2016-11-07/you-too-can-invest-in-a-startup-likely-to-go-bust

http://www.bikebiz.com/news/read/what-the-hell-happened-at-vulpine/021275

http://www.telegraph.co.uk/finance/businessclub/9251891/Peer-to-peer-website-accused-of-misleading-investors.html

https://ftalphaville.ft.com/2016/04/08/2158704/investors-dont-like-your-company-try-crowdfunding/

Monday, 16 October 2017

Crowdcube, Little Brew, less beer, and the tale of the open company and closed brewery.


Little Brew raised £109k on Crowdcube in 2013. Crowdcube decsribed it as 'Little Brewery with Big Plans'. They were wrong.


This a classic tale of Crowdcube's incompetence. We had this comment from a Little Brew shareholder - 

Little Brew are a disgrace - it's been over 6 months since the founder emailed shareholders saying that he had sold all of their equipment and that the only realistic outcome "may" be to wind up the company. That's more than enough time to either create a plan for the business, or announce a wind up. Instead we have no news, and investors cannot claim tax relief. He says that he takes investors' money seriously, yet he is happy to deny them loss relief through silence. 

Crowdcube, as you would expect, have been utterly useless. They should just send an intern up to have a chat to him (surely they have his home address??) - a cheap way to keep credibility. Instead they just try emailing him at an account that has been closed. 

Little Brew are now 17 months overdue with their accounts and other filings. As you can read above, they seem unlikely to be making any revenue again. The brewery has been closed in all but name for at least a year but CC SHs are unable to claim their loss relief because there is some reason the company hasnt actually been closed. CC are either unwilling or unable to find out why. Its a zero service game for the people who trusted Crowdcube to pitch them a reasonable business. 

As with so many of Crowdcube's businesses, it is no the fact that they have failed but the way they have failed and the total incompetence of Crowdcube to offer shareholders any help. Read through our posts and it is by far the most common theme. 

It will continue until the only people who can do something, do something. Hello the FCA - which should really stand for Failing to Correct Anything.   


Sunday, 15 October 2017

Jam Vehicles eventually provide accounts -



Crowdcube funded Jam Vehicles have now filed accounts for YE April 16, just a few months before the 2017 ones are due. 


These accounts show losses of £200k, little cash, negative CA and a BS that is £240k in the red. Around £430k has been raised since in equity finance. 

According to their KS campaign no bikes have been delivered yet, despite various promises and updates. The estimated delivery date for the bikes these people bought was April 2015.

Are we yet again seeing Crowdcube funding being used to fill the hole left by KS creditors - ie unfulfilled orders. You would think that at some stage people will learn that this is not a great idea as an investment. 

Judgement reserved until the next accounts arrive in January 2018 - if they do. The good news for CC investors is that the paper value from the last funding puts the company at around £2.2m, so well ahead of the CC campaign's £700k. They just need to provide a bike or two. 

Square Pie and the mystery of the Disappearing Restaurants

When Square Pie managed to get £650k off 324 Crowdcube punters for their 4 year mini bond in September 2015, they promised mass openings. Now in October 2017, they have fewer restaurants than two years ago.


We have given these guys some previous coverage - here

The original target for the bond was £2m but that soon looked untenable so they reduced it to £450k. That was a dumb idea. Then they had 6 restaurants in London, now they have only 3. Plus one in Birmingham.

In lieu of restaurants, they have teamed up with Vue - the cinema operators - to offer a pie selection to film goers. They have one Vue in London and one in Bristol. 

The last accounts to YE Dec 16 will not have thrilled SHs - a loss of around £300k against a projected profit of £75k. It is hardly surprising given the change in company's core strategy. 3 of the London restaurants from 2015 have now closed - which strikes us as very odd considering what the Crowdcube pitch said about them. The 2015 pitch showed the company operating 12 restaurants by YE 2016 - with 20 by the end of this year. 

So now they have joined The Eden Project and Riverside to see who can be the first Crowdcube mini bond funded company to fail to repay investors. Square Pie have little cash and now new investment this year. Their reviews remain poor. I wouldnt bet against them.  

Vrumi lose their vavavoom as Venrex zero them.


Vrumi raised just shy of £1m on Seedrs in 2015. Now along with their VC backers Venrex, they have valued themselves at zero as they try to find a way to work their market.

It's not the end but must be close. Vrumi are in the now rather overcrowded shared space market - they were the self proclaimed Airbnb of the work place. Their plans have failed to create the demand that they predicted, so in a move that must be a first in ECF, they have sent SHs an email stating that they have valued themselves at zero, after receiving the same figure from Venrex.

In 2015 they were valued at £3.5m pre money  - so £4.5m post. Why the company has felt it sensible or necessary to follow the Venrex valuation is not explained. It's not very encouraging for the Seedrs shareholders who were told in the pitch that the company had an 'exceptionally strong' management team. One assumes that cash has run out, targets have been missed and Venrex declined to back another round. 

It sounds like another sad ending - one to be shared amongst you all.


Friday, 13 October 2017

1Rebel raise another £6.6m in a downround for another go at expansion



In a great sleight of hand, old Crowdcube darlings, 1Rebel, have raised £6.6m to do what they stated they would do with their Crowdcube 2015 £2.9m jackpot. Open gyms.


1Rebel originally took £1.5m off Crowdcube members in 2014 - to open gyms. By the end of 2015, they had opened two and came back for more cash - with the plan that they would open another 8 (2pa) over the next 4 years. This got them a round of applause and another £2.9m.

