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Sunday, 30 December 2018

Crowdcube's Skunk Works wipeout looks like a stinker.



In March 2018, Skunk Works Surf Co managed to relieve Crowdcube investors of £372k. In November of the same year they closed down, in administration with what looks like a right mess. 


Once again we feel that investors have been misled. A promised on going and vital partnership with Jaguar Land Rover, which featured front and centre in the Crowdcube pitch, now looks like it was on shaky ground. By late summer 2018, it had ceased to function as a partnership due to ongoing problems with the product. This is the conclusion in the first report from the Administration. Naturally these problems were never mentioned on Crowdcube in March 2018. 

Crowdcube investors are not the only ones to have put money into this loss making surfer. InvestNI put in £50k and the company won £10k from Richard Branson's 'Pitch to Rich' in 2015 - which has now unfortunately become synonymous with failure. They also raised a total of £500k from angels with match funding from CoFundNI. You have to wonder what due diligence these guys do. My experience of Government backed SME funding channels is that they are more interested in box ticking than helping sustainable business development. Which is crazy.

All of this against a background of 3 years trading  - zero revenues in 2016, £100k in 2017 and only £88k in 2018. With mounting losses each year and increasing administration costs. These figures were also left out of the Crowdcube pitch, where copious lashings of promised trade with the EU and USA were talked up alongside 'market analysis' showing many billions of value to be had, as if it was low hanging fruit. Seriously how can you test market a new product with sales of £100k in 2 years? And guess what - the product issues in 2018 brought the company down. 

We may never know this for sure, but it seems possible that the company knew it had problems with JLR when it launched on Crowdcube. The partnership was started in 2017. Ultimately, its failure caused investors to shy away from reinvestment in the late summer of 2018, when the company went on its last door knocking session. As early as 2 October 2018, the administration process was getting underway. 

So here we are again - a potentially successful business with a registered patent and another one pending, over expands before it is ready. This expansion is motivated by the ease of getting cash from Crowdcube investors with tags like 'Pitch for Rich' and a few lines on global surfing sales. Losses all around. All avoidable. 

   

Thursday, 20 December 2018

Macrebur pull large institutional funding after Seedrs round is finalised.




Quite simply - if you do not want this sort of thing happening regularly, you need an independent platform that provides investors with the real information - not what the platform or company want you to hear. That platfrom is here at ECFBuzz. See https://www.indiegogo.com/projects/ecf-buzz-the-crowd-investors-information-centre/x/19804529/

Macrebur's Seedrs campaign majored on the large investment from another road builder, Instarmac. Investors have now been told that that money is no longer available. How can that be right? 


We have written a few times about this company -

http://fantasyequitycrowdfunding.blogspot.com/search?q=+macrebur

There were many questions left unanswered but now at least one of them has an outcome - albeit not the one investors were told about. The investment was for something like £1.8m - we are cautiously vague because the amount and the supplier were kept vague in the pitch. You can read about that in the other posts. There was a lot of vagueness.

To avoid this sort of thing, ECF Buzz will have a forum to allow investors to discuss with other like minded people, what they think or what they know. This will be totally independent from from the investing platforms, in this case Seedrs and the company. To date there has been nothing like this. ECFBuzz will also help to educate investors in what to look for in a good management team and what to avoid. Its library resource will cover all aspects of start up funding and investment. You simply shouldnt invest without it.

Kokoon launch private Crowdcube round in desperation as their Kickstarter customers carry on complaining



Happy Christmas from Kokoon - the guys who help you sleep tight at night. Now you have paid for your headphones - well you paid £2m+ 3 years ago and we still have only delivered a few, and we have run out of cash, again, we are back on Crowdcube privately selling more equity. We thought that would bring the cash in, in this season of Good Will.


The valuation in this Crowdcube round is up by 50%  and it is still ludicrous. We have written about them before - here

Much in the same way as May is blackmailing MPs, her deal or ruin the country, so Tim Antos, the CEO, knows investors will see this as give us more cash or we go under. Which is in fact what he should have said in the last Crowdcube round. 

