Wednesday, 19 September 2018

Mr and Mrs Smith offering massive rewards to achieve funding on Crowdcube - is that good business?

The Mr and Mrs Crowdcube campaign is massive success - £4m raised on day one - most of it in private mode. So what about these rewards?

This campaign is offering all serious investors a 4% discount on spending as a minimum. But if you choose to invest £25k you get a load more. You get your £1000 off the next holiday (the 4%) but in addition you get a permanent discount of £400 pa forever. So lets assume you are a healthy 30 yo and you live to be 85 and go on hols each year (well at least one), then you might expect to get £400 X 55 years as a discount - or £22000. Plus the £1000 that makes £23000 of the £25k you invested. Lost opportunity costs and lack of ROI aside, that is some deal. And of course its not cash - its a discount against expenditure with Smith. But it's still a great deal.

It begs the Q, how is the company going to make a real ROI when it is handing back so much cash - are margins that great and if they are, it would suggest room for undercutting by competitors. And of course there is always the consideration that if the company were to fold, this would disappear.

And then on top of all of this - you get 30% of your investment back via EIS. So in effect a £25k investment now will give you a one off £1000 rebate against your next Smith outing, £7500 off your income tax bill, and £400 pa forever against future Smith outings. The usual vague warning about rewards valued over £1000 and EIS relief is issued. Beware.

So if the total number of £25k investments reaches say 100, it will cost Smith £100k initially and then £40k a year to service. Over 3 years that's £220k. At 8% you could borrow ~£1m for that, retain equity and lose the £40k pa liability. Isnt that a little crazy as a business proposition?

It is little wonder that their 1.5m million members have backed them - well some of them have. 1200 investors on board for £4m suggesting nearly all have taken up the £2500 or better. Or maybe the 1.5m is inclusive of a chunk of not so active members?

Tuesday, 18 September 2018

Bidstack delivers 5X return for 66 Crowdcube investors.

We are not entirely sure what this means for the 66 Crowdcube investors who put in £130k in 2015 at a valuation of over £1m.

Addendum - We got this horribly wrong! Apologies, my stockbroking career was short and ended when I went to watch the Grateful Dead in Buffalo without permission. So it now appears that the CC shareholders exchanged their shares for new Bidstack plc shares at a ratio  - see comments for details. 66 CC shareholders who invested £130k in 2015 have seen a ~return of 5X if they trade their shars out at 6p - current price is under 6p. Which is good  - its not quite carling but it is good. 

We wrote about them before here - not in very glowing terms. Maybe some hat eating to do but the figures will only make sense after tomorrow. 

More to come. Anon if you want to post a polite comment on Bidstack this is the place to do it - not on a post about something completely different. Thanks.

PS - doing a little bit of casual digging - it appears that the smallest SHs in Bidstack Ltd - who came on board around the time of the CC completion, own 122 shares each. The minimum amount that you buy on CC is £10. But the newco IPO share price is 6p. So 122 shares would now cost £7.32 - which suggests that CC shareholders are now considerably worse off than they were in 2015. It's not scientific but I think the theory is correct. Anon would you like to comment?

PS - Ann Gloag - one of Scotland's richest women, has purchased over 3% of the new Bidstack plc today - a transaction involving almost 6m shares. We assume this part of the £3m plus IPO.  Is she a good judge? Price currently struggling at around 6p.

Crowdcube funded Zapaygo continues to baffle.

Zapaygo raised £450k on Crowdcube. They had a signed 10 year deal with NEC Group for their payments system. This all looked very promising.

That was a while ago. We have written about them before - here

The accounts for YE August 2018 or 18 days ago as I write, are out. The company is still pre revenue  - well its accounts show a revenue of £5 - perhaps a refund on paper clips? Losses for the year were just over £1m. Losses for 2017 were £336k. 

Various on line reports place Jamie as a highly successful 18 YO entrepreneur who was shortlisted as one of the Top 20 Young people in the World. He is now aged 26 and a world leading authority on entrepreneurship. We could find little evidence of any of this; just PR. His past companies have done little according to filings. He has one active company listed at CH which is dormant according to accounts filed for Oct17. According to his own PR, he has delivered speaches at over 500 evemts in over 20 countries. Again there is little evidence for this on line. We did find one where he talks about how we spend a third of our time working - as if that's ground breakingly interesting.   He has a Queen's award for being a young success so it must be legit  - we just cant find it. Bit like Jamboy who has an MBE and the Virgin backed Gas Sense whizz kid George Edwards,  who is now repaying all the backers on KS - or is he?

Odd times.

According to Zapaygo - pronounced Za - PAY - go  - they will easily reach their $2m threshold for this ICO and will in fact easily reach their $8.5m initial target. Their contract with NEC group will flourish once they have arranged (negotiated) for the existing systems to be removed and their failure to produce the promised revenues to date is by design as they now have much larger plans. Who would have guessed it.

We look forward to writing up this success.  

Two Crowdcube brewers struggle to deliver a full pint.

Seven Brothers Brewery and Bellfeild Brewery are both raising new funds - having come nowhere near to their Crowdcube projections. But they dont tell you that bit.

We have been here before  - in fact I think we have been stuck here for several years. When will platforms be forced to declare the full facts about previous raises? Im reminded of a mate's joke when he was served a short pint - he'd say to the barman - '' Do you think you could fit a double whisky in there?' To which the barmen would smile and say ''yes of course' as he reached for the Walkers. 'Well then' my friend would say 'stop passing that off as a pint and fill it to the top with beer'. We wouldnt put up with short pints so why do we put up with short information?

Im fine with companies missing projections - it happens. Although when it happens all the time it suggests something is wrong with the way they are creating the numbers. But then to pass off the actuals as progress, when they are only half of those recent projections - something is not right. You cant tell investors that your company is in good health when your revenue if £1m as opposed to the £2m you wanted. That is simply crazy. 

Both of these brewers know that have come in well short of the lines they set to gain investment previously. But in both cases that is ignored. Existing SHs will know the facts (well some will) but new guys who missed round one, will not. And they are being duped - with the help of the platform. They are being asked to believe the new pitch and the PD that goes with it. Yet they are not armed with the important information that these companies have failed to deliver on their original plans. In fact the picture painted is the exact opposite. 

And what of the valuations. Well Seven Brothers has now put itself out at £8m pre money (they are raising £500k). Back in 2016 it was valued at under a million when raising just £170k. Since then they have delivered around a half of the revenue they set themselves  - according to their own numbers for 2018. Projected profits for 2018 of £500k have now been invested in this progress - so that means losses. They also talk of a new trading platform so investors can sell their shares. Come on guys - who is going to take that seriously? 