Now in October 2017, they still have just two units but have convinced backers at Codex Capital that they need another £6.6m to open the gyms they havent yet opened. This new deal was not in the plans and will leave CC investors seriously diluted. The £6.6m has been taken in at a valuation of £10m  - so below the 2015 CC round. Shareholders first learnt of this 'progress' via an article in CityAM. Following this, management sent a SH letter out. The question still remains  - have all shareholders been diluted equally? James Jack, the Chairman, has assured all CC SHs that the Board approved the down round and that these new SHs are serious business players who will help propel Rebel on to success. He didnt ask them though.

In all the previous SH updates, Rebel referred to the need for new debt finance - not equity. Using the much abused EBITDA profit gambit, they hoped to be able to borrow. Clearly this didnt happen as required. EBITDA was been hammered as a cash generating indicator post the Tech bubble crash. We could have told them that.

Of course it goes without saying that they have missed all of their Crowdcube targets and that this £6.6m was not in the plans.

This latest round of funding prevents them from closing but it also hugely dilutes the people who took the risk in 2014 and 2015 on promises that have failed to materialise.

Where has the 2015 money gone? No new units were opened which would have soaked it up - that is what it was for after all. They have delayed their accounts, so we will just have wait till Christmas to find out. Our guess is that the original model was not right and we have Rebel admitting as much to SHs. Then a couple of left field ideas wasted time and money. They were running to just stand still with loses in 2015 of £1.7m - more than twice the projected figure, which was in fact mainly historic.
 
Maybe that's what they mean by burning the fat?

Perhaps now with the metrics pointing in the right direction they have a chance - which is more than you would guess CC shareholders have.

As a footnote, we wonder if this down round will be featured by Crowdcube in their 'valuation' game that they publish every year? Somehow we doubt it.

Thursday, 12 October 2017

Government response to ECF regulation query


As expected, our Government have run for cover when it comes to answering any detailed queries about the lack of proper regulation in the equity crowdfunding sector.


Stephen Barclay MP is Economic Secretary to the Treasury. He stated in a reply to a query on the matter, that ECF is regulated by the FCA - as if this was news. He made no mention of what this meant but continued that  - 

''The Government has implemented a regulatory regime that is robust and proportionate......'' 

As we all know this is total nonsense. The FCA do what you tell them Stephen and as you are not telling them anything that is exactly what they are doing. 

He goes on to raise the vital issue but spectacularly manages to miss the nail and hit his thumb. The issue is that ECF is new and that the FCA have no experience or expertise or Government advice on how to treat it - because it is new. Its all part of the new age with new technologies and the old system cannot cope with it. The best he can offer is that the ECF platforms are supposed to regulate offers so that they are clear and fair. 

Thank you, Stephen.

It is a lengthy answer which says absolutely nothing and addresses none of the real issues. That presumably is why he has been given his job.

He might of course have a few other pressing matters stuck to his desk. Meanwhile the ECF mess continues to build.

Pass the fudge. 



Crowdcube funded companies queuing up to close



21 Crowdcube funded companies are currently late filing accounts and with one recent, new closure, it seems many of these will go the same way. 


HMRC give you nine months to prepare company accounts so filing late is simply a sign of very poor management or something worse. All of these 21 will be preparing accounts for a small co, so its a very simple spreadsheet version. 

Peach Lettings were dissolved this week; another Crowdcube success, hitting the stone wall with a large smack. They never filed accounts or did anything apart from help themselves to other people's money. We contacted them but got nowhere. 

Little Brew is now over 12 months late filing and has been in and out of striking off so many times we have lost count. Jam Vehicles is the same. 

The queue is growing as October rumbles on. 

Wednesday, 11 October 2017

What Crowdfunder dont tell you in their new Crowdcube pitch



Crowdfunder is back on Crowdcube - seeking £750k for 4.27%. Reading the pitch you would be forgiven for thinking that it is on track for their 2015 projections. 


Back in 2015/16, when they took over £1.3m off Crowdcube punters, they showed £3.99m revenues.

Now the new Crowdcube pitch states that the company are on track for a turnover of £2.2m for 2017 - so well off the £3.99m. This new raise was not part of the 15/16 plans.  

This doesnt mean they wont go on to succeed - just that some of the figures being banded about are misleading. The 2015 (historic) revenues were given by CC as £909k. It now turns out this figure was in fact only £800k. These anomalies are hardly surprising seeing that Crowdcube's Darren Westlake is on their board.

All of this could so easily be avoided if CC would just do a direct comparison. But then that would lead to people asking  - so if they missed these targets by that much why has the valuation gone up by so much. To which they would answer - well look at our future figures. To which any sensible investor would come back with - well the last time you told us this, your figures were out by a rather a long way. 

Tuesday, 10 October 2017

Monetaflex call it a day - a bad one.



Monetaflex took £169k off Crowdcube punters in 2015. Now that money is gone they have decided to call it a day.

Look - we dont make this stuff up. Crowdcube do.

The final communication from founders to their SHs, was the usual - we could have made it but things just went against us. Actually it was the usual poor idea even more poorly performed.

And the main point made by the founders to the 133 Crowdcube SHs, is that they will now be able to reclaim their tax. What does that say about the chances for UKplc?

A quick look at how a couple of Crowdcube bond issuers are doing - The Eden Project and River Cottage



Both the Eden Project and River Cottage raised money on Crowdcube via its mini bond offer. The former's bond is due for repayment in 12 months and River Cottage's in 2019. Neither has managed to get near to its projected success.