Tim wrote - in all seriousness - 'With so many of you expressing interest in following your money to maintain or increase your stake we’re delighted to be making this round available to you privately via the Crowdcube platform.' 

That is not the impression we get from talking to investors. But he should know. 

We still have no real idea if the product is any good. The first few that have gone out have had a good but mixed reception - certainly not great. People still demanding refunds. And so few have arrived with customers when compared to the 'sales' that you have to wonder about the numbers. It doenst really help that Kokoon has been selling the headphones off their website for delivery nowish when so many people who paid 3 years ago have not seen a thing. That is simply wrong. 

The whole pitch is a little odd. Target £600k. 7 invetsors have put in £498k at the opening. Largest investment £478k. Crowdcube funding??

We smell the usual Crowdcube BS. Cash in, followed by fire sale and all investors in this round lose the lot. 

Mind you if that keeps you awake, maybe you should invest. 



Monday, 17 December 2018

Much like Father Brexit, Father Crowdcube has been telling some whopping big fibs.

Image result for bad christmas


So here we are December 2018, 7 years after Crowdcube started. And there is little change. Companies that have filed accounts this month are all, bar one,  in the missed our projections box. Plenty more to go. 


Here are a few we have unwrapped - what did they want for Christmas? 

The Eden Project   wanted £364k profit but only delivered £80k - complicated story.

Evogro                    wanted £625k profit but lost £141k

Rough Runner       wanted over £2m profit but lost £237k and is sad.

Solely Original       wanted £8260 profit but lost £50k  - not bad!

Sticky Board           wanted £193k but delivered £10k - close. 

Tap2tag                    wanted £500k but lost £31k

Harry Bromptons   wanted 423k but lost £19k

Verto Homes           wanted £2.3m but delivered £450k  - still it is a profit. 

Walljam                   wanted £775k but lost £80k. 

Loads more to follow!

The one shining light was .............

Sandows London     wanted -£200k and got a loss of £200k.  Hats off. 


Saturday, 15 December 2018

Seedrs delivers another Crowdfunding disaster that just makes you want to cry.



Happy Christmas - this time from Seedrs. Bike Hud has declared it is now 'dormant' although we are not sure that the CEO has a clue what that means. Bankrupt is a better description. 


David Vout 'runs' Bike Hud - a widget to make motorcyle helmets present a heads up display. Well that is what it said on the tin. After raising £100k on Seedrs and collecting another £250k in unpaid debts, the last accounts, filed recently, optimistically declare that the company is now dormant. As if that is something akin to Passing Go.

It turns out that Vout had failed to pay for the renewal of his patents - so they have been lost. No bike helmet gadget was ever available as far as we are aware. All the money and the patents are gone. So lets just put up the dormant sign and hope no one notices. Especially those pesky creditors. Shareholders - oh sorry forget about them.

Shareholders will be delighted to see that all £272k of their FA have been wiped from the balance sheet. 

Happy Christmas Mr Vout. 

Friday, 14 December 2018

You simply cannot believe a thing you are told in the Press.



A tweeted article on The People's Energy Co caught my attention. The company had raised £500k from 2000 pledgers on Crowdfunder, a rewards based platform, in July 2017. The article stated that the company was to repay crowdfunders earlier than expected. How fantastic I thought.


The tweet was from a well recognised and very well regarded journalist. It linked me in as if to say here is an example of a CF success.


The reason I double checked the information is that Insider rarely get things right  - they just print press releases. No change in this case.

PEC gave away as rewards for pledges a varying amount of free energy. This giveaway was to be triggered by the company reaching 20k customers. In the pitch, completed in July 2017, they state this will be in 12 to 18 months time. So we are now on month 17 - so certainly not early. However this dividend, as the article calls it, is only going to 500 of the 2000 pledgers - so the all the others will be getting theirs late. If they get theirs.

