Wednesday, 26 July 2017

Look to the future with Crowdcube's newest campaign from Chocolate enthusiasts in York



A new chocolate facility is to open in York. The final £250k for the project will be raised on Crowdcube starting next week. We did some digging.


The outline plans seems ok and the girl behind them has done some good things with her PR. But the press so far have failed to mention the simple fact that the business she has run since 2011, York Cocoa House  Ltd, is loss making and has a large negative balance on its 2015 accounts. The 2016 ones are due in September 17 so I would certainly want to see those. The company did raise a small sum at the start of 2017 and has gathered various bits of funding from local sources. Up until this, they had had no equity investment. 

It would be typical of CC to ignore this fact as irrelevant. And I dont doubt she will raise the money based on her rewards, who can resist good chocolate, and friends. But is it a good idea? It certainly is not scalable and to date, all she has proven is how to lose cash. You would expect her business after 6 years trading, to at least be at BE.

As you would expect the valuation for the new factory business, yet to be commissioned, is typical Crowdcube fantasy. Expect this come to come down if you dont all do your usual impersonation of a lemming. 

This one is a very good example for why all ECF campaigning companies should be required to produce full accounts for 2 years prior and at least 2 years afterwards. 

Anyway, off for week or so and will look forward to the full pitch when it goes live.   

Tuesday, 25 July 2017

Why cant Crowdcube and Beerbods be honest in the new campaign?


Beerbods raised £150k on Crowdcube in 2014. Their projections were burnt in 2015. Now they are back. But all of the previous promises have been forgotten; by them at any rate.


We have been waiting for the Beerbods campaign to go live in the hope that the misleading information in their pitch deck, which we saw last week, would not be repeated in the Crowdcube pitch. Well now it has gone live and it's very disappointing. We wrote them before here

The 2014 projections showed revenues of £1.1m for 2016 with EBITDA of £250k. According to the new business plan which we have seen, revenues for 2016 were only £517k(inc vat!). In the new plan the founders tell everyone that the losses for 2014/15 and 15/16 were 'planned'. Well not according to the documents you produced on Crowdcube last time.

This what the leading paragraph on the Crowdcube site states -

After securing £150,000 of investment via Crowdcube in June 2014 (our only funding to date), we made a small (planned) loss over the next two years as we invested that money in people, processes and product development. 

Projected revenue for 2015 was £1,079,172 and actual revenues for year 2015/16 according to their own new pitch document is only £431k (ex vat!). They even put this figure in the pitch doc with vat included. Why? OK so revenue is not the key figure, profit is....so -

Profit projected for 2014 was £28k and 2015 was £124k and real losses for the financial year 2014/16 (which has different dates and should be a better figure than the projection) were £42k and for 2015/16, £41k. That gap isnt too bad - although not planned as they claim; as the new CC pitch deck clearly shows.

Projected profits for 2016 were £252k with the actual profits being declared by the company for 2016/17 of £2k. So they have grown slower than they predicted - that's fine but why lie about it. The losses they claim they predicted were in fact predicted as profits. Revenues for 2017/18 are now projected as £800k odd(ex vat!) whereas in the lst round they were at £1.7m for 2016. At least something is growing but it's the gap in credibility. You should ignore all future projections.

Why cant we have a direct, open and honest comparison of what Beerbods said would happen and now what they have managed to deliver with some explanation of why. Nothing wrong with missing projections but trying to hide the fact is a problem. This might even be a good business given a chance.

How can Crowdcube be allowed to get away with it? Time and time again. And after some very vigorous denials and claims by CC's chief spin honcho LL, that any such goings on are very much in the past.

Now you know, you can invest reassured.


Dark clouds Gathering - Square Pie cant round its numbers



Square Pie, a restaurant 'chain', took out a Crowdcube bond for £655k in 2015. The bonds are the safe investments on this platform - aren't they?


In the documents presented to investors, which are declared verified by Crowdcube, the company said it would have 20 units operational by end 2017. Today at the back end of July 2017, they have 5 only - which is the same number they had when they promoted the bond in 2015. We warned you all about this company here 

Instead of small profits the company is still making good losses - over £200k for YE Dec 2016. It's well backed by equity capital but the cash looks a little shy.

It also appears the bond, which was issued at 8% pa over 4 years, has an administration and interest charge for the YE Dec 2016 of £120,559. It's not clear who is paid this as the interest for the year to investors would be only ~ £52k.