We have the real figures and you would be surprised just how far away these two are from them. So be aware of that before you invest. It is entirely possible that teething problems have now been ironed out and they they will go on to be successful. But it helps to know the facts. 

Saturday, 15 September 2018

Brewdog struggle to complete their £22m on Crowdcube despite much fudging of figures.

We all like a nice fudge cake. But there really isnt any room for one in financial reporting. 

The current Brewdog raise now live on Crowdcube is highly misleading when it comes to the money that is actually being raised by the platform; as opposed to Brewdog's own pitch platform.

With only 15 days to go, the target has not yet been reached and by our calculations, using, it has to be said, the dodgy information supplied by Crowdcube, they have only raised ~£392k on the platform. There is another ~ £150k to go.  For Brewdog on Crowdcube that is astonishing. Maybe the lights have finally been switched on and people can see that this is a rich valuation at £1.8bn, from which its hard to see a good return.

It would have been so much more honest and upfront if the brewer had opted for a simple £500k or £1m raise on Crowdcube - no fudging just a straight number. Instead they have stated a target of £22m of which the company has on its own, raised a figure that changes each day as the brewer has kept its own raise running. So it is almost impossible to see what they are doing on Crowdcube.

The forum is full of queries about how this is laid out and how that valuation is justified. It just smacks of dishonesty and if this fails to reach £22m (which is unlikely as this is BD) it will serve them right. Whatever happened to the real punks of brewing?

Monetaflex calls it a day and is dissolved

In what is becoming the norm for Crowdcube funded companies, Monetaflex raised £165k on Crowdcube did very little and has now been dissolved.

We have written about them before here  . It has taken well over a year for the final closure - a year in which investors have not been able to claim their loss relief. The CEO has moved on to create a similar business without those burdensome SHs.

Plenty more in the queue.

Friday, 14 September 2018

Crowdrating and Businessagent join up.

We will be honest - we dont rate either of these outfits. So maybe teaming up is a good idea. Both fail to get to the real information about companies using ECF as they both use quasi AI, which has been poorly created and skates over important information.

We wrote about this over a year ago - here

BA is now rebranding - or tinkering at the edges. It makes large losses. Its information is pitiful. It claims that Crowdcube for example has had 50 failures and 6 successful exits. Well that simply is wrong - it is in the right ball park and that pretty well sums them up. If you want information in the right ball park - a very large ball park - then they are for you. If you want accurate information on what is really happening, then forget it.

By putting two poor business together, I suppose you will end up with one larger poorer business. Time will tell. It is unfortunately exactly the opposite of what ECF requires right now. We need more clarity and more information, that is precise and accurate. We will be delivering this here over the next few months.

Watch this space. 

Directors of Escape the City take their advice and jump off the loss making Crowdcube funded platform

Following yet more disappointing results for what used to be a Crowdcube gold plated success story, 3 out of the 4 board directors of Escape the City have left this month. 

Escape has never made any money  - just losses. Now much of the cash is gone. Whats next? Well from the recent departures one might guess either closure or rebirth. 

Thursday, 13 September 2018

Crowdcube success Wrap it Up look to raise another £500k on falling sales and closed restaurants

Wrap it Up have raised £760k on Crowdcube. Now they are looking for more cash as their business struggles to get even close to the projections used to sell that equity. Another typical day at Crowdcube, you might say. 

We have written about these guys before here

January to June 2018 sales fell back from the same period in 2017 - annualised, the revenue for 2018 looks likely to be around £5m. Projected revenues for the company back in 2015, showed £6m for 2017 and at a growth rate of 50% pa would have brought £9m for 2018. So someway off reality. 

We wait to see what valuation they come up with for this new raise but it has to be lower than 2015 - unless of course they use Crowdcube. 

Without the money, it looks like a bumpy ride for the company and its investors. Debt is at over £500k. As they cant really provide much in the way of hope for 2019 and beyond, why would anyone put more into this outfit unless the valuation is sensible? The company made a £230k loss in 2017 and with turnover down in 2018, the best bet is for a similar loss or a greater loss for 2018. 

Wednesday, 12 September 2018

Gohenry limp back to Crowdcube for more cash please

Gohenry raised over £3m on Crowdcube 2 years ago  - now they are back for more. So how is this kiddies bank control done in the meantime?

Im with investors here - this idea seemed good to me, as many of your showed in 2016. But they promised a lot when they sold you over £3m in shares. Have they delivered?

If you read this typical nonsense from Samantha at Crowdfund Insider, then you would think they have blown their targets to pieces -

But as you should know by now, anything written by Sam is nonsense or certainly poorly researched. Maybe she really works for Crowdcube Insider?

Gohenry said they would be turning over in excess of £15m by 2018 and £37m by YE March 2019. Well according to Sam they reached £8m this year. Whoops. 

So can you expect a downround on Crowdcube? Well common sense says yes, but it is unlikely. Crowdcube doesnt do common sense.

Tuesday, 11 September 2018

Chilango cut losses to £1.4m

Chilangos may have turned a corner. Losses for YE March 18 are half last years and some of the dead wood has been removed as part of that loss. New ideas have been launched. The next 12 months will be critical.

Of course you can kiss goodbye to all the Crowdcube projections and promises of large profits by now. This has been a company on life support. The 50 restaurants by 2021, as per Crowdcube's 2015 pitch when they had 7, looks a little far fetched with the current number on 11. The £20m turnover for the last year is in fact £10m. This is what an immature Luke Lang had to say about it in 2015 when it raised over £3m against a target of just £1m. The proposal actually turned out to be nonsense.

“As before, Chilango has excited investors with the passion and high quality of its proposal and Eric Partaker’s video pitch particularly grabbed people’s attention as it was so vibrant. Also, the company is backed by a lot of top execs from high profile brands in the hospitality sector and that’s always reassuring for our subscribers.”

Recent funding suggests that the valuation is around £42m whereas in 2015 investors were persuaded to buy at a valuation of £43m post money. There has been some dilution since 2015. 

The company reports that the £2m Bond it issued via Crowdcube in 2014, is coming due for repayment but that a large percentage of holders have agreed to extend the date on for a few months by which time the company has plans to issue a new bond - good luck with that. 

Still the patient is alive and showing some signs of life. 

Who knows what to believe when it comes to Cauli Rice

The latest news from Cauli Rice, now Fullgreen, is fantastic. Literally, considering the atrcocious reviews the product is still getting.

Cauli is about to be all over Australia, it is all over the USA and the UK factory cant cope with the order volumes. That is fantastic news. It raised various amounts on Crowdcube over the years.