And it is not a dividend as the article erroneously states. It is a part of the Crowdfunder contract. It is a reward for giving the company money in 2017. Nothing to do with equity or dividends. It is due. Already purchased. Non delivery of which would be a breach of their contract with pledgers. If you like, it's like pre purchasing a book before it has been written and then hearing that the company has written the book but only published 25% of number that they owe to people. Hardly encouraging news.  

So this Insider article is totally misleading. The company, which claims it is standing up for consumers and is better than all the other major suppliers because it can be trusted, stated the following in the article -

''Originally, we hoped to start our first pay-out by March 2019 but business has been so strong that we are able to honour the pledge earlier than that, which is fantastic.

“People are fed up with being taken for a ride by large corporates, and they have lost trust in their energy suppliers.  We have set out to restore trust, by ensuring that in everything we do, we act fairly and responsibly, doing the right thing for the people and the planet.”
Well, March is not within the 12-18 month stated by the company on Crowdfunder; it is 20 months out - close but not in. So how can you trust a company that doesnt tell the truth? Im fed up with poor journalism and the incredible volume of inaccurate information that the internet allows to land on our desks. 

Thursday, 13 December 2018

Crowdcube's Happy Christmas is turning into Santa's Nightmare



If you offer appalling quality then you should expect it to produce atrocious results. As yet another Crowdcube company closes and the Emoov fiasco trundles on, it looks like Father Crowdcube's sleigh has crashed. 


Not only have we unearthed another closure but most of the results we have for YE March 2018 are so far poor to disastrous. No good news here for Crowdcube investors. 

The Chocolate Bear Kitchen Ltd has ceased to be, according to filings at CH. It was struck off this last August. Reasons for this are hard to find. 130 investors have lost their money. It wasnt much  - £30k raised in August 2016. What the company did with it is anyone's guess. The founder and sole director, James Lee Gordon, had hoped that his idea of pop restaurants would fly. But like Santa's sleigh it crashed. 

More stories of wow on the way. 

Sorry! 

The only way we are going to alter this is by persuading platforms to offer better businesses. That means educating investors and that means ECFBuzz. 

Open and honest is not something you find on Crowdcube pitches - just look at Rattle



You would think that by now this exhausting problem would have been sorted. But is is not in the interests of Crowdcube to sort it - so it hasnt been. Rattle are currently over funding on Crowdcube but havent revealed that their targets, set in 2017, have not been reached. 


Their 2017 projections stated that Yr One would see revenues of £278k - there is no date given for Yr One. However deeper into these projections there is a start month given of October, which is the same month that they finalised their first CC raise of £400k. So we assume that is the start date - October 2017. 

In the current projections, for the raise that has now reached over £900k of its £800k target, YR One's revenue target is a mere £90k and that is for Yr November 2017 to October 2018. So we assume this is a real figure. So that is a miss ~ 300%.  The t/o for the second year as projected in the first CC raise was over £2.2m. Now it is around £600k. And so it goes on. The company say that their progress has been 'solid'. I would also add here that the way they have laid out their projections for both raises makes a comparison hard - something we are sure they didn't do on purpose. 

Now there is nothing wrong with a slower than expected start and to be honest very few investors will have expected a start up to get anywhere close to its Crowdcube projections. But when you come back for a second time on CC, surely it is not unreasonable to expect that you are honest with what you have achieved vis a vis what you claimed. I dont see that anywhere in this second pitch. The use of Dicky Branson's ageing mug shot is an unnecessary part of their glossy pitch deck which could have given way to more important information. If their 2017 projections were so far wide of the mark why would anyone believe their current ones? That is, if you knew that, of course. 

For previous investors this may not matter, as if the company is any good, they would have been keeping their SHs updated. But newbies will be blind to this information - information that is material to any investment decision. Otherwise why pitch back on Crowdcube; just contact existing SHs and do it that way. That is a major fault with Crowdcube's system.  And it is yet another reason why ECFBuzz must fly. 