Reviews reveal the potential problem - the pies are not very good. Their restaurants range from 2.5 to 4 out of 5.

It appears that the new frozen pies in Sainsburys, placed in April 2016 - 


have gone down a storm and been delisted on the back of 3.1 ratings.
   
The company declare in the accounts that they will be back in 2017 for more gravy from the Crowdfunding train. Watch this space.

Monday, 24 July 2017

Where has Crowdcube's Monetaflex gone?


Monetaflex raised over £160k on Crowdcube in 2015. Now the company seems to have disappeared. No website no app, no nothing. Two founders, one just resigned.

This one was backed by a self described investment and SME/start up guru - Peter Gardner. Would love to hear from you Peter if you have any news on this company you promoted - see video here

The clouds on the horizon are slightly darker than this one. Dam is giving way.

So where are they?? Let us know if you do.

And so it begins. The Q is where will it end?


Yet another Crowdcube success closes. My Mate Your Date files for VWU.


I think it's fair to say we are having a bit of a crisis. The gathering of zombie and almost failed companies that have found funding via Crowdcube, is about to to break the dam. Time to runaway Luke before you get wet.

My Mate Your Date  raised £145k in 2014 and then incredibly £85k in 2015. By now their Crowdcube projections showed revenues of £3.5m and net profits of over £600k. 2017 had revenues of £10m and blah blah blah.....Time to wake up.... now! As far as we can tell the company never really did anything. To be honest it has to have been one of Crowdcube's worst ever pitches. Why did 132 investors sign up? Claims made by the founders were gargantuan  and equally as hard to check given they took place down under.

The 2015/16 funding round of £2m, given such a confident presentation by the mates; never happened. Well at least someone saw sense.

We warned you all about this earlier here when they set up a new app, Quinn. Just as hopeless as the first one. Despite trying to make Quinn and MMYD look like two different companies, CH confirm they are both run by MMYD Ltd and so both will close - or...........

It was clear from the last accounts to YE Nov 2016, that the end was here. All the money burnt and nothing to show for it. Their TW page has had no tweets since summer 2016 despite claiming over 8k followers. One of the founders was a 'chairman' of some important Entrepreneurs Organsation based near Washington DC. Etc Etc............... all verified by the CC Cupboard Dept.

What an incredible waste of time, effort, cash and tax payers rebates. All facilitated by Crowdcube, who took their commission and added the funding to their PR. Well done Darren and Luke - another award for your bulging cabinet. Funders of the UK's most facile business ever.

Plenty more to come. Staff required!!

Sunday, 23 July 2017

Crowdcube's stupidity is coming home to roost as Angel Alerts is liquidated.


The Fallen Angel or company no 08288031, Angel Alerts, is liquidated on another sad day for Crowdcube investors

We wrote about their absurd plans here


The Crowdcube projections show this company was making a multi million pound net profit by the end of December 2015. A recent filing of solvency shows tiny debts and zero activity - all shareholders shovelled into the waste bin.  


This is what happens when you let a platform run by people who have no clue what they are doing, present business ideas and plans to Joe Public with the incentive of being the backers of the next FB.


We have plenty more ready to follow. 

Saturday, 22 July 2017

Running on empty - what happened to Crowdcube's Franks Staks?


Franks Staks raised £83k on Crowdcube in 2015. It is closing under a VA. So what really happened?


The Crowdcube pitch was very upbeat and the company's products did have a placing in HN Knightsbridge - as far as we can tell. They made health supplements.

It has been treading water or drowning, ever since it raised the money, which considering what they told investors on CC's FCA licensed site, is a surprise.

Josh and David Franks, son and father, ran the show. They are described in the pitch headline as -

Josh & David Franks are a father-son combo. Josh is a qualified lawyer & David specialises in helping ambitious businesses achieve rapid & sustainable growth

Sounds good.

The pitch goes on - 

We are in discussion with or will approach Selfridges, John Lewis, Planet Organic, Ocado, NutriCentre, Wholefoods, Holland and Barrett, GNC, Equinox gym, KX gym, as well as franchise gyms e.g. Virgin, David Lloyd, Fitness First. Our connections at Virgin Startup are also looking to introduce us directly to Virgin Active, Ocado and John Lewis. We are also in advanced discussions with a leading chain of high-end London gyms. We also plan to partner with online retailers.
Seems none of this happened. This clip is taken from the 'Achievements to date' section of the pitch!