So we thought we would take a look at reviews - which in the past have been poor to put it politely. Well the last review on Ocado is 'Horrid' from a week ago. This accompanies various other descriptions in the same vein with the occasional 5 star. Overall rating under 3/5.

Another of their products on Amazon and in $, so assume its reviewed by US customers, gets lower marks.

Sainsburys last two reviews are both one star and make amusing reading.

Waitrose - 5 reviews 2 five star and 3 one star. Not great.

So how is it possible to be going Fullgreen ahead with capacity management problems when people appear to hate the product. We have no idea.

Crowdcube acquire a software package, Supdate, to mend a cultural breakdown.

When you have a problem that needs fixing, the first thing to do is to identify the source of the issue. Sticking a plaster on an open wound may hide it from plain sight, but it wont heal it. 

Crowdcube have a reputation for appalling shareholder comms - that is not us speaking but the shareholders who contact us to find out what has happened to their companies. Being given, we have no details on the deal, a software package that sends out automatic comms will not help them. They have to want to send real information on the companies they help fund - and they really dont give a fig after they have received their commission. 

We have also been told about a recent instance where Crowdcube actively slagged off another major rival, with what appears to us to be dubious facts, in order to take away a potential client. That is highly unprofessional as Im sure most readers would agree but is much more in line with the Crowdcube ethos than reporting to shareholders. 

Of course PRinging this news of their recent 'purchase' to the world may well ease the pressure the FCA must now be putting on them for their failure to keep shareholders informed and the atrocious ongoing record for failed businesses.  

Monday, 10 September 2018

Righteous - one of Crowdcube's shining stars - hands the reins on.

Righteous has been handed over to new management. The Harris's, who founded the company and then founded Cauli Rice, both funded via Crowdcube, have eventually given up on the salad dressing brand and resigned from the company. New directors have been appointed. 

Crowdcube shareholders were, last year, given shares in Cauli as an alternative and in the run up to the virtual collapse of the Righteous brand. Listings that were the powerhouse of the initial sales proved only temporary as the big supermarkets squeezed the salad dressings off their shelves or created their own brands. We said this would happen way back in 2014. 

What the Harris's failed to grasp was that initial listings in these massive chains are of no use - they slaughter margins, put massive strains on logistics and eventually wither and die. Pull through sales are what you need and without then the supermarkets will delist you in the flick of a button. That is exactly what happened with Righteous. What was promoted on Crowdcube as the Holy Grail turned out to be the worst move they made. 

We really hope they dont make the same mistake with Cauli, although they have gone down that track again, so only time will tell. 

Sunday, 9 September 2018

Dreams are made of this - Lakes Distillery launches PR IPO management

The Lakes Distillery Co raised £1.6m on Crowdcube at the end if 2017. They will be an English Whisky producer - given time. Now the rumour mill is in overdrive as they release both PR barrels - an IPO before the end of 2018.

The previous PR batch - the investment by the Finnish giant Eera with the issue of 2.5m new shares seems to have evaporated - which can happen with distilling. Recent investments are on the very small side although the valuation from a year ago appears to gone up 10X . It is difficult to tell.

One thing is for sure, the company has a habit of slightly exaggerating its progress - listings with Tesco for example turn to be a local listing in only 19 stores - although of course this may expand. YoY revenue growth of 80%, as stated on Crowdcube, is now reported in the FT as 43% and if you do the math the total revenue of £9m for 2015/16 and 17 as declared in the Crowdcube pitch, doesnt really compute with the 2017 revenue figure of £4.3m on 43% growth from 2016 if you believe their 80% figure. 

They also claim to have sold the most expensive bottle of new whisky. So what?

So an IPO raising just £15m before the end of 2018 - given the current UK climate and all. Likely - na. Just more PR to promote their brand whilst they wait for the whisky to do its thing. And do they think that a whisky with zero heritage, distilled in England of all places, is going to compete with the real thing. Pull the other one. Tourism maybe, - whisky, no chance.

Friday, 7 September 2018

Videogram Worldwide closes but is still promoted by Crowd For Angels as a success

Garbage tends to collect in one spot - the recent discovery of a South Pacific garbage patch is one example. Unfortunately Equity Crowdfunding has become another.

Videogram raised money on Crowdcube and then raised some more on Crowd for Angels. Videogram has now closed having spent this money and done little else.

This would be just another normal story in the world of ECF if it were not for Crowd for Angels. They are promoting Zapaygo's new ICO - well that is what they are calling it. In order to launch the ICO, Zapaygo, who raised money on Crowdcube in 2017, have to reach $2m on Crowd for Angels. That seems very unlikely, unless the world really is flat.

What makes Crowd for Angels extraordinary is that they promote Videogram on their website as a success. If you hadnt read this blog you might be inclined to believe them - the company was finally dissolved a week ago.

In the Zapaygo promotion for $2m, we are told that Zapaygo's payment system has been tested by the NEC and is about to enter its beta testing with them. Well that certainly was not the case when we spoke to the NEC, although they did confirm that they have an agreement with the company. The Crowdcube raise was an oddity see here.

What ECF needs is more clarity and more honesty  - not more rubbish filling up the Southern Oceans.

Thursday, 6 September 2018

Tiosk put their flagship unit up for sale. Another Crowdcube success story.

Is this the end of Tiosk and Crowdcube investors' cash? Has anyone told these investors? Does anyone care?

We wrote about Tiosk recently - essentially they have gone bust already unless they can find new cash. This would seem to confirm that. They never got back to us when we asked for a comment. Id imagine the two girls who set this sup have moved on leaving that is behind. 

you can read out last posts here. It sums why Crowdcube is such a farce. As to the rewards - we just hope you have had your fill before the final bell tolls. 

Monday, 3 September 2018

Busy month for Crowdcube funded companies - will they show any improvement on their dismal performances?

September is a busy month for company filings. We have a whole host of Crowdcube funded companies lined up to reveal their accounts for YE Nov and Dec 17. 

UPDATE - we notice that recent lack of progress in completions has pushed Crowdcube into sheer madness with the new launch of an old Brewdog campaign - just to make things even less/more 'misleading'. Ridiculous boys.  Doesn't mention the disaster with your bottles anywhere does it? 

Of course not all of them are in yet and some will no doubt not get round to it until the New Year but here are some of them - there isn't any good news.

Lovespace                    -    Projected £7m profit is in fact a loss of £1.5m - another one.