Crowdcube's Ethos Global fiasco runs and runs



Ethos Global, run by Dr Theo Koutrakides and his wife, Jennifer Hersch, was put into liquidation by court order in July 2017. It had raised over £700k on Crowdcube just a year before. That liquidation has gone nowhere since. Before the liquidation, the good Doctor and his wife had set up Soma London England, which operates from a unit paid for in large part by Crowdcube investors. It has just filed accounts showing large losses and its BS in very negative territory. How is that even possible?


We have been talking to the good doctor - or rather we have been asking Qs and he has been avoiding them. And we have written about them here. He had promised to gift all Crowdcube investors in Ethos equal value shares in his new Soma but he hasn't done that. One thing is consistent  - he rarely does what he says he will. We have also been trying to help some investors find out what is going on. I have to say we have not had much luck - Crowdcube have done their usual 'it's nothing to do with us'.

This is an email we had today from Dr Theo in response to our chasing him - 

Hi Rob,

Thank you. It has been a hard last few months that has now produced results that new shareholders will be happy to hear. After meeting a number of deadlines incl. filing annual accounts, I am now returning back to writing and completing my response as I will also notify shareholders of some good news.

I need to also await responses from Crowdcube, our tax advisors and solicitors to validate the information in my response before this can be published. I would like to promise a specific date, although this is dependent on receiving the necessary confirmations, which should be this side of the year. Our past investors will all have their shares.


Theo

He has previously made several promises to give me his written explanation and his deadline for this was the 10 December 2018. This email says nothing and is full of confused, irrelevant statements. Nothing new there. 

Ethos made certain promises and declarations in its Crowdcube pitch which were not quite right. The company closed its only unit in Cambridge shortly after raising on CC, where it had stated the unit was a cash cow.  Turned out the Landlords, who forced the company into liquidation, hadn't seen things the same way. It seems unlikely that the major dispute between the company and its landlords was not in process before the CC raise. The CC pitch made not mention of it. CC apparently did not pick this up in their due diligence. 

For some unknown reason the liquidator, Adam Harris of Mazars LLP, has not filed a single thing since they started  - which is odd. He has refused to answer phone my calls. Meanwhile, the good doctor and his wife continue to use the assets paid for by the money pumped in Ethos by CC investors, in their new unit in London. This is apparently owned by Soma, although we imagine the law may have something to say about that.

Soma London England was called Ethos London, when the good doctor incorporated it in February 2017, before Ethos was forced into liquidation. He is the sole shareholder and the company has no investment filed at CH. The Crowdcube pitch was full of the new London unit and its fitting out works started before Ethos ceased to trade. Dr Theo continues to gather more debts as he 'trades'.

The only problem here is a simple one. Crowdcube allowed Dr Theo to take over £700k off investors in 2016 on the basis of false information. These investors are still no clearer now as to what has happened. Both Ethos and Soma studios had and have a decent revenue stream. The London unit turned over £500k in its first 13 months to March 2108; albeit making a large loss in the process. The Cambridge unit was popular. But the way the business is run is an issue. Laws are in place to prevent this sort  thing. The picture is fairly complete and its image is clear to us. When will something be done about it?

Monday, 10 December 2018

Oppo Brothers to be sold - and Crowd investors will see a return this time.



Well at last. Seedrs have some good news for investors. We dont wish to damage the deal so wont be going into detail but shareholders in both rounds of Oppo will see a good if not spectacular return. Prefs not quite so much. 


Seedrs have now put out their own PR claiming this as some massive success  -so the figures are free to go - 

Investors in Round one will get just over 4X return and investors in Round 2 ~2.5X. This is without S/EIS.

The buyer is HP Wild Holdings AG. The UK loses out. 

According to the accompanying letter to SHs from the CEO of Oppo, the company was about to go under and this sales is a deal that no sensible person could refuse. Seedrs fail to mention this. 

As returns go, it's ok but it aint Carling, as Seedrs would have the Press believe. More reasons for an independent platform giving out the real information as opposed to PR. 