Reading through the Crowdcube prospectus for these two it is hard to believe that they are the same companies that now bear these names.

Eden borrowed £1.5m to purchase and develop two Grade II listed steadings. They showed considerable increases in revenues that have failed to materialise and the steadings remain undeveloped - 3 years later. No planning applications are currently listed as being live at the Council planning office, except for an advisory one. No permissions are outstanding.

An article in the Plymouth Herald from January 2017 questioned what was happening with the buildings as they had fallen in further disrepair since the purchase. Officially the reply was, the renovation was ongoing. We asked them how this could be so if no planning applications were currently live. They declined to reply. 

The same reply told us  - 

The Eden Project made a cash surplus from trading of more than £1.6 million in the last financial year, the fourth successive year of significant profit.
 
We asked what this meant, as they had posted a loss in the accounts for 2017 and 2016 and 2015...... Again they chose not to clarify but from looking over the accounts, this looks like a case of using EBITDA as a free cash flow declaration - something allowed by the UKs accounting system but since the dotcom crash, a fudge that is not generally thought to be best practice. Its debatable at least and as Warren Buffet said of it -

"Does management think the tooth fairy pays for capital expenditures?"  

After ITDA, Eden reported a small lose for 2017 - well around half a million. As the Eden project is intensely capital orientated, it seems sensible to include DA and the ensuing I from borrowings, in the real cash generated figure, especially if this results in a NP that is negative. One thing is for sure, the final declaration given here that they had four years of significant profits is not backed up by the filed accounts - EBITDA or no EBITDA. 

At any rate, revenues are way short of the anticipated numbers used to sell the bond. Sure the bond will get repaid but will it come from free cash flow? They seemed very defensive when we approached them and repeatedly told us that any statements inferring this or that, would be considered 'wrong and damaging'. Sad really. We only want to get at the truth.

River Cottage borrowed £1m to roll out more of their canteens. They now have fewer canteens than they did during the pitch, having closed their largest one in Plymouth this year. How much did that cost - reports show that they did a midnight raid on the day they closed to remove the F&F! 

According to a statement from the management it had always been a poor performer - although it was described as a roaring success in the bond pitch. Again the numbers are a long way off those suggested in the pitch documents. 

Where does this leave us?

Well both companies will surely repay their loans, even if it means raising their borrowings - the PR fallout would be too damaging and they are both nationally known and loved brands. But it yet again illustrates the futile job Crowdcube do in checking these numbers before using their FCA regulated platform to promote them.   

Monday, 9 October 2017

Just like we have been saying all along - Beeline on Dragons Den proves our point!



Last night, one of the Golden Boys of Seedrs successful pitches stable, got a roasting from the BBC Dragons. Beeline entered the Den with high hopes of attracting £100k for 2.5%. They left with rear ends smoking.


All of the Dragons' points about the cycling gadget made perfect sense to us. A gadget that doesnt really do much, certainly not cutting edge and will most likely be irrelevant in a year's time. More than £500k burnt so far with little knowledge as to where it has gone. A future raise with dilution anticipated within 6 months. A ludicrous valuation which gives future investors little hope of a return. 

The Beeline boys' hands tied by their SH and previous valuations. In fact the boys seemed incredibly clueless to us, although that may have been the pressure of the Den. They were far from convincing.

The most positive thing that was said about the pitch was that the packaging was nice. Thanks Deborah. We are not big fans of DD - telly at its worst most of the time. For once they were spot on. 

We see all of the above daily and investors still invest. When will they learn?   

Thursday, 5 October 2017

Easy Property does a deal with








Easy Property or Eprop raised over £1.3m on Crowdcube in 2014, valuing the company at over £60m. They then got themselves into a right mess and have now relaunched having done a deal with GPEA. The business model is now B2B2C as opposed to B2C. 


It's unclear what the exact deal entails but the company recently replaced most of its management team and from figures at CH, raised around £16m in an equity deal with GPEA, which massively dilutes CC shareholders and is technically a Big Dipper of a downround.

Still the good news is, at least they are still going. Where we go from here is anyone's guess. 

Please fasten your seat belts for take off and good luck.

Muted applause greets Wealthify sale to Aviva


Wealthify raised £1.1m on Seedrs a year ago. Now they have sold a majority share to Aviva. Seedrs investors have no choice but to sell out, it's part of the deal the founders made. Is this really what equity crowdfunding is about?

So in 12 months, Seedrs investors will see a return of 18.74% gross profit on their money. They will lose their EIS from last year's tax return. You also have to figure in the Seedrs Carry Fee, which they take off any profits before handing them out. This fee is 7.5% of the profit - you can do the math.

Well done to the founders of Wealthify first off. Opportunity knocked and you grabbed it.

However to start your SH letter by claiming that your SHs are 'valued' is clearly nonsense. They had no say in this decision. The company may now go on to become very successful but the people who risked their necks for you, have been fobbed off with a 12 month return of under 20%. They were merely human stepping stones used for your own purposes.

Im pretty sure that if that had been on offer but obviously not guaranteed, a year ago you would have failed to raise anything. After you have allowed for the lost opportunity cost and the hassle of the EIS cancellation, is this such a great deal?

Founders and maybe a few others will maintain their holdings and get the full benefit of this down the line if it all goes well.