The unusual thing about this company is that whilst the shares were issued in October 2015 for the £83k, the YE June 2016 accounts show no record of any equity in the business except the standard £1. Losses for that year of £53k take the total losses to £75k or near enough the money raised on CC less the commission. CH here

It seems a little odd that a lawyer would not be able to issue an accurate BS for filing at CH - the one filed by Josh is clearly wrong.

As to the father's claim, well the evidence is there for us to see. If he cant run his own company, how can he advise others?

Of course none of the founders had put any money into the company. Well that is how it appears but as they didnt manage to record the CC investors, who the hell knows. You have to ask why the 101 CC investors didnt query the last accounts. 



Friday, 21 July 2017

What's in a word?


Black Bee are raising on Crowdcube. We wish they would be more honest; for the sake of the bees.


Im afraid this is something we go on about. Simply because Crowdcube continue to mislead their investors.

So, if you read this - 

Following the success of London Postcode Honey, the entrepreneurial duo has set up Black Bee Honey to offer a selection of raw, single origin British honey.

as the headline to a pitch trying to sell you shares for cash on a FCA regulated website, which only sells interests in commercial companies, how would you take the meaning of the word 'success'. We think it implies or even just means, financial success. Crowdcube is not a platform promoting social benefits, it is a pure investment for return operation - albeit not a very good one from the latter's perspective.

If you bother to check the facts behind this 'success' claim, then there is very little to shout about. Firstly there is no such company as London Postcode Honey - it was just their jar name. Put simply Barnes and Webb Ltd (aka LPH and the 2 founders of Black Bee's previous 'success') makes very little money - £3,000 in 2016. It seems to have very low activity levels. Nothing wrong with that per se but why dress it up as something else on a site that is supposed to be promoting only verified facts. Another CIC company they run has been closed with only dormant accounts. They have also used a different version of their names for this newco  - why? To find out about Barnes and Webb Ltd you have to dig around - not under the names given in the CC pitch. Based on this, they are valuing the newco at £750k. 

Isn't it time we had a fixed minimum standard for the information the platforms supply. So for example in this case, you cant use the word success unless there is something to prove it. And you must declare all your current and previous limited companies and other businesses with relevant details, so they can be easily traced at CH. Surely that's not too onerous for a website selling company equity for cash? Armed with the correct information, we can then decide if their past efforts were a success.

We love bees and spend a great of time making a home for them - that pic is in my garden. So people who also have the passion are good people - good people led down the wrong path by the platform no doubt. It just makes you look a little foolish and not very trustworthy. Which in the end will harm the bees. A shame.

Thursday, 20 July 2017

Not much to say about this really. Just more of the usual.


Crafty Nectar completes Crowdcube in 2 days with overdue accounts and an issue with their brand IP.

NOTE - Since publishing this, the company accounts have now been filed and the IP issue is, we are told, insignificant. Invest away if you believe the projected growth rates - which are so far completely unproven. IE 2016 revenues £40k (real) 2017 revenues projected at £80k(part real) then 2018 revenues over £350k. Also consider that the founders have only put in loans - £500 of equity and the invest £25 and get 25% off 'current boxes' seems to imply 25% off forever, which is crazy crazy.

Im sure it doesnt matter - very small company with overdue accounts. Nothing too worrying about that. You might think CC would want this to be in order before a live pitch is promoted on their platform but they probably didnt realise.

IP is maybe more of an issue. It only came up after a major competitor pointed out the possible problem when seeing the CC pitch. Subsequently, the founder has posted a vague explanation saying it wont change anything. But it is an issue.

Either a brand matters or it doesnt and this company seems to want it to matter. 

How could Crowdcube not have spotted this?

Why does the CEO not know about this and if he did, why did he try to conceal it. It doesnt inspire much confidence. Mind you, the pitch has already completed, so who cares.

More of the same.

Lovespace ups its game



Lovespace appears to have upped its game and has now crossed the 9/10 review line which for a consumer service, opens up the future for great things. We could only find two slightly negative reviews, both of which had been resolved, on the first five pages of Trust Pilot.

The company has come in for some criticism for its poor service levels but that now all seems to be in the past.

As one of Crowdcube's £2m plus raises (over 2 campaigns) this has to be good news for both.