We will report back on the numbers once the deal is public (see above). Oppo in our opinion, have taken the sensible option and off loaded at a time when they required large new investment to maximise potential. The CEO's letter makes it clear that borrowing has rocketed just in order to stand still and that the offer for the business presents an excellent life line. I suppose it doesnt matter how SH's get their return so long as they get one. As in the Crowdcube case with Camden Brewery, where they chose to sell because they couldnt make progress alone, so this sale is the best option on offer. In fact the CEO is quite plain, in a May sort of way; it's this deal or curtains. No offence to the late Prime Minister or for that matter the CEO, who may well be very good looking. 

Shareholders can opt to stay with the company which is good to see after all the dragging along that has been going on. 

Noveltea results are in line with Crowdcube expectations



We recently posted that Noveltea had come in off target for year YE Feb18 - only a little off target but off target. This was wrong as we had assumed their 2018 projections referred to YE Feb 2018. Actually 2018 refers to the YE Feb 2019. 


We apologise for this error.

The accounts for YE Feb 2018 are in fact spot on the projections called simply 2017 in the Crowdcube prospectus.


Saturday, 8 December 2018

A Sweeter way to build a successful business.



Looking across the swathe of businesses funded via equity crowdfunding since 2011, it is hard to get excited about the successes. Maybe a lesson can be learnt from the rise of Hyper Recruitment Solutions; a company set up in 2011, which is now making £1m plus net profits.


HRS was the brainchild of Richard Martin or Ricky as he became known in 2012 when he won Lord Sugur's Apprentice TV show. Im not a fan of the show, more comedy than anything else but you cannot deny the numbers. 

Since 2012, when the company launched, it has made steady progress and now reports accounts for YE June18 showing £1m plus NP and dividends to £500k. It has two SHs, Ricky and Sugar. A simple 50/50 deal and very little investment - £250k in equity and no borrowing. It is now a cash generating super charged success. ECF investors would give their right arm to have any such success as part of their portfolio. 

This is real success - it is not based on the last or the next round of desperation funding. It has been built from the base up  - the old way. If you watch the Apprentice you will know that Sugar likes the old ways - he hates BS and wouldnt dream of selling equity based on some mythical future value. 

There is a lesson here. We know the platforms are not interested in learning it but investors should be. Real value is built from the bottom up and it takes time. You cannot simply throw cash at an idea to make it work. Ricky is a highly driven business machine and has built this business up from the boot straps - you cannot buy that or replace it with cash. Sugar knows this.

It is time that investors in ECF thought long and hard about what they doing. ECF needs businesses to succeed in the real world. The latest Monzo cash grab is not a success - the company makes massive losses. It may become one but most of that value is already spent. We need to stop the hype and get back to the basics of what makes a successful company - a bank account filled to the top with cash. 

Friday, 7 December 2018

Surfing without a board as Crowdcube's Skunk Works Surf Co is wiped out


Just months ago, NI's Skunk Works Surf Co persuaded 396 Crowdcube investors to part with over £370k, based on plans to take the world by storm with their new boards. Now they have filed for administration with HNH Partners. 


Their website is down and they have not responded to our phone calls or emails.

This is from their prospectus, on the Crowdcube site -

So if you want to join a young, vibrant and exciting company revolutionising the surfing industry....

Invest as much as you like.

Don't miss out... sign up to our newsletter via the website and be the first to know how we are getting on.

If you are a UK taxpayer, your investment will be eligible for EIS (up to 30% tax relief on your investment).

Help us make this a social enterprise that everyone wants to talk about... tell your friends, tell your family, tell the dog!

The Crowdcube video is here. It is hard to watch this and then comprehend that the company, due to X3 its turnover in 2018, has now sunk. 

This was expansion capital - the company had been trading for 3 years. They had a 16,000 sq ft factory with 14 staff. Well that was the story.

They came second in the 2015 Pitch to Rich Branson fiasco event - which really should have told investors to stay clear. Branson or his Virgin Start Up brand have a lot to answer for. Even entering is a sign of a seriously poor business.