It is yet another example of the fact that even when things go well for an ECF funded company, shareholders will be lucky to see much by way of a return. In this instance, why were Seedrs shareholders not better protected?

Wednesday, 4 October 2017

Crowdcube top their own table of failures


There is certain irony to the recent results we have collated, that show Crowdcube, the UK's best known equity crowdfunding site, sitting on top of the list of the largest variance between projections and reality.

September has produced a large number of filed accounts for Crowdcube funded businesses and taken with ones from previous months, we have an accurate picture of how these companies have operated in relation to the promises they made when raising funding on Crowdcube's FCA regulated platform.

It is nearly all bad - with Crowdcube leading the way.

Here are some highlights - the projections and filed NP are for a single, 12 month period -

Crowdcube      YE Sept16 - Projected NP £3,764,000 -  Filed NP (£5,352,000)-Var  (£9,116,000)

Hochanda        YE Sept16 -                        (£1,000,000) -                (£8,500,000)          (£7,500,000)

Airlander         YE Sept16 -                        £     526,000 -                 (£2,800,000)          (£3,300,000)

Watertogo        YE Sept16 -                        £2,500,000  -                  (£   200,000)          (£2,700,000)

The list goes on and on. Of the 118 companies that we have recent filed accounts for, ie June/July and Sept 17, that raised money on Crowdcube, all but 4 have missed their projections. We have another 30 that are late filing.

This week Crowdcube claimed that things were going well. They claimed to have landed over £25m in investments for companies in the last Q to Sept 17. We all know that is rubbish. Need we say more. 

And yet another Crowdcube success goes dark - Living Indie aint anymore.


Living Indie is a classic Crowdcube mess. It's a live streaming music website with no website or any SM presence.


Living Indie took £200k off Crowdcube members in 2015. Now if you look for the company on the web it has vanished. All links to their Tw, FB, Inst, etc sites are dead ends. And Crowdcube have removed the pitch from their platform.

It is still live at CH. So it is what have termed a zombie - still registered but not doing anything. 

Whatever happened to the £200k? 

Onelane took £280k off investors via Crowdcube, spent it all and more and liquidated.



Led by Camron Moradi, Onelane's story is now the norm for Crowdcube successes.


They traded for little over a year post investment and then went off to do something else. There was no value created; nothing but outstanding creditors. What Camron did with the £280k will never be known. UKplc is left to clean up the mess.

Yet another great story from the Crowdcube stables.

We wrote about them here and we had comms with Camron. It turns out he is not to be trusted. 

Monday, 2 October 2017

Seedrs posts increased losses on tiny turnover


Seedrs - the UK's other retail equity crowdfunding site, has just filed losses of £3.8m, up from last year's loss of £1.6m. Is it any wonder they are raising another £4m?


They are building, apparently. A large CA, with £9.5m (from the £10m equity raise) in the bank and very low creditors, displays admirable restraint that another company could learn from. The cash plus the new £4m raise, has a purpose. 

But the income of just over £1m looks very vulnerable on this current market. It wouldnt take much to make this head south. If you are going to make increasing losses then you do need to be seeing some good progress on the traction side. £1m is quite frankly pathetic for the noise they make. That equates to £25m in completions at a 4% commission or even less if they are working off a higher rate.

Seedrs has expenditure of over £5m - so they need to making 5 times the revenue just to BE with a constant cost base. Given the time it has taken to get here, what are the chances of this before we all die? 

We really thought they were doing better than this after 8 years. For their revenues to grow by only 25% (2015 revenue was £800k) is hardly impressive in a growth business.  It also puts their claim to have raised over £230m since they started, into doubt? Either that or 2016 was a nightmare. But then that's what the PR Dept. is for. 

Hochanda file losses of over £8,000,000. CEO resigns.



Hochanda raised £1.9m on Crowdcube in 2016. They were due to file these accounts to Dec16 in June but changed the date. They signed them off in June 2016 - so why the delay? Now they have a deficit on their BS of over £5m.


Even by Crowdcube's standards this one is looking messy.

The CEO Jamie Morris Brian Martin resigned the day these numbers came out. This is worth a read in light of today's news. Something smells - http://startups.co.uk/the-entrepreneur-jamie-martin-hochanda/

When we read the BS (here that stands for Balance Sheet although the other meaning might be just as appropriate), we had to recheck what it said five times and then change glasses just to be sure. The Crowdcube 2016 financials showed the company making a £2m loss in 2016; not £8m. And the long term borrowings that appeared on the BS in 2016 of over £5m have no note and are not mentioned in the Crowdcube documents.

Shareholders may be disappointed to hear that the dividend they bought into for 2017 and probably 2018, totalling £2.4m, seems unlikely!

Watch this space for more Crowdcube crazy stories as we have a raft of company accounts filed for YE Dec 2106 to share with you. 

Sunday, 1 October 2017

River Cottage closes its Plymouth restaurant and now has only 3 units.


Hugh Fernley Whittingstall's River Cottage brand, raised £1m on Crowdcube by way of a mini bond in 2014. The money was to open new restaurants. 3 years later, they have fewer restaurants than they did then.


In the pitch for £1m, River Cottage made it quite clear that this £1m was to open new units over the next 5 years - taking then from 4 to 7. It already had 4 units (one was opening in conjunction with the raise).