London Doctors Clinic -   Projected loss of £620k is in fact a loss of £1.1m

Gripit                            -    Projected loss of £240k is in fact a loss of £1.78m

Gamesgrb                     -    Projected profit of £2.57m is in fact a loss of £100k

Emoneyhub (Justus)    -    Projected profit of £2.3m is in fact a loss £280k

Cupris                          -    Projected loss of £464k is in fact a loss of £323k failed to raise extra £1m

Cornerstone Brands     -    Projected profit of £650k is in fact a loss of £3.5m

Clear Water Revival    -    Projected profit of £550k is in fact a profit of £46k

Chargebox                   -    Projected profit of ~£1m is in fact profit of £100k

Cake Tech -------------------Sold out with no money for CC shareholders------------

1854 Media                 -   Projected profit of £210k is in fact loss of £113k

Big Sofa ---------------------Sold out with little or no money for CC shareholders-----------

Bellfield Brewery       -   Projected profit od £550k is in fact loss of £209k



Workabode-----------------Due £7.5m profit 2018 and no idea how they will get to this------

Vakay-----------------------Site down and didnt raise £500k extra funding. to Pels Family Office. CC Shareholders get 70p/£100.

Earwig                        -    Projected profit of £429k is in fact a loss of £100k

7 Bros Brewery          -    Projected profit of £267k is in fact a loss of £70k

Righteous                   -    Projected profit of £300k is in fact a loss of £60k

And so it goes on and on and will keep doing so, unless Crowdcube make a better attempt at promoting serious businesses run by people with some hope of getting there. EIS and SEIS could be used to help with this - but then the FCA and UK Gov have no real interest in promoting meaningful SME growth long term. Short term numbers are key and they show a rise in SME start ups. Yipee. 

More to follow as they file but Im not expecting any of them to get even close to their ridiculous Crowdcube figures. 

Friday, 31 August 2018

Tiosk - a good example of Crowdcube success.

Tiosk raised £173k on Crowdcube in 2016. They already had what they described as their flagship unit in Hackney up and running. Now 18 months later accounts to Nov 2017 show a deficit of £147k with nothing we can find to make it up. And the accounts, as filed,  are not correct. 

There is no explanation for this deficit  -  the accounts are of the minimal kind. But what they do reveal is that the figures given and filed on the 2016 accounts have now been changed - but the filing hasnt. That is clearly in contravention of all accounting rules in pretty well any country that has accounts. You cant make things up.

According to the usual rubbish provided on Crowdcube, Tiosk was due to make profits of £122k last year  - but made losses of £115k and failed to raise any more money. 255 investors put money into this company and the pitch was 140% over subscribed. They are due to make a £634k profit this year and we asked them how that was going. 

It's a mess and it would be joke if it wasnt such a shame. Tiosk could have made its two founders a living - as well as a decent cup a tea. What it was never going to do was make investors a return. The company is still technically open but with what hope? A second raise? Well that hasnt happened as planned.

One thing is for sure - a couple of friends selling excellent tea out a unit anywhere, is not a sound business investment. In fact it is not even a risky investment - it is a dead cert zero sum game. And it is a total waste of EIS tax reliefs. The only beneficiary here would be Crowdcube if we hadnt pointed out their inexcusable promotion of the investment.

We did try to get hold of the company.........................nothing.

If you ever wanted evidence that Crowdcube investors are not in slightest sophisticated, then Tiosk is it.

Monday, 27 August 2018

More untruths reported in the Financial Times from Luke Lang of Crowdcube - surely we need to stop this?

What is quite a sensible and balanced piece on EIS and investment in start ups in the Financial Times, is ruined by the paper allowing Luke Lang of Crowdcube to further promote more of his PR nonsense about the sector.

At the end of this piece Lang states that - 

But Mr Lang says exits are becoming more common as successful companies raise follow-on financing.'

This is simply and very patently untrue. Where are these exits Mr Lang? You go on to mention the share sale for Revolut - but this is a tiny drop in the ocean as you well know. Why didnt the pink paper check this out before giving Crowdcube yet more free promotion? Are we now seeing it stooping to the same levels as the Express - a promoter of whatever wacky story is going. No fact checking here. 

Crowdcube, 7 years on, has built its entire wilting edifice on this sort of half truth. Sure there have been a few exits - around 5 -  but nothing memorable when you consider the shams and collapses. When writing a piece like this, why not mention the shareholders in one of the many (used advisedly and true) companies currently either closed, closing or in limbo, with liquidators and administrators and with no hope of Crowdcube investors seeing a penny of their money back - let alone the mass promoted (used advisedly and true) ROI. All c/o S/EIS reliefs. UK plc is being ill served.

Well probably because they failed to contact us as well as speaking to Mr Lang. Mr Lang knows the truth, it confronts him everyday but he has chosen to bury it deep amongst platitudes and PRing about how well things are going. 

Someone needs to be held to account - clearly the FT is not the paper it was. 

Friday, 24 August 2018

Finally the truth about the My Showcase Crowdcube debacle

Crowdcube investors have lost the lot - £1m invested in Myshowcase in January 2017. But to add salt to the gaping wounds, Myshowcase has not closed, it has been given (sold) to Miroma. Crowdcube shareholders now own a tenth of their original number of shares -each valued at £0.0001. Or as the company has now agreed  - nothing.

It is a shambles. Shareholders cannot claim their loss relief and are now locked into a newco they didnt invest in. We have written about it here

Crowdcube have remained silent on the issue even when pestered with emails from SHs wanting to know what is going on. As we reported before, Crowdcube decided to mark this disaster by sending shareholders a 'congratulations' email, celebrating their new holding in the newco. Yes they actually did that. Killing you with a smile.

Come on Bryony at Crowdcube - cant you at least be honest enough with your customers to admit this is one of your largest clusterfucks and just say sorry. 

It will no doubt not go down in the Crowdcube PRing cupboard as a failure but an exit. Probably one of their better ones. 

Thanks to SHs for the information - without it we cant attempt to hold Crowdcube to account for the mess they are creating. 

Thursday, 23 August 2018

A bit of a dogs dinner - See what happens when Brewdog fan themselves in the USA whilst their Ellon brewery chases its tail.

When a company grows exponentially, someone has to keep an eye on the basics. Brewdog's new catastrophe with their champagne style bottles will cost the company hundreds of thousands of pounds.

These things come in threes. Brewdog have now had their three for 2018 - one unfair dismissal claim, a slap on the wrists for misleading promotion and now this.

Mind you the half year results are impressive - revenues up 55%. Much of this growth coming from their new outlets. This comes at the same time as they have opened their first Beer Hotel in Columbus Ohio. Why you would want to sleep in a brewery is beyond me.

It would be a good time to keep focused on the basics. 

Tuesday, 21 August 2018

Faction Collective report losses in line with their Crowdcube numbers.