Alongside this news, the company has just announced it has won a TV competition which will give them a free TV ad campaign as their prize.

Things have certainly turned a corner for Lovespace. Accounts out in September should reveal more.

Tuesday, 18 July 2017

Draper Esprit cover all exits


Draper Esprit are major investors in the Crowdcube platform. Now they are also investors in a Seedrs alumni Perkbox. 


Last year Perkbox ran a successful Seedrs campaign, raising a healthy £4.3m in equity finance through the platform. Nine months later they have secured backing for over $8m from Draper - an outfit that backed Crowdcube rather than Seedrs. 

As we all know Crowdcube and Seedrs are the two leading retail ECF platforms in the UK and are locked in to a winner takes all, rush to a massive ROI success. So this move by Esprit could just be because they see a great deal in Perkbox or it might have something to do with covering off their Crowdcube investment.

One thing is for sure. If Perkbox go on to become the next 'facebook' in investment terms, Esprit's help in getting them there is going to damage Crowdcube. 

Monday, 17 July 2017

Move along, move along, nothing to see here.


Ethos Global and its two founders are relaunching and rebranding before the old body is buried.


We received an invite today to the launch party for SOMA on 16th September - the new Ethos Global.

You may remember that Ethos was recently put into liquidation by the Courts for failing to return anything to CH. Apparently they are/were in dispute with their Cambridge studio landlords - a dispute that they or CC failed to declare, when they raised over £700k on Crowdcube in early 2016. 

Rumours abound about what might have happened but we can confirm that the Cambridge studio, which was the mainstay of the CC pitch and the business, closed very shortly after the CC campaign completed and then Ethos opened its London branch but used a different company. This company then became SOMA. 

According to more rumours the newco has taken all of the CC shareholders on board after Crowdcube, who had set this deal up using a nominee structure put them under pressure to sort out the mess. This is the company with the party.

Various questions arise.

The liquidation of Ethos Global, which took £700k off investors, has not started yet and nothing has been filed at CH except the Court Order. Clearly there have been some interesting goings on and it seems likely that someone is going to want to know the detail. Were there any o/s creditors for example, what money paid for the opening of the London studio and how did it legally change hands, how can the shareholders in Ethos be offered a deal ahead of secured and unsecured creditors? CC shareholders bought into a business with one successful unit but are now being offered shares in a company with the first unit due in two months. Is all of this legal? Was any of it planned? 

Anyone out there with any answers please get in touch.


Thursday, 13 July 2017

TableCrowd trying to make a miracle

TableCrowd are currently on Crowdcube trying to raise £400k. Its not working. But they have come up with a cunning solution. Fabricating a miracle.


In an email we have seen, the company is privately offering their most loyal customers a special exclusive deal - if they invest on the CC platform in the next 24 hours. Remember its only open to their regulars; or so they say

Invest around £400 and get six months free dining and invest over £600 and get a whole year free. 

Well, how does that offer to exclusive customers, stack up with the idea of open democratic investment? Clearly it must be a breach of Crowdcube's T&C; if they have any. Some investors are being offered a deal, way better than others  - privately off the platform. Maybe it's common CC practice and this is the first time we have been advised about it. In this instance the company actually tells recipients to keep the offer to themselves - thereby actively taking part in the deceit. 

We have also been informed that this is not exclusive to loyal diners. Its been sent to at least one person who has never used the service.

So what happens to CC investors who invest but have not been sent this email - it appears they dont get this special deal. Is that fraud?

A little sad and typical of the sort of stuff that goes on regularly on the Crowdcube platform. Time for a change? Certainly. 




Now you are really taking the P

The Telegraph or Crowdcube PR Dept, have come up with this nonsense from Luke Lang


http://www.telegraph.co.uk/technology/2017/07/12/crowdcube-hits-250m-investment-milestone/


Firstly the claim is that - 

The milestone comes after a number of businesses funded through the site have been sold, leading early investors to pocket huge gains.

'Massive gains'....'a number'.....? They say that Ecar Club made a 3 times gain for investors - we dont think that's true but even if it were, that makes two exits with modest gains and many failures and scandals - not mentioned of course.

Apparently, the Telegraph goes on, 17pc of investors have received a return so far. What the Telegraph fails to explain for some unknown reason, is that much if not most of this 'return' is made up of the CC bond issues - ie interest paid on the bonds, which are of course loans and nothing to do with equity investment. Which is what this article is about. The bonds get no mention anywhere. Neither do the overwhelming number of losses and scandals that Crowdcube have facilitated.