In May of this year, this appeared in The Caterer - 

Hugh Fearnley-Whittingstall’s River Cottage Canteen and Deli in Plymouth has closed suddenly, according to the Plymouth Herald.
After six years in business, “lorries were seen hauling away furniture and parts of the kitchen” from the restaurant at the Royal William Yard and the unit was “left deserted”, reports the paper.
A spokesperson for River Cottage told The Herald the site had “struggled” and the decision has been made to close the restaurant 

So this Plymouth unit had struggled? It opened in 2011, 3 years before they raised the CC bond. According to the pitch, Plymouth was a great success. It was RC's largest unit so closure will have had a major impact on revenues - see here for the piece we wrote on RC in Jan 17. The company as at March 2016, was already making large losses, with revenues stagnant at £4.4m. Plymouth accounted for at least £1.5m of the 2014 £4m t/o.  
285 Crowdcube punters must now wait another 18 months to see if their principle sum will be repaid. One thing is for sure; it wont be taken out of revenues from new restaurants. They raised another £396k in equity in 2016. Accounts for YE March 17 due out before Christmas. 

Revolut goes dark


Revolut, the online bank funded by Crowdcube (£1m) and Seedrs (£4m), has server issues and accounts are blocked for 24 hours.


We will never know what happened in full, Revolut say that their server started having problems and the back up server crashed due to overloading. Outcome - customers lost service.

It's all fixed now apparently.

Was moving into insurance before getting this type of glitch sorted such a good idea? One things for sure when the internet goes wrong the world stops.

Saturday, 30 September 2017

Kokoon offer their Kickstarter backers refund using Crowdcube equity finance



This is a first - although we trailed the possibilty in our last post on Kokoon. They 'owe' KS pledgers either a fully finished product (not currently available) or $1.9m as they have now agreed to refund them. 


The Crowdcube campaign was led on the premise that these sales were bagged - accounted for and in the revenue pot. We pointed out that as the number of complaints on KS mounts and people demand refunds, this was crazy. It is in fact a massive liability. 

Just 3 days ago the founders posted this message on KS -

Thank you for your messages. We’re currently working on our next update, which we’ll be sending out when Richard returns with the latest news from the factory in China. 
If anyone would like to request a refund, please send us a direct message on Kickstarter or an email (with your backer number) to support@kokoon.io and we will arrange it. 

There is no product - design yes but finished item after 2 years - no. More delays were announced a few days ago.

Do CC investors know that the KS cash has been offered back? Cash that is described by the company as sales revenue even though it isnt. Where would the cash for refunds come from exactly? And why isnt any of this mentioned in the CC campaign?


Friday, 29 September 2017

Will Crowdcube make it to Christmas?


We took a look at Crowdcube's billings for June to September. It really doesnt make for happy reading if you are a shareholder.


(We wrote this before Crowdcube published their misleading Q3 figures. Can it be possible that their investment figure of £25.4m includes all the money pledged in failed campaigns? Surely not?)

As we already know, Crowdcube burn in excess of £7.5m (2015/16 accounts) just to keep the office and PR running. That means that they need to be grossing in excess of £200m in completed campaigns, at their stated average commission rate of 4%, to reach BE.

So for the four months we looked at, we found the following - 

June 17 -      £4.25m raised from 7 campaigns

July 17 -      £4.5m rasied from 12 campaigns

August 17 - £4.5m raised from 9 campaigns

Sept -          £1.58m raised from 5 campaigns

Averaged over the 4 months, £3.7m equates to an annual gross of £44m - or half what they achieved in the previous year which included ''£10m'' with Brewdog. At 4% that leads to a revenue of £1.76m. So lets assume they have other revenue streams which we dont know about  - last years accounts showed revenues of £4m. Assuming even the best case, they are not going to be making more than they did last year, leading to another loss of over £5m. At least. And dont forget we havent taken into account their habit of including, in these totals, amounts that are not raised on platform and therefore not entitled to any commission.

Somewhere in that paragraph is a little share holder screaming blue murder. With falling gross completions, increased competition, first mover advantage gone and a whole raft of failures from 2014/15 and 16 queuing up round the block - there is no way out. 

The Crowdcube model doesnt work - you know we know this. So why would anyone want to buy them? 

Looking at the site now, they have an increasing number of half completed pitches, drifting around until their deadline date - with no interest from investors. Why? Well because Crowdcube couldnt pick a winner from a one horse race. Investors have taken 6 years to wake up but now they are on the move. Claims of 34000 'members' includes a vast amount of dead wood. Egos have exploded along with the cost base and have reached levels that were never realistically going to be covered by their revenues. In fact they now resemble so many of their own platform's pitches - poor business models, poorly executed. There are of course exceptions but not enough.

Compare their figures with the recently released ones from Funding Circle and you can see the difference between a well run business and a mess. FC is still making considerable losses but the key figures are heading in the right direction. 

So UKplc could have some good news for Christmas.




Is Ethos Global Crowdcube's worst comedy ever?



Ethos Global raised £709k on Crowdcube in 2016. In 2017 having failed to file any new accounts, it was forced into liquidation by creditors. Now new evidence we have seen suggests that this isnt simply a business failure but something far more serious.

We knew this one would end in tears as soon as we read the Crowdcube campaign's opening line

ETHOS is a chain of boutique Yoga & Fitness hybrid studios with headquarters in Cambridge..........

How can a one unit operation be a chain? We tried to give them the benefit of the doubt - after all landlords can be very unhelpful. But this evidence makes it pretty clear what has happened.

The case in to the liquidation is on going and nothing has been filed yet by CH post the Court's liquidation notice. But we have been in touch with shareholders.