Following closely on the Emoov scandal, the only news on the Crowdcube site is about the £20m raise by Monzo. Says all you need to know. 

Of course most of this could have been avoided if we had had ECFBuzz up and running. Still in over funding on Indiegogo here

Thursday, 6 December 2018

Hallelujah - We have reached our minimum target on Indiegogo in just two weeks



A huge Thank You to all supporters -we have now, after just 2 weeks, reached our minimum target.


It is clear listening to the noise on line over the Emoov fiasco, that many of the 1000+ investors in the second round on Crowdcube, just 3 months ago, had little idea what they were doing. Now they have probably lost the lot but certainly lost most of it. 

Only by giving more power to investors and giving them the right tools to make sensible decisions, can we change what is a race to bottom, led by Crowdcube. That is why we started this Indiegogo campaign and the logic of it is clearly not lost on our supporters. 

You can see and join the campaign here -

What the Keuken is going on with Crowdcube success Keuken?



You might well ask. Their London flagship at 8 Eldon St is now a hairdressers and has been for around a year. Crowdcube are still promoting the new shop opening on their website. Their accounts for YE Feb18 could be the construct of a Judd or Serra. FB is two years cold. Twitter didnt. 


159 Crowdcube punters gladly handed over 150k. The accounts, the few lines there are of them, show no cash or seeming value.

We contacted Dominic Dumont the founder and recipient of the £150k. He said last week that he would explain all of this. An email from him yesterday said he had decided not to explain any of it. It ends that he hopes we understand. Sure Dominic, we understand. When will people wake up to the fact  - illustrated here and with the ongoing fiasco at Emoov, that Crowdcube do not do any due diligence and do not care about investors.....at all.

Is this what Crowdcube mean by encouraging entrepreneurs to have a go? Surely there must be line over which having a go becomes having a laugh. It is such a dreadful waste of valuable resource.

Keuken's website, once you've wiped the cobwebs off, talks of servicing but the accounts suggest that they dont even do this. The company is literally worthless.

Maybe we missed something, maybe the accounts are wrong. Or maybe it is just another example of the very poor businesses Crowdcube promote. Ones that they themselves do not even know have now left the building. This patient looks blue to us. And so do many many more of Crowdcube's success stories. 

It is why we really do need our new ECF Buzz initiative to enable investors to make better informed decisions. It is clear Crowdcube will keep on presenting poor business ideas for as long as you keep blindly investing. Take a look - https://www.indiegogo.com/projects/ecf-buzz-the-crowd-investors-information-centre/x/19804529/ - it is there to help you.

Wednesday, 5 December 2018

Financial Ombudsman and Crowdcube's response to the Emoov Fiasco - Nothing to do with us mate



This is a disgrace but it is also exactly what we predicted Crowdcube would say. Thank you to the investor who forwarded this and who is now a member of ECF.Buzz - so it wont happen again. Shame on you Luke Lang and Darren Westlake - 


Dear xx

Thank you for your email, which we will consider and respond to as a formal complaint. 

We understand and share your disappointment at the outcome for Emoov investors. However, as we underline on our platform, there is a very real risk when investing in startups and growth companies. As always, Emoov’s pitch was reviewed according to our due diligence charter, and approved as a financial promotion.

Any claims made on the company’s pitch on Crowdcube, including the financial section of the pitch, were subject to our standard due diligence and were therefore verified with evidence before being approved as a financial promotion. Any additional claims made outside of the pitch or post the raise on Crowdcube, would not be verified or approved as a financial promotion by Crowdcube. 

In the cooling off email that was provided to all investors prior to the capture of funds, the company reduced its valuation and confirmed that they would require additional funding. Investors were able to withdraw their investment during that cooling off period.
You can access our Due Diligence Charter, which is public on the Crowdcube site, 
here

It’s always disappointing when a business doesn’t succeed but please be assured that we will be liaising with the administrator over the coming weeks and we will provide further updates to investors when possible. 

