Gripit raised £1.99m less than a year ago on Crowdcube. Valued then at £12m PM, the company showed no new raises would be required before 2019. Now they are back again raising another £1.5m at around a PM value of £20m.
Backed by Dragon Meadon, the company makes and sells loads of widgets to help fix plasterboard.
What they dont seem capable of doing is creating any sensible financial projections.
Last year they claimed that 2016 would see a turnover of £2.546m. An impressive rise from the historic 2015 revenue of £338k.
Now we learn from this new raise, the actual revenue for 2016 was only £1.189m - so well under half that anticipated in the first quarter of that year. Likewise the figures for 2017, which last year showed revenues of £8.885m are now projected to be only 3.984m. You get the picture.
As usual with Crowdcube financials, the GPM is more myth than fact and they missed their 2016 target by a whole 5%. Losses for 2016 were almost 4 times larger than the 2016 projections.
Now this company may go on to do great things. But why is it that 99% of companies (our research will back this up) fail to get even close to the projections they issue and that Crowdcube vet? Even a company with the help of an old wise bird like Meadon has fallen into this very obvious trap.
Surely they dont do this on purpose?
Invest but dont expect them to sell anything like the numbers they say they will. If this sort of nonsense came up in a Dragons Den episode, you can imagine the sort of ridicule and scorn the entrepreneurs could expect to receive from all Dragons but especially the Dragon Meadon.