We have written about Ethos many times, here but this evidence is new. A timeline from the point of the Crowdcube campaign shows that some people must have known about the problems the company had before they raised the £709k. And that these facts were not shared, even though they were materially important. They also reveal that Crowdcube have been involved in trying to persuade shareholders to take shares in newco Soma - even though it seems likely to us that Soma doesnt own the assets in the business it is running. These were paid for by Ethos Gobal and its shareholders and they have O/S liabilities. 

The most dramatic revelation is that Ethos Global sent an email to shareholders, requesting more funding, in which they blatantly used information about the company's situation that was false. And they did raise money according to filings at CH.

Lets look at the timeline - 

January 2016 Crowdcube campaign for £500k completes at a total of £709k. This campaign was centred on the success of the Cambridge studio, its future and the future growth on the London Spitalfields' site, which was already under construction. No mention was made of any problems with the Cambridge landlord. Shares were issued under a Crowdcube Nominee account.

June/July 2016 London Ethos Opens - we dont have a date but an article in The Standard in July and Ethos's own revenue figures show it must have been open at the start of July 2016. So this studio in Spitalfields was opened by Ethos Global not Ethos London England or SOMA London England.

September 2016 Ethos Accounts YE Dec2105 become over due - remember these accounts are in fact for an historical period with regard to the Crowdcube pitch - ie Crowdcube DD needed to be on this.

November 2016 Ethos Global email. This email is asking shareholders for more money. It is very upbeat about the company. It does not mention the fact that the 2015 accounts have not been filed. These accounts would have revealed the gap between the Crowdcube projections for 2015 and reality. It mentions that a VC has looked over the company's DD and has approved it and is on the cusp of investing. Remember no accounts filed! It gives the following figures for real turnover - for 2016 -

Feb - £3k
Mar - £7k
Apr - £9k
May- £10k
June- £11k
July - £16k
Aug - £21k
Sept - £36k
Oct -  £52k
(NB - these sales include over half from the use of Classpass. They charge a high comm rate and no longer deal with SOMA) 

In the Crowdcube pitch the figures for 2015 showed a gross revenue of over £550k for this period and these figures were historic - Crowdcube raise completed January 2016. You can see how wrong this was. That is if you can believe these figures produced by the company. Did CC bother to check anything? It seems very unlikely that the problems that caused the Petition to be filed in February 2017 or 3 months later, were not known to the Ethos management when this email was sent.

This email goes on to say -

·  Cambridge operations are being concluded efficiently by our management team demonstrating excellent customer care skills, while legal matters are progressing fast with our solicitors. Timing of Cambridge closure was beyond our control; however, all other developments indicate that exit from Cambridge is accelerating the short-term profitability of the London studio heading towards the January period, as well as the long-term growth of the company focusing head office resources in London and further expansion.

Well we all know this is tripe. Within a few months the company had been closed by court order by petition by its Cambridge landlord. The full details are, as yet, unclear. Again Dr Theo clearly has no idea about who owns the company assets.

The email, sent by the company's Development Officer who has since left, concludes with this message -

We would be thrilled to have your further participation in this special opportunity to increase significantly your stake-holding in ETHOS.

You bet! We tried to talk to her on behalf of shareholders but she refused.



Dec 2016 - First Gazette filed against Ethos and co founder Hersche resigns

Jan 2017 - £300k investement filed at CH and another allotment of 3m shares issued for no consideration.

Feb 2017 - Ethos London England incorporated with Dr Theo as sole director and SH.
Feb 2017 - Hersche joins board. Maybe rejoins would be more apt.

Feb2017 - Petition to liquidate Ethos Global presented by The London Borough of Tower Hamlets and The Prudential - both of whom are creditors.

April 2017 - Name change to Soma London England. So why change the name from Ethos London England? Why rub out all of that brand awareness? Well...... You are not allowed to use a liquidated trading name to establish a newco whilst the process is still ongoing. The name may have value which is owned by the company. Of course we know that the process wasnt yet on going and it is illegal for company directors to 'plan' these things if it impinges on the outcome for creditors.

2 July 2017 - Ethos Global  - Court Order filed to wind up the company as result of February petition.

8 July 2017 - Dr Theo writes to shareholders - This is how he opened the email -

We are writing to update you on the status of Ethos Global Ltd (EGL) and our move to a new company structure. We invite you to own an equal amount of shares in a new company that includes the London location and expansion plans for new studios.

He goes on  - 

To protect the original vision we had to separate the operations that initiated in Cambridge under EGL and the current London operations. EGL will now be liquidated while the new company structure has been set up under a new trade, lease and assets in the same London location, owing to the contributions of our unwavering supporters including the London landlord. Following the Cambridge studio closure and months of increasingly expensive legal proceedings defending our position against multiple claims against the Cambridge landlord’s contractual breaches, we decided to not spend further resources in that direction and focus on larger opportunities in hand.

And on............

we are combining forces once again with Crowdcube to involve you in the new company structure. Crowdcube will play a purely administrative role holding shares in the new company for the crowd as nominee.

So CC are actively involved in this. There is no mention of the legality of running Ethos Global into liquidation, leaving creditors hung out to dry. The fact that the money invested in Ethos Global was used to invest in the new London studio, seems to have been missed by Dr Theo's logic. He clearly believes that he owns all the IP and assets and he seems confused about the closure of Ethos and opening of a new legal entity with no ties to Ethos, Soma. As the CEO of a company, you dont get to choose who to pay as creditors and who to ignore and you cannot reallocate assets via a liquidation. If the liquidation was a choice, planned by the founders (ie by refusing to pay the landlord they knew he would be forced to take this action, as the timings might suggest), as opposed to enforced on them as the filings suggest, then they are surely in breech of some company laws?  Maybe they are anyway? We are treading carefully as the liquidator's report is still awaited.

