Friday, 5 May 2017

Crowdcube's Vulpine crashes out


Vulpine raised over £1m on Crowdcube at the end of 2015. They have now decided to call it a day. A recent attempt to raise more cash on Crowdcube flopped and you have to ask why they didnt take a reality check and lower their ludicrous valuation. Too late now.

It's what happens when you get on the Crowdcube merry go round; high valuations lead to higher ones, as the platform doesnt do down rounds. The public are not that stupid. 

We have written about these guys before - http://fantasyequitycrowdfunding.blogspot.co.uk/search?q=+vulpine on here. Nothing wrong with the product but zero business sense. We called this in 2015.

Left to their own devices and growing slowly they may well have made a good living for the founders. Get scaling up wrong and there is trouble. They got it horribly wrong. 

So in little more than 12 months, they have blown £1m and their business, apart.

In their £1m raise, they had only asked for £500k - so they have managed to deliver nothing with twice the money. The usual Crowdcube projections showed £500k profits on £4m plus turnover for this year. 

In other news Crowdcube claim to have had a record first quarter for 2017 - you may have tripped up over the countless press releases out there. I suppose that interpretation depends on what date you use - the completed campaign dates or the when the money gets to the businesses' accounts. Either way what they should be doing is leaving aside their incessant self grooming and telling us why they think a company like Vulpine has been such a disaster. Then we might get somewhere.

7 comments:

  1. No surprise this one. Having looked at the Vulpine blog I suspect a fair chunk of the cash was used by the owners to subsidise their lifestyle. They even had a March 2017 feature (now pulled) on their website where Mr and Mrs Hussey were showing off their new August hand built bikes which cost £10k. Apparently this was a present to themselves celebrating the 5th birthday of Vulpine.

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    1. It gets worse. They blew over half of the funding on salaries in 2016. With Hussey pocketing £120k.

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    2. Nope. That was the new MD, who lasted 3 months. The bikes look to be marketing devices. No cycling company would pay RRP for bikes, surely?

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    3. Really. £120k for 3 months? Current management accts 16/17 have it at £120k and companies House has Hussey as sole director since mid 16.

      Looking at the numbers nothing would surprise me. They sent out a magazine to their mailing list of 40k that arrived after the administrator landed...

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    4. Interesting about the bikes - they do appear on the list of assets prepared for the closure.

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  2. Wish I had found this blog before investing in Vulpine.

    Naturally I didn't invest more than I can afford to lose (phew) but I do feel like Crowdcube have let me down if the financials posted were bending the truth as you suggest...

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  3. I really don't understand why CC doesn't facilitate down-rounds. There are several businesses that I think should just swallow their pride, reduce their valuation and ask for help. Too many of the businesses on CC shut down all communications once things start going pear shaped, only to resurface six months later with a shock sales pitch that doesn't fool anyone. Why not come up with a new plan at a reduced valuation to reward investors who take on the additional risk? There is no shame in it - its how things work in the real world, not the CC fantasy world

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