At last we can report that a Crowdcube funded company, the ski maker Faction Collective, has come in ahead of its projections.

Investors will be pleased to see that the losses projected to YE17 are higher than the losses recently filed by around 1m euros. I am told the company is carrying out its expansion as planned and sales are strong. The accounts do certainly show strong growth. 

So now we have Monzo and Faction as two companies that appear to be on the road to ROI - long way to go mind. 

The one thing these two have in common is that they were already semi established by the time they used Crowdcube. There is a message there. One that the Redemption Brewery will hear with joy.

However it doesnt answer the on going question of what to do about the real start ups and their grossly exaggerated numbers. It wont be long before 'crowdcube' is added to the national business lexicon. As in.........................

'Are we running crowdcube numbers or sensible ones for this projection?' or ..................

'Oh those - no ignore those, they were crowdcubed numbers; no one is going to believe those'

Monday, 20 August 2018

Bellfield Brewery join the legions of Crowdcube companies that fail to meet expectations.

No one expects all Crowdcube funded companies to meet the expectations they promote when they raise on the platform. But they might expect one to. 

Not only that  - they might expect a couple more to get close.

Well that just doesn't happen.......ever.

Bellfield Brewery is yet another that has promised gold and has so far delivered empties. According to their Crowdcube pitch, this would be the second year of handsome profits. YE Dec17 actually proved to be a far greater year for losses than any before it. A £500k profit is in fact a £209k loss. Only hard work at the Edinburgh VC pumping stations has stopped them sinking altogether.

Good luck required here. You really cant argue with facts. 

Sunday, 19 August 2018

The upside down world of the EIS incentive as Redemption Brewing Co fails to gain traction on Crowdcube

What a perverse world we live in. Brewers can make up all sorts of stuff about the number of units they operate, their turnover and plans but if they have EIS they almost all get funded on Crowdcube. 

Yet a decent brewing business like Redemption, with a solid existing core and Ebitda positive accounts, which has no EIS due to its trading for more 7 years, is failing to get traction on Crowdcube.

It makes you wonder. Is getting 30% back on an investment which will never see a return and will probably fold completely, really better than investing in a company already over its teething stages but without that relief. Common sense demands the answer to be no. Clearly losing all of your remaining 70% investment isnt a good plan.

I fail to see why there is a 7 year line. Young businesses are far more risky and there is a far greater chance that the EIS reliefs will be wasted. No one checks to see if these start ups are really sensible, with sensible plans. Yet a business in its 7th or 8th year, which is producing positive Ebitda, has no access - even though it is a more sensible investment and is therefore a better use of taxpayers money. 

We really need a system that is less rigid - a 7 year cut is plain stupid. A case by case test should be allowed. I know there is an 'allowance' made for companies that can prove their new product is for a  new market, even if they are more than 7 years old but I have yet to hear of a company successfully using this option with ECF.

I havent looked in any detail at Redemption's plans.

Saturday, 18 August 2018

Crowdcube persist with its very misleading 'invested pledges' numbers. Now over £500m. So what?

We are sad to report that despite the whole equity crowdfunding sector crying out for Crowdcube stop it, the UK's largest platform by failures amongst other measures, is persisting with its pointless 'invested pledges' PR. It now tops £500m apparently. 

Crowdcube invented this number and Seedrs soon followed suit. What it means, in plain English, is that this is the total for all the 'money pledges' on the platform for failed and successful pitches, ever. As the failed pitches are a far greater number than the successful ones, you can see that £500m is a very long way off the money that has actually been invested. 

So why do they do it? They started by trying to get away with calling this simply the total 'invested' with a small footnote explaining the above. Obviously after we pointed this out as nonsense, the FCA have asked them to be less misleading. Well £500k in pledged investment is less misleading but it is still misleading. Take for example the headline for this piece of poor journalism  -

The internet picks up these headlines and they tend to become facts. £500m has not been raised. 

It is quite obvious why Luke Lang uses this tactic - £500m is far more impressive figure than the real invested figure. But is it relevant - the amount pledged? Well not really. It is an interesting metric for internal use but is meaningless and more importantly highly misleading to the casual on looker - who might then be tempted to have a go. It's a lot like an architect punting for business by telling clients he has X million of business on his books. Actually, he has none but he has quoted for X million and all the tenders have failed; because he is a rubbish architect who over charges.

In the same article above, they state that 60% of Crowdcube investments come from HNWs and sophisticated investors. Impressive .......until you realise that both of these categories are invented by Crowdcube as part of the kindergarten signing up process - it's self assessed; you just tick a box. Any old box, no one checks. Which makes this claim, which must have come from the Crowdcube PRing Dept, total paff. 

So nothing new there. 

Monzo - £1.5bn. Really?

Hats off to Monzo. They have joined or are about to join, the hallowed ranks of the Unicorn. The unicorn is a mythical creature that no one has ever seen.

Caveat - like Brewdog, Monzo was a big name before it came to Crowdcube. Investment at the £30m valuation in 2016, was a no brainer. The company has done pretty well since and this current round for £150m is certainly looking good. 

I wasnt going to write anything about Monzo's latest funding round for £150m, which if it completes, will place them well into Unicorn territory. But some goading from a Twitter follower who thinks he's rich, has stimulated the juices.

As anyone with their head facing the right way, knows, this and all of these 'valuations' are completely spurious - apart from as a gauge as to how crazy the world has gone. Monzo shares - the ones this twit has bought (£5k's worth from all three Crowdcube rounds) are worthless today. There is not market to trade them. There may be one soon but as of today there isnt. So he cant realise that £50k he is sitting on. He might be able to do a private deal for say £10k.

With very strong headwinds heading this way in fronts that none has ever witnessed before, 2019 will be a true test of the Monzo value. We have all seen how increasing valuations mean nothing - just look at Sugru. 

My best guess is that Monzo will be worth much more than the £30m when it first appeared on Crowdcube. How much more is a pure guess. I doubt it will be £1.5bn. What would it take for sizable numbers of their current 800k plus users to emigrate to Revolut or perhaps a new player not yet visible? A technical glitch or some small hacking scandal? Not much. Evidence is that only a fifth of the company's users place their salaries with with it - although this is growing. It seems like a pretty sandy foundation for £1.5bn. Current losses running at £33m mean new money will almost certainly be required. Like Deliveroo and Revolut, the Monzo Unicorn isnt fussed about profits - customer acquisition is the game. But at some stage it will have to be. Then of course there is always the rise of the established banks, who are just now waking from their techphobia slumbers. Most of them already have the numbers and the profits. Image is their problem. The race is on. 