Why would investors want to follow the new Soma London England, seeing what they see here? Are Crowdcube really going to be the nominees holding shares in this newco after all they have been involved with in allowing Ethos Global take £700k plus off investors? What would the FCA say about that, given they license Crowdcube's activity? There are creditors here - it is not a straight share swap.

Meanwhile in the midst of this, Ethos Global have the balls to ask for new funding from investors, using highly contentious information.

Crowdcube have a knack of creating godawful messes. In the end the losers are the creditors and investors. Investors should know better - it's the creditors who get most of our sympathy. In this case both seem to have been treated with total contempt by the company and Crowdcube. Just for amusement, Ethos Global's Crowdcube financials had them with revenues of £4m and NP of £1.8m for 2017.

We have some correspondence from Crowdcube's XXXXXXX - answering some very serious accusations from some very worried Ethos shareholders. This is not to denigrate XXXXXX's efforts but you would really expect an FCA regulated platform, holding a nominee account with this mess on their hands, to have someone with just a jot of experience in something related to ECF, to be handling these matters. XXXXXX has none of the above, is mid twenties, read arts at uni, and clearly from the replies knows absolutely nothing about share ownership, liquidations and the mess Crowdcube are in. Shareholders may as well ask the lady at Tesco's check out - maybe they did!  That isnt XXXX's fault per se but it is further proof that Crowdcube isnt fit for purpose.

Finally - we received an email just now from SOMA. They are selling more future monthly memberships in their new business - the one that may or may not be legal. You get a discount from £250 to £150. All of this after the SOMA opening party was cancelled a couple of weeks ago. No reason given. The email claims that the offer sent out only two days ago, is fully subscribed - funny that we never received that offer?? And funny that the same offer was sent out on the 3rd August. Are people really being taken in by this?

And yes, you did just read all of that here!








Are Crowdcube delusional?


Crowdcube have produced their latest quarter's report for July to Sept 2017. Read it and see if you can make sense of it.


This is a report on the quarter for the activity of their ECF business - ie what has happened on the platform. It's a little downbeat for the CC Glitz Dept. But then they have their reasons.

They open with a very unimpressive statement that they had revenues of £1m. As their costs are around £2m that's not great. The cover infographic is honest enough to include the scandal ridden Ethos Global, now Soma, logo right next to the C for Crowdcube. 

They go to say that they have a record number of new pitches - which is a bit like a car dealer saying they have had a record number of new cars on sale. It tells you nothing about performance. 

Then they say that £25.6m was invested into pitches on the platform with 31 business raising £14.4m between July and September. That is exactly what they state. What is the extra £10.2m? They only have one platform in the UK so it would be misleading to include their satellite businesses in Spain and Ireland and in any event this turnover is insignificant. Is this misleading?

They are happy to announce that their average commission has gone from well under 5% to over 5%. You do the math with the revenue at £1m on sales of £25.4m.  

If you count the number of signed off pitches that have raised money (from the company's own site), you get a total of under £12m for the period. So for example this doesnt include the new food pitch which raised over £1m (its target) yesterday but is still due to run for another 28 days. CC do include this. It also doesnt include the US 'partnership' which brought Keen Homes to our shores and has 'raised' over £2.8m but most of it in the US on another platform. But knowing CC they probably will include this.

The big news is apparently that their app has been a success. It took over £5m of investment, What they dont ask is if this £5m is new or just would have been put through the website? Our guess is that the app is a diversion and total waste of time. Since when did serious investors need to book a table for two and invest in a newco whilst enjoying the meal?

That all seems as clear as mud. 

What is clear is that with revenues of £1m, Crowdcube are heading for more large losses, with the probability of them being larger than 2015 or 2016. This whilst their closest rivals disappear in the opposite direction. 

Tuesday, 26 September 2017

Brewdog launches equity crowdfunding Punk round 5?



What are Brewdog up to? A new £90m round has just been announced with much of this supposedly coming from Punk Round No.5. No.4 flopped.


We will start with our usual caveat when discussing BD. It is a great company that has grown very quickly.

So that aside, the US Punk Campaign only managed to raise $7m of its $50m target and was closed this year. Then BD sold around 23% of itself to a West Coast PE firm; we at the time said this was a direct result of the failure of Punk 4. Now their plan is to raise a total of $180m, with half of this coming from ECF. Are they short of cash? Has the Ohio operation overstretched them?

We will just have to wait and see. It has certainly been in the news, which is what wags this dog's tail.

Monday, 25 September 2017

Zero Carbon Foods win Future Food award from the Beeb.


In some good news for a Crowdcube funded company, underground salad grower Zero CF have won this year's Future Award at the BBC's Food and Farming Awards.

Congratulations.

Investors will now have to hope there is no more dilution and that the company can at some stage make a profit. Recent listings at M&S should help, if they keep them.

Tell me is Michele Roux Jn, one of Zero's main high profile backers, signed up to the Beeb?

Are Kokoon or Crowdcube listening?


We think this is a first. Having not delivered to 8500 Kickstarter backers, Kokoon are valuing themselves at £6m and raising £750k on Crowdcube, using the 'sales' on KS.