Mind you, as always with Luke, its not what he tells but what he leaves out that counts. He says that 17pc of investors have received a return. Now that implies that 17pc of investors are better off but it doesnt actually say that. You could be one of the 17pc that has received interest from the River Cottage bond for example and still be way down on all of your other CC equity investments. You would still have received a return. He does this regularly. 

Read the article, it is clearly about equity funding. Then do the maths. There is simple no way that the returns to equity investors makes up 17pc of the total number of investors who have thrown money at this platform. We havent run the figures but we'd expect that of that 17pc most if not nearly all is made up from bond holders returns. You decide if that's an honest way to put out your information. 

You have to ask why would one of the UK's most prestigious papers buy this obvious nonsense? Well you can only put it down to stupidity or ignorance or both. Its very damaging for the battle against AltFacts but the truth will out despite Luke's best efforts to conceal it. 

You can smell Crowdcube beginning to get a little desperate. We feel very sorry for the Chinese man who has apparently recently invested £1m in the company. Maybe an issue with the translation?




Could this happen?


There is a tiny whisper, almost inaudible, that one of the major ECF platforms has eyes for another one. 


Seedrs are about to embark on a new funding round and rumour has it it will be a big one. Big enough to take down Crowdcube. So they say.

Well we dont need both and of the two, Seedrs is the more sensible option - it's not flawless but it is better. Far fewer disasters than Crowdcube, less scandal than Crowdcube; generally a better bet all round.

Here's how you can help. If this is a result you would like to see and god knows we all want Crowdcube to fold, then start voting with your feet. Invest in Seedrs pitches or one of the other platforms, but avoid Crowdcube. Without the ultra loyal shareholder investors I think CC would already be struggling. Cut their supply of investors and it's over. Quite apart from the obvious logic of avoiding the Crowdcube model with all its flaws, you might even make some money. It's in your gift.

Two of Seedrs senior management team started following us today, so welcome. Better late than never. 

We still think your model has issues and the whole sector has been set up on flawed ideas, but this outcome would go partway to getting things right.

Wednesday, 12 July 2017

Ovivo Liquidation reveals funny side of collapse


Ovivo raised massive sums on Crowdcube and lost even more shortly afterwards. Deep in the final statement by the liquidators, we found something even a horse could laugh at.


Ovivo was the fist big disaster for Crowdcube - there have been many since.

It is finally laid to rest having lost over £1.5m of people's and creditors' money.

Thats not the funny bit.

In the initial report , the administrators said they hoped to be able to return 18p in the pound to unsecured creditors. They duly went about the job of finding buyers for the company IP etc. 

Well they didnt do too well on that score. The final report states that the expense of finding buyers and chasing them up more than spent the 18p in the pound, so now creditors will get nothing. 

Fatuous?

That's the funny bit. 

Our views on the real problems with ECF and some solutions



Here are our thoughts on the fundamental problems with ECF as we run it in the UK and some suggestions.


1. You cannot put a brand new technology into an old system and expect them to work together in harmony.

In this case the new technology is ECF and the old system is the way we run the accounting, tax and company systems in this country. ECF was and still is a ground breaking new way of funding businesses, brought about by the connectivity of the Internet. Its very fast and very direct, completely the opposite of the old ways. Its far more open to abuse than the old system and its needs to be regulated - not by the old system , which cannot cope, but by a totally new regulation which in turn uses the Internet as well. It was ever thus, from the start of the Industrial Revolution - new machines simply dont fit into the old ways. How can they?

2. ECF is in effect a non market market. 

The current system with raising funding via ECF, uses ECF platforms and precludes the real market. The LSE doesnt go around setting company prices  - it lets the market and so called experts do that. We need a system for ECF where the share price and therefore the value of the company is set by the market not the platform in cahoots with the founders. This would certainly help to prevent the ridiculous over pricing we are seeing currently. ECF platform talk about their businesses bringing democracy to business funding when in effect they do almost the opposite.

3. More rigorous regulation will mean higher up front costs for companies. We dont want that.

So the answer might be to tweak the way the rebate system under S/EIS works. At the moment all of this rebate is handed back to the investor. Why cant we look at a way of taking at least part of this and using it to pay for better due diligence and company reporting? After all S/EIS was not set up to help line the pockets of foolish investors. It was an attempt by Government to help funding into SMEs. At the moment it only helps investors directly. We need to shift the centre of emphasis.