What the twit was also trying to say was that this mitigates all of Crowdcube's failures. Really? It would certainly go someway to removing the losses - the investment in Monzo via Crowdcube is worth ~£4.2m and this is now 'worth' £84m or roughly a years worth of Crowdcube investment at the current rate. But the losses to date are not the point  - as we have consistently stated. It's the number of zombies that matters plus the closed companies. Closed companies are around the 60-70 in number but add in the zombies and that number flies to around 200 plus. That loss when it materialises, will sink the as yet fictional Monzo uplift. 

Wednesday, 15 August 2018

When Brewdog met St Andrews Brewing Co....and Innis and Gunn ran away.

Is all well in the Beer Garden? St Andrews Brewing Co, currently on Crowdcube with over £500k completed of their £400k campaign, are now opening another new pub in St Andrews; where they already have one. A few yards down the same street, Innes and Gunn, another Crowdcube alumni, have upped anchor and left their St Andrews pub ambitions in tatters. 

The purchase of the new lease by St Andrews Brewing Co is confirmed in the Dundee Courier here 

This is interesting on a few levels. 

Firstly St Andrews Brewing make absolutely no mention of this new unit in St Andrews in any of their Crowdcube plans - the ones used to entice £500k of investment. But the pitch is live and I'm sure investors would like to know more. In fact this new opening was mentioned in the press in April 2018. There is a very early update on the Crowdcube pitch but the plans for this 'new' unit are not included in any of their financials, PD etc.

Why, for instance, do they believe that a new unit, in such a small town, is a good use of investors new cash, when they already have one just 4 minutes walk away? Surely this is information that should at least be on the updates page (see correction above)-  it is a material fact in the investment decision. This is yet more evidence that investors are not given the full picture. Is this new lease and new expenditure on its opening, in the Crowdcube financials? Amusingly, the previous owner of the pub that will be St Andrews Brewing's new pub, has been given a 'senior management' role with the company. Checking on the accounts for Rascals doesnt make for good reading if you  are now investing in this pub - which 600 of you are. But hey, maybe St Andrews Brewing can achieve something with it that the previous manager couldnt - make some money. 

A few yards down the same street, Innes and Gunn, who opened one of their new pubs in a truly awful location, have given up. We knew they would. Innes and Gunn used Crowdcube to raise over £1m in 2016. The St Andrews unit would have cost them plenty to fit out. Since the building was renovated, it has housed a failed restaurant and now a failed pubeatery. St Andrews is not an easy town to operate retail - ask anyone who lives here. Units change hands regularly, apart from a very few stalwarts. Seasonal swings, the Links own retail operation, including large F&B offers and discount hungry students, all make a tricky mix. 

Now to put the final twist on this story. I know, via contacts in Aberdeen, that the greedy Brewdog have been looking to open in town. I also know that they looked at a site that is now to be run by St Andrews Brewery. The rest is as they say, history or is that hearsay. It probably has something to do with money. 

Can you really keep Brewdog out of a town? We think not. There are many locations in St Andrews that the dog could open in, in a swish of its mohawk tail, by offering a healthy premium. So are St Andrews Brewery really going to operate all of them? 

Monday, 13 August 2018

Glentham Capital - Nicola Horlick's crowdfunded disaster - update

Nicola Horlick's daughter Alice recently got married to Nathan Engelbrecht. Around the same time, Nicola transferred a chunk of her shares in disfunctional Glentham Capital to Nathan and her brother. A wedding present perhaps?

We have written a lot about Nicola Horlick and the Glentham Fund - here. It used Seers to raise over £400k a few years back and has done nothing since except spent it. 

It seems someone bought £250k of new shares in Glenthan in April of 2017. This is the amount Nicola Horlick owed the company. She had said it would not be paid in to buy more equity. But she appears to be new owner of 20k shares.

Alice runs Aevha - a company that used Crowdcube to raise £150k in 2015. Alice's then boyfriend and now husband is also a director. Accounts are due out next month and they are supposed to show the company in profit. New money was raised recently, which wasnt in the projections but without which the company would have been struggling. Strange increases in 'other reserve fund' are unexplained in the last accounts. Bottom line is very thin. 

Glenthan Capital itself seems to be pointless. It made another £150k loss for YE Dec17 and has no money. The fund it was intended to set up, is very reluctant to come out and be seen.

What's next - anyone's guess but I wouldnt expect it to be too good. 

Saturday, 11 August 2018

EEEEEEEEEMove get weird on Crowdcube.

Emoov recently amalgamated with two other loss making online estate agents, then they came back to Crowdcube and raised over £1m. The valuation during the raise was £102m. Now they have sent out an email revisiting this valuation and telling SHs the valuation is to be £51m - adding that this is good for them as they can have twice the number of shares. 

Hmmm. What is 2% of 0? The same I think as 4% of 0. 

In 2015, when Emoov raised £2.6m on Crowdcube, they were valued (by Emoov) at around £22m. So even £51m, albeit a paper value, is double this.

We wrote about their last raise here 

We wonder if the management have been told by institutions that £102m is way too rich for the IPO they say will happen in March2019 - even though Emoov themselves predict this will be a £130m. Halving your valuation after you have raised £1m  - however you did it - is crass. It suggests the management havent a clue.

If anyone had any doubt about the ridiculous valuations that Crowdcube allow/encourage, then this has to put it to bed. Crowdcube investors accepted £102m and are now, just weeks later, being told it's £51m. You couldnt make this up. 

Otti Prams joins the logjam of Crowdcube funded companies going nowhere.

Otti Prams raised £89k on Crowdcube in 2015. For once ambitions seemed sensible - well for their failed 2016 second raise at any rate. Unfortunately even sensible seems to be beyond them.

More losses for YE Aug 2017 beg the Q - why were they ever on Crowdcube? These latest accounts have one line that reads like a certain death sentence -

' During the period the company carried on trading, selling to House of Fraser and independent shops.' Eggs all in one pram?

We predicted this 2 years ago -

This is a classic small business with zero chance of scaling, so zero chance of a ROI for any investors apart from the owners. It is a fine business for those involved but it really shouldnt be allowed to raise funding from the public using, what seemed sensible but turned out to be, fantasy projections.

Thursday, 9 August 2018

Ubrew and I'll make up the stories

When is a brewery not a brewery? When the lease was never signed. Ubrew spent a lot of time last year talking about their new unit in Manchester. Well there isnt one. 

We wrote about it here.

Pictures even appeared of said new Manchester unit but these turned out to be the existing London one. This northern unit was due to open by mid 2017.

So what happened? Well Ubrew were unable to explain the fact that news put out by at least two rags said they had opened up north. Whats more the management of Ubrew were quoted as saying that a large percentage of the capacity had already been sold. This was in April 17. Today they do not have a unit open in Manchester. 