Well in fact that isnt true as they have pre raised (off CC) £625k of this from two existing shareholders already. You know, the usual Crowdcube games.

What's quite astonishing, are the 2100 comments on their Kickstarter campaign, which enabled them to raise just short of $2m in 2015, to develop their headphones. More than 2 years later, despite numerous false dawns; they have not delivered an item. You can imagine what the comments say but here's a link  - https://www.kickstarter.com/projects/1861630723/take-control-of-your-sleep-with-kokoon-eeg-headpho/description

We never thought anyone would have the balls to try this on. In fact we recently advised a company wanting to raise £2m via ECF, that until they had fulfilled their KS obligations in full, we wouldnt deal with them. And in our opinion nor would investors. And they had delivered half of their commitment.

It makes the recent Retro Computers Kickstarter fiasco look insignificant. Maybe they will be Crowdcube's next tempting offer?

So the Crowdcube pitch states - 'Last year (to the 30th of June), we had £1,114,618 in sales through our Kickstarter campaign'. 

This poses an interesting Q. What is a sale? Surely a completed sale has to include both sides of the deal. Cash going one way, which we have here and product delivered satisfactorily, the other. This second half has not taken place and in fact it turns out the product isnt even ready to ship. It is still undergoing testing according to the KS updates dated 7 Sept 2017 and promised delivery dates continue to slip. Reading the updates and from our considerable knowledge about how badly these things can turn out, we would be highly suspicious of these promises. Refunds have already been demanded - so you could be looking at a debt of over £1m rather the trumpeted sales above.

The bottom line is  - Kokoon are claiming that the cash they are raising is mainly for product development ie forward looking. It's our guess most of it will be to produce the pre sales already accounted for. Or to put it another way, to fill in the large black hole.


It is embarrasing



Crowdcube's 'partnership' attempt with US platform Seedinvest is an embarrassment. Crowdcube are now degrading the UK in the international market place using Government, or rather our funds. 


Hailed as Crowdcube's breakthrough moment by the Crowdcube PR dispensing machine, the Keen Home pitch is a joke, accompanied by joke questions on the forum which only prove how sophisticated their punters are.

Ignoring whether the loss making home systems company is worth anything like its $15m price tag, the whole set up at Crowdcube confirms the platform's amateurism.

This is not a partnership; it's an attention seeking mess. Keen's real target is $8m in this raise (which is not made clear by CC) - of which they have only achieved $3.7m to date. So they state they need $8m but the min raise level for completion is set at $750k. How on earth can that work? That gap is too large - it means that if they only raised say a $4m they can only put in place half of their stated plans before running out of cash. Who would invest in that? The whole basis of ECF, as we run it in the UK, is that the company plan needs £X to make it work, so if the company doesnt get to £X, the transaction is cancelled. It's common sense. 

On the CC forum there is a Q which illustrates a total ignorance of the way these things work. Keen never wanted $570k for 19% of the company as this punter says - he is simply ill informed and confused. He goes on to suggest that the company is selling 80% of its equity!! It is alarming that such people have access. 

The whole thing has, anyway, been a total flop - for everyone. This of course may be a  blessing. UK investors have only put £60k out of the $3.7m current total and the pitch seems to have died in its second week on this side of the pond. But why did the management at Crowdcube ever think this was a good idea? Apparently the dispenser says that it gives UK investors a unique opportunity toown part of a great USA business. Enough said. From Desperation comes desperation.

Unfortunately for the rest of us, it makes the UK look bereft of any business sense. 

 

Friday, 22 September 2017

Crowdcube's bad haircvt success fails


Haircvt raised £190k on Crowdcube in 2015. Now they have closed. They failed to raise their required £1.5m, so thats it.


Sound familiar? Well that's because it is. If a company's projections show a future cash requirement of £1.5m and this evapourates, you can be pretty sure the company will close. It happens on Crowdcube rather too often.

What happened to the £190k is anyone's guess - few trips, few nights out...it all adds up you know. It's not a bad wheeze. Unless you were one of the 122 Crowdcube punters.

Facewatch looks the other way


More target practice needed for Crowdcube funded Facewatch


Taking £500k off Crowdcube punters was easy compared with aligning the real world with the projected one.

Facewatch i admits to being a long term journey - well they did in the accounts. However they didnt in their Crowdcube pitch. Filed accounts for YE March 17 show losses of £800k against the fantasy version AKA Crowdcube  - of just £129k. For YE Mar 2018, this company sold equity using a projected profit of £2.9m.

I will definitely eat my hat if that's true.

Whats up at Superjam and Beer52?



Fraser Doherty has run Superjam or Eat Super for many years. They raised around £300k on Crowdcube a few years ago. He is also a hands on director Beer52, an Edinburgh based beer subscription site which raised £100k on Angels Den  in 2014 and then another £800k privately via HNW individuals last year.


We have written about both here and here. 

It is difficult to understand the figures as related to both companies. Superjam should, according to the Crowdcube vision, be making over £1.5m profit but instead made £3k on what appears to be a modest turnover. They seem to have lost all of their major UK listings apart from a one jam , heavily discounted offer in Waitrose. They were everywhere.

Beer52 have done better but articles that appeared after the 2016 funding stated that their 2015 turnover was £2.6m and in 2016 it was going to be £8m. Nothing in the accounts filed (to June 17) suggests figures of this size. Losses have become breakeven over the period. Not the vision that Angels Den promoted. 

Anyone any ideas?