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.
I asked them to respond to this thread on the crowdcubes Beerbods forum. I received an email an hour later from Phillip Baker at crowdcube stating that I had broken forum rules and the thread was deleted.
ReplyDeletethe True Face of CC democracy in action. The blog started because they kept on banning my legitimate Q's on the forum.
DeleteCrowdfunding valuations are ridiculous and bear no resemblance to reality. Here is what Beerbods say about their supposed value
ReplyDelete"Our valuation is based on projected EBITDA (10x) at the end of 2021 and valuations of companies of a similar size in similar industries (retail, subscription and drinks). We believe it fairly reflects our unique position in this fast growing, high potential industry."
They are asking investors to shoulder most of the risk and only offering 10% of the equity which is far too little and won't see any of my money going in their direction. They need to offer equity at the 2017 valuation as it is 2017 we are investing in. I know I have to accept some risk but with that I want real rewards.