Something somewhere has clearly gone wrong. Now Will Horsfall has left - he was half of the company. The latest accounts show another loss of £102k which was a surprise as the London unit was reported as being oversubscribed. 

Wednesday, 8 August 2018

Workabode files small losses for YE November 2017 beating their Crowdcube projections

Workabode raised a total of £277k on Crowdcube in 2014 and 2015. Crowdcube projections show them making a £7.4m profit for YE May2018. 

There are numerous legitimate reasons why a new company might miss its projections. We have covered them on this blog as many times. Delays in funding, delays in technology are just two. Workabode has in fact beaten its projections for 2016/17 - makning a far smaller loss. 

We asked Workabode (Ex One City) whether they could fill in the blanks left by a very minimal accounts filing. They were aggressively sure they couldnt - advising they would 'come after me' if I wrote anything 'onerous' about them. Odd use of the word onerous I thought. 

So we are no clearer - maybe the next accounts will reveal a £7m profit. Certainly the projected plans show the company leaping from a £500k t/o to a £10m t/o in the last 12 months, with the next 12 producing £28.5m in revenues - all on a GPM of 93%. All of this achieved with the minimal inputs, a small SM presence, a website that doesnt do anything and what appears to be a large (projected) short term loan. Gold Rush.

Mind you, whilst Workabode has a tiny following on Twitter - who follows nothing - The Irish founder, Trevor O'Hara, has a healthy crowd for his continuous stream of banal business school retweets. That's Twitter for you. He has apparently written a book(he lists himself as an author but maybe that's the Irish humour) but we couldnt find it. As a self proclaimed Irish serial entrepreneur, we have struggled to locate anything with substance. Maybe that is also an Irishism. Still as he loves to tweet, failure is all part of the entrepreneurial journey. Something we can agree with.

You can catch more of Trevor's wise musings here . Odd use of language (as in onerous) but gives you a flavour of the man.

Previous talk of an exit by the end of 2019 is still possible. The 2014 raise highlighted the following - 

One City aims to roll out at airport locations too. We already own the IP for a 5.2m private pod with fully reclining seat, flat screen TV and Singapore Airlines-type service levels. So we are well positioned to target business travelers who frequent the top 75 airports in the world handling more than 15 million passengers annually.

We couldnt find this referenced in the accounts which show just £3,600 of fixed assets. That would be some write down over 3 years.

Our best guess is that the company needs to up its income a tad to stay balance sheet positive. We wish them luck. They told me they keep their shareholders well informed. So if any of you wish to comment or contact us on this, then please do. 

Tuesday, 7 August 2018

Awesome - A Crowdcube pitch with merit.

Well Punters - it is not often we slap a Crowdcube pitch on the back when it's live. But Awesome Merchandise gets one from us.

The company has been going since 2005, has continually made incremental profits and now has an established position from which to launch ambitious plans. Its valuation is sensible and you might even say generous, given the level of most pitches on here.

Barriers to entry are there based on the time it has taken to build up their trust quotient. This trust is founded on the IP of their staff - their creativeness - which cant be directly replicated. Competition in the US may be stiff.

Answers to queries are well thought through and robust. These guys have a plan and it makes some sense. There are risks of course but compared to most, this one looks interesting.

Please dont disappoint me by letting it fail! We had no hand in prepping them so this is a totally objective view.

Of course short sighted punters will duck out because of the lack of EIS - on the time limit. But more thoughtful ones will realise (I hope) that investing in something a little more solid than a beta app or a fad brewery, with EIS, is a better option for a return. EIS after all only limits your loss or marginally inproves your return if there is one. I think somewhere along the line, investors have forgotten this. The trade off is stability versus tax credit.

Id be very interested in your opinions.

Saturday, 4 August 2018

Hats off to Crowdcube - they just may have cracked it.

At the crucial moment when Crowdcube are sure to be asking for more cash - you can tell as their PR has been ramped up - the ECF platform is completing enough funded campaigns to generate a BE situation. For this month at any rate. 

Despite out best attempts to warn people and despite mounting evidence that they will not see any of their money again, the Crowd is reaching deep and if you count the over funding campaigns on the platform, it totals around £15m currently. This truly is a first and is a major breakthrough. Annualised this would get them to the magic figure of £180m which at a 4% commission, is BE nirvana. And this does not include the bizarre US campaign they have listed.

One Q you have to ask is just how much of this money is on/off commission? For example VITL were going nowhere with their £400k campaign until this week, when Nogra Group put in £600k. The Crowd in this instance has put in less than half of the target. Is is likely that VITL would be paying commission on this £600k? We think not. 

We know that Crowdcube have put a lot of flex into their commissions - smaller companies pay full wack, allowing the larger ones to pay less or nothing (reportedly). So that would explain their low 4% overall commission when they charge a 'fixed' rate of 7%. 

So despite the total lack of returns and exits and the increasing failures and zombies, all catalogued here,  the Crowd are fully behind the platform. It makes you wonder. What would it take to change this behaviour? 

Friday, 3 August 2018

Newgalexy break into profit - against the Crowdcube tide.

At last, some good news - well relatively. NewGalexy, now Contractpod Technologies, have shown their first profit - a magnificent £50k. Unfortunately, the Crowdcube projections showed them with a £2.6m profit last year, so we shouldnt get too excited. 

But hey, it's not another whopping loss and it means things are moving, albeit at snails pace, in the right direction.

So a cautious hats off to NewGalexy.

Seven Bros Brewery fails to meet its Crowdcube promises

Glass half full or half empty, you still need to make a business deliver. Seven Bros Brewery on the merry bandwagon of the craft ale explosion, persuaded Crowdcube investors to part with £200k in 2016. The first real results since, show the company is either way off track or has taken a different line.

Its a familiar tale but not one we ever make up. This brewery showed investors a 5 times increase in turnover from 16 to 17, resulting in a handsome profit for 17 of £260k. These accounts show a loss of £60k fro the year, with a low level of activity. 

Sales have to pick up or more money will be requested. This sector sure is getting crowded!

Righteous continues to make losses and is now in deficit.

Righteous raised twice on Crowdcube. They promised the earth and delivered nout. Jam tomorrow contracts that disappeared and sales figures that were mere dreams have left this once Crowdcube sensation, in ruins. 

Well that is one way of looking at it. Alternatively you could say that the couple who worked their socks off to make this venture go, had their heads turned at a crucial juncture by another venture, now called Full Green aka Cauli Rice. No doubt about their work ethic but there has to be considerable doubt about their ability. 