4. By funding poor business ideas run by poor managers on abysmal plans, we are throwing away a great chance.

Surely for the longer term gain, we need a better system of analysing who gets S/EIS and in turn who can use ECF. Nobody is going to gain by having the public invest in whole raft of dead end businesses, possibly set up with the best intentions. Best intentions dont cut it in the real world. We have certainly seen enough business plans and their results since 2011 to strongly suggest that too many hopeless cases are getting through the net. The holes are just far too large.

5. Sanctions - they need to mean something.

There is no point in issuing FCA licenses if the FCA is never going to make companies adhere to their regulations. Ban all third party licensees from taking part in ECF.

6. A more coherent longer term model

The UK's largest ECF platform simply gets the money in and then leaves the room. Their follow up is merely for their own PR. They actively downplay their disasters and often invent success. That is not the way forward.

ECF platforms and some now do this, need to reflect on the ASSOB model. It should be a much longer term relationship. Platforms could learn from the failures instead of excusing them, if they took more time with the companies. They could also help companies with an advice service if they employed the right people. Sadly for most that isnt the case right now. 

 

Tuesday, 11 July 2017

Fourex outperforms its Crowdcube projections by £8m


Fourex operate money conversion machines. It seems they may have forgotten how to count. 


Fourex raised £670k on Crowdcube 2 years ago.

In light of the fact that Jeff Paterson, a cofounder of Fourex, sadly died of cancer recently we have removed this article. RIP


Monday, 10 July 2017

Just how bad is the Ethos Global Scandal?


Ethos Global, forced into liquidation by the Courts, and their funding facilitator Crowdcube, are trying to dismiss the closure and shenanigans that led to it, as nonsense. What really lies beneath the surface may be far worse then we thought.


Cambrdige has a bit of record with Crowdcube. There is of course this on going case but not long ago there was the confirmed fraud of the Solar Cloth Company. The SCC was run by a Cambrdige resident who was using various different spelt names to hide his business failures - a simple fact that the Crowdcube DD department missed. Result - the loss of £1m of investors cash plus a whole pile of creditors being out of pocket. Only two companies made any money out this farce. They were Crowdcube with their commission and the insolvency practitioners.

Now we have another Cambridge farce; Ethos Global. The truth is proving hard to come by but a recent source told us, that the scandal is far worse than it appears. The company was apparently already struggling before Crowdcube and was in dire straights. That's not all the source said but the rest needs some verifying. QED - when they approached Crowdcube and were vetted by them , they were already in a lot of trouble. If true, can Crowdcube really be allowed to keep their FCA license? What is the point in having any regulation if it can be so blatantly abused with no sanction. 

As with the Olympics, where they should just let it be a free for all and see who blows up first on the 100m, no regulation is better than regulation poorly enforced.

We think that Ethos Global marks a new low in the many lows of the development of ECF as a credible long term channel for SME funding. If not here, then where will the FCA draw the line?

Sunday, 9 July 2017

On a great day for Donkeys, Nicola Horlick is stranded all alone at Glentham Fund, as other directors move on.



We have a file on Glentham - its been a long painful journey which started on Seedrs. And is not over yet.


All stories here.

Now we find out that Nicola Horlick has been left at the helm, all on her own, as the latest big hitting director falls overboard.

I think we all know what happens next. Bye Bye.

Crowdrating PR spins fairy tales.


There is a certain delicious irony for a rating company with FCA registration giving out what can only be described as misleading PR about their own success. Crowdrating, run by some nice ex city folk in the West Country, has launched a new PR push with a story in Altfi. Story being the operative word. Altfi might consider changing their title to Altfac - as in Alternative Facts.

The article has the bold headline - 


CrowdRating demonstrates it can help investors improve their crowdfunding success rate.


Put simply - it does no such thing.

In the article, which is clearly advertorial, Crowdrating claim that they can help investors make better decisions about their ECF investments. We were curious as to how they would do that.

Well it turns out that they rate pitches into Gold Silver and Bronze. They now claim that 96% of their Gold ratings or 24 out of 25, rated a year or more ago, have gone on to see success - this being measured by positive news, exceeding projections or raising new funds (ones that were in the original projections) at an increased value.