At a crucial time for Righteous, they decided to set up this new venture. Full Green is trading but has not got close to the promises made.....yet. Expansion in the US is critical.

Back to Righteous. Whats next? Closure most likely or a fire sale. Shareholders were at least given the option to exchange their shares for ones in Full Green - which is an honest and decent approach you dont see very often in this space. 

So whats happened at Energie Corp since its Crowdcube success in 2016?

Energie Corp run cheap fitness clubs and are well versed in the dark arts of franchising. They took £630k off Crowdcube investors in 2016. Spectacular growth forecasts where backed up with impressive opening schedules and unit numbers to match. 

Since then, the company has launched a rebranding of its Fit4less name and gone for Energie, with a cheeky little french twist. Reviews of the sites are not good.

What is curious is that the Crowdcube FCA verified section of the pitch in 2016 said this - 

Our track record
Over the past 13 years, √©nergie has built a fitness network spanning England, Wales, Scotland, Ireland, Latvia & Poland with 93 clubs trading, a membership of over 110,000 & network turnover of c£26m. Our key achievements to date include:
  • UK Market leader in fitness club franchising and third largest fitness brand measured by clubs trading
  • Over 150 franchises secured, 93 clubs trading, 31 in the current pipeline for opening and new franchisees coming on board at a rate of 40 per year and growing
  • Largest fitness club operator in Ireland, with 12 clubs and c. 21,000 members
  • Multi-award winning brand in both the fitness & franchising sectors, including wins & finalist positions in the UK Active Flame Awards, HCM Members Choice Awards & BFA Franchise Awards.  
  • Demonstrated transportability of our brands with with 21 clubs across four countries outside of England & Wales

The latest filed accounts, with accompanying statement full of how well they are doing,  said that they had 11 clubs in Ireland, one has been lost in the mists, 6 in Scotland and 1 club in Poland. A total of 18 which means they have lost 3 from the 21 declared above. By the end of the year, they state that they had 88 clubs across all of their networks. 

Now either I have gone potty and all of you are sane or vice versa. I read this as a considerable fall in the number of clubs operating since Crowdcube allowed statements on their platform giving the number as 93 with another 31 in the pipeline in 2016. So by now a minimum of 124 - not the 88 in the accounts. That is some difference. Other numbers on the Crowdcube platform also make it look as though things have not gone to plan.  

In a similar vein the accounts show further losses where the projections showed a healthy downward dog style profit of £630k. Ruff. 

Crowdcube - helping to make the impossible unattainable, using Government backed tax breaks.  

Basic dishonesty is the new truth - Rise Art mislead investors on Crowdcube.

Rise Art appeared first on Crowdcube in 2016. They raised £516k. Now they are back again raising over £650k in a campaign that is on the edge of being successful. So well done. Valuation just under £10m.

This is a comment on the standards of disclosure on Crowdcube rather than any comment on whether this company has a chance or not.

When asked a direct Q about how the business had performed compared to their 2016 projections, the waffle that follows defies description. Glowing reports of doubling turnover year on year does not tell the truth guys. Your projections showed turnover go from £518k to £2.26m, 2016 to 2017 and then from £2.26m to over £9m 2017 to 2018. The 2017 and 2018 numbers showed profits and the 2018 profit was over £5m. So what really went wrong?

Actual turnover (and this is presented throughout the pitch as a triumph) went from ~£500k in 2016 to just over £1m in 2017. So around 50% of the projection. There have only been large losses. So the projections were total nonsense. But when asked, they fail to admit this or in fact even refer to it - despite the directness of the Q demanding that they do so. 

What is the point in producing this rubbish? No idea. Why do people believe anything these guys say - havent a clue. How can sensible people invest in this  - totally baffled. 

Crowdcube  - Defying Logic. 

Thursday, 2 August 2018

Where will it end? Crowdcube congratulate bereaved shareholders in MyShowcase.

Myshowcase raised £1m on Crowdcube not long ago and has now been 'sold' to another company for a large loss to investors. So Crowdcube thought it would be good idea to send a cheerful message to the Wake; ignoring the death. 

We have written about this company here.

It seems there is just one button for outgoing news on the Crowdcube control panel - its the marked ''Congratulations''. The outcome of the investment seems to be irrelevant - which when you think about it, is spot on. We love the references to EIS and SEIS - DUH. 

Here is the message - 

Congratulations! Your investment in MyShowcase has been completed and your ownership statement is now available.

On behalf of Crowdcube and the team at MyShowcase, thank you for supporting this business on Crowdcube.

If you are eligible for SEIS and EIS tax relief (which will depend on the Company being eligible and your individual circumstances) you can expect to receive your tax relief form within 8-12 weeks of your certificate being sent. Please
................. and note that the availability of tax relief may change in future.

Best wishes,
The Crowdcube Team

Time for Bed  - too much good news is so tiring

Looking like an Entrepreneur.

There is a look - the look of the entrepreneur. It is hard to define - a crystal-clear and steely-strong look, that comes with a calmness and a fathomless confidence. It's not bravado, it's not ego - it is the antithesis of both. But when you see it, it is worth recognising. 

I have just spent sometime meeting clients in London. After day two it suddenly struck me, as I was flicking back through the meetings flahbacks,  that all of these people had a similarity - they had that look. It is one I remember encountering first back in 1985 when I ventured out into the world of start ups. But I didnt recognise it then. It's unmistakable but hard to define and it cannot be simulated. I suppose my best attempt would be to describe it as like the perfectly still rock pool. Clear, calm, deep and powerful. Even after the wind removes the image, the calmness returns time and time again. It is immutable.

This is something you cannot recognise unless you meet someone face to face. Video doesnt carry it. A group meeting doesnt always reveal it. Eye to eye, one on one, close contact, is the only way. It bears no relation to physical looks, although it is clearly present in demeanour and presentation. It strikes you within a minute of meeting - or it is not present. Without that look, the chances of a start up succeeding on a scale that makes an investment worthwhile, is pure chance, with the odds stacked against it.

To make sense of this where we are now in the altfi world, you have to realise that most ECF investment is raised without any attempt to see if this look exists. When the wind blows and the look is disturbed - it doesnt return and your investment is lost.

When Crowdcube for example use referrals as a major source of new campaigns - handing over around 2% of their stated 7% commission to the referer, you can see why the platform is so chockablock with rubbish. People who work at CC, in senior management roles, are not experienced enough to know the look. How could they be, when they have had just a couple of 16 month jobs with the likes of Virgin Start Up. Misusing the Branson look is not helpful. Yet Virgin Start Up are one of CC's main referers. You can see the problem.

We can do so much better.