They leave us with a very useful top 10 of their Golds - 4 of which were on Crowdcube. Actually one of these was also recently on Seedrs but they dont seem to know this. We cant really comment on the Syndicate Room or Seedrs pitches as we dont have the data. But the CC pitches are a useful guide to their overall accuracy.

So its really quite simple - do their claims stack up?

For their Crowdcube pitches, they receive a Bronze at best. Why? Well we have no idea, it's not that difficult to get it right but of the 4 they list in the top 10, not one could be called a success. 2 have failed to meet their CC projections, one has raised new cash in a down round which was not in the their plan and another simply hasnt done much in commercial turns. So how can you claim these are all a success. It stretches the word to breaking point. 

Witt Energy - raised on £2.4m CC and were always open about playing the long game. They have not gone bust but there is nothing to really suggest they are a success yet or even heading that way. They have made far greater losses than projected for YE2016 - £430k against CC projections of £240k. Whilst this isnt necessarily an issue longer term, they are about to embark on new £2m raise, so that may tell us more. They were due to bring home revenues of £1.8m for YE August 2017; where any of this will come from is not at all clear as they dont seem to have anything to sell

Inyourstride - raised twice on CC, tiny amount. Missed 2016 figures by a long way and have now raised far larger sum on Seedrs (Jan 17) at a lower valuation. How is that success? It may turn out to be but its way too early to tell now. If anything, a down round suggests the opposite for investors. 

Simply Cook - did exceed CC projections (ie smaller losses) but we think this is due to lack of activity not success. Raised another ~£1.5m on Envestors this year which was not in the original plan. Envestors website says the pitch is on hold but CH records the share allotment. All a little odd and it makes a valuation per round difficult.

Empiribox - Again another Co 'on target or better' but this is due to the failure to raise a planned £600k in 2016 - ie their last accounts show a bit a cash crisis. 

If the 4 in the top 10 are misleading, then what does that tell you about all the others. If you remove these 4, then the percentage falls from 96% to 80%? Who knows where it would end if we checked all the other CC pitches in the 25?

If I was you, Id do my own research. We dont give advice but if we did, it would probably be.............................. feel free to finish this off!





Beara Beara complete U turn and extend their Crowdcube pitch


Beara Beara is on Crowdcube raising more money. Things have not gone quite to plan since the first raise - do they ever. But you wouldnt know that to listen to the founders.

In this raise, there has been a very poor reception. Unlike most CC pitches, investors have commented on the over valuation and the failure to meet projections. Stalwart in their own defence the founders have hunkered down and sat it out until the time ran out....well almost.

Just 5 days ago the CEO was asked if, as a result of the poor response, he would at last reconsider his valuation before time ran out? He responded with a blast from his six shooter, that really this wouldnt be fair on existing shareholders - you know undervaluing their investment! As this is a CC pitch, its fair to assume that this nonsense is advice CC agree with, even if they didnt supply it. 

So just 4 days later, The CEO makes an announcement on CC that they are extending their pitch for another 14 days - apparently he has been so busy overseas creating new leads, that he hasnt had any time to spare for the campaign. Well you know that's total BS and if it isnt the guy shouldnt be running a company. Hidden at the bottom of this update is the reduction in the valuation. Like it's some sort of bad idea that he's trying to hide. 

Firstly the business has always been overvalued. It still is, even with the reduction. Trying to hoodwink investors by telling them something and then reversing that very decision 4 days later shows a total lack of respect. It also shows a massive chasm in any business acumen. Trust is important and you cant have any here.

The leather might be good and the help the business provides for poor Bolivians is admirable but the business management is lame. Why are CC not providing this guy with some sound advice that would allow him the best chance of making something of his endeavours. In our opinion you would be mad to invest in this, even at this new value, simply because the founders have no clue what they are doing.

A final note - one problem this underlines, is that if your first pitch on a platform like CC is over valued, then you will struggle further down the line with any new pitches  - unless you can admit to a downround or you have exceeded expectations. Neither of these options appear on the CC platform. Valuations are agreed with the interns at CC - which rather illustrates our well made point, that if the management of Beara Beara is lame, the management of Crowdcube are donkeys. No offence to donkeys.

Friday, 7 July 2017

Ethos Global could have pitched on Crowdcube whilst withholding critical creditor information


Deeper into the swamp that was Ethos Global, a little birdie has told us that their Cambridge studio closed (allegedly) because they owed over £100k in rent - the bailiffs moved in. 


We dont know if this is true but it makes sense.

So whilst Crowdcube were lauding the massive success of Dr Theo and his wife in Cambridge, they were (allegedly) all of the time sitting on an undisclosed debt of £100k plus. You might ask where were the Crowdcube DD dept? As usual out to lunch. 

Surely they cannot survive yet another mess like this?

Tuesday, 4 July 2017

Ethos Global finally liquidated with extreme prejudice.


Ex Crowdcubers Ethos Global have finally been closed down by Court Order. Not filing accounts for almost 2 years and setting up new companies instead, shouldnt and we hope, will not, pay. 


We have written about these guys a few times here - it's taken quite a while to see them finally closed. But as the new studio in London is still being operated by the same people but just under a new name, where is the justice in that? 

The Court Order is still being filed so we may have to wait a day or so to find out what will happen to 388 Crowdcube investors and £709k they invested - all via a Crowdcube nominee acount. Money that paid for the new London set up. You may have a good idea from our past stories how this one will end. 

However this one looks a little juicier, given the various company set ups and shenanigans that have taken place since the Crowdcube raise. Of course Crowdcube have no idea this has happened - their Ethos page still proclaims the success of the new public launch of their new London site last year. Which is now owned by Soma London England, which is in turn, owned by the same directors who took the £709k via Crowdcube and immediately closed down the Cambridge studio. Oddly in January this year, Ethos Global filed a raise of equity finance, but the filings revealed there was no money involved, just an issue of 30m free A shares.

The new business - SOMA - School of Mindbody Athletics (!) is due to launch in September this year according to their new website http://soma.house/. They continue to remind people that they are a couple of Cambridge graduates - clearly not in English or Marketing. We simply do not believe that they will be allowed to get away with this.

Soma website appears to be owned/operated by US based Mindbody which also has a connection to Soma Fitness based in California. At this stage we gave up.

The newco has apparently TM'd its SOMA  - fact is TM means nothing and Soma is already taken several times  - their version has no application or recorded registration. 

Makes you want to cry. Makes you really want to get hold of CC and ask them just what the fridge they think they are doing.

We have asked the company several times for a comment and will try again, but the only reply we got was a no comment. A recent email to the same PR person was auto sent back as he has seen the light and left.

'You bet ya big time' gargled Grey fish.

PS - We have still had no response from the company or CC. But people we have spoken to in Cambridge said that the Ethos studio there was always full  - which is surely a sign of a successful business. So why did the Cambridge studio close suddenly just after the CC raise and why is it still vacant? Likewise why start newco's after the CC raise and have them running the now (we assume) busy London studio??


HAB's new accounts are a little off target - but for once we think this is progress.

HAB Housing, Kevin McCloud's day job, has posted further losses for YE 2016 but things are moving on and the company is at least gaining traction. It raised just shy of £2m from 640 investors in 2013 on Crowdcube. Targets have been missed as the company would otherwise be well into profit but awards are flowing and momentum is building. It is better news than any other CC company can provide. 


One interesting development is that the company is looking for ways for its shareholders to buy and sell its shares - due to multiple requests, so they so. It seems unlikely that they are getting multiple requests to buy their shares, so one assumes it is to sell them.

Do they know something we dont? What is under the covers?

Saturday, 1 July 2017

Crowdcube change their system to protect bad business plans



Lets face it - Crowdcube cant do numbers. Or rather what they do with numbers is interesting. Now they have changed the way businesses pitch on their platform so they no longer have to produce a 3 year basic projection. Now they are trying to hide these numbers under the carpet.


Why?

Well very simply because they hope this will stop us having this information to compare with the company's real results a year or two later. You remember our ongoing research into 400 CC companies has revealed that 95% have to date missed these numbers by quite a margin.

You would have to say that this is pathetic.

Instead of sorting out their own very obvious problems, they attempt to block legitimate criticism by hiding the real figures.

Well boys it wont work. We get most of our information from people who have downloaded the full business plans, which do include projections. We also have other ways of finding things out - what you might call an inside track.

It is yet another illustration of all that is wrong with this company. The sensible option would have been to sort out the numbers, not paint over  them. Open and transparent they certainly are not and the bad news pipe work in the sewer below their offices is at bursting point.