Please consider this email as our official response to your complaint. If you feel we are unable to rectify your complaint to your satisfaction, we would like to make you aware of your rights to escalate your complaint to the Financial Ombudsman Service at the below details:

Financial Ombudsman Service
Exchange Tower
London
E14 9SR
website: 
www.financial-ombudsman.org.uk 
email: 
complaint.info@financial-ombudsman.org.uk 
phone: 0800 023 4567 or 0300 123 9123

Unbelievable. 


Monday, 3 December 2018

Emoov goes into Administration taking down its staff and shareholders as a goodbye Christmas present.



This Emoov fiasco is some serious caca. And we dont think the directors who managed to persuade so many Crowdcube investors to pile money into the company on the back of some watery promises will have heard the last of it.


This is one of the worst suicide notes we seen in recent times - it starts by making the false assumption, that the directors were entrepreneurs. I can think of words to describe them, but entrepreneur is not on the list - 

"They say that entrepreneurs should never give up. But at the same time one needs to know when efforts have been truly exhausted and when you simply have to call it a day.
"Regretfully and despite my significant endeavours over this weekend to achieve such, the prospective purchasers that have been in the wings have not come through with viable offers to acquire the Emoov business.
"In good faith, my absolute quest over the past few weeks has been to secure the future of Emoov under a new owner in order that staff and customers would have continuity and certainty. Sadly, that is not now to be.
"At 1pm today [Monday December 3] I held a call with Emoov board members where it was agreed to appoint James Cowper Kreston as administrators. Once this intention is filed with the court later today they will take charge of the affairs of the company and its staff, customers and creditors and will work to secure an ultimate buyer.
"Today is a truly sad day - but at the same time I am sincerely grateful to you all for your support, your loyalty and your hard work over the nine years since I founded the business. I'm especially touched by those that have attended the office and that have continued to work with me over the last few days in spite of the dark clouds that have gathered of late.
"I am also extremely grateful to specific shareholders such as Simon Murdoch of Episode 1; Gaby Salem of wharton Capital; and Alexander Lazarev of Maxfield Capital whom have been of immense support and professionalism since investing and in the last few weeks and months, fighting with me to preserve the company.   
"We built a business together that made positive noise, punched well above its weight and sought to make the home buying and selling experience better. We commanded a position as a well recognised thought leader and commentator and that led with a customer first, value led, tech enabled proposition. I'm proud of that and I am proud of all of you on that journey as the integral part of it. Our tech, systems, brand, TV ads, profile etc were all important components - but the team remains THE most important aspect by far. This is often underestimated by others. 
"So, thank you. But above all, I'm so sincerely sorry that it has come to this. 
"Peter Whalley and Tom Russell at James Cowper Kreston will be in contact and will guide you through the important aspects of the next steps." 

Bottom line is if buyers had been in the wings and the business was worth what he told us it was , they would have bought. BS only sticks for so long, no matter how much you throw at the wall. Crowdcube investors were told certain things that have turned out to be less than accurate. Crowdcube need to step up and explain how that could happen. The FCA need to step up and explain how they allowed Crowdcube to let that happen. Of course neither will do a thing. They never do. 
We wrote about this here when they announced they were going to 'sell'  the company. The only sensible thing that has come out of this is that this company couldnt be sold. You have to ask why. 

The Crowdcube Emoov second raise - just a few months ago for £1.8m, means that Crowdcube has enabled this shambles to raise £4.4m from the public. Just 2
months or so ago, Crowdcube were happy to enable this company to sell its equity on their platform at a valuation of £100m. £100m. And we warned you all not to invest. Is it right that Crowdcube get to keep their commission whilst their investors get shafted and the Emoov staff spend Christmas unemployed? Where is the justice in that?
Yet another reason why ECF Buzz needs to be launched - join up here if you want to do something -https://www.indiegogo.com/projects/ecf-buzz-the-crowd-investors-information-centre/x/19804529/

Water to Go returns to Crowdcube after 4 years. How have they done?



Water to Go raised £191k on Crowdube in 2014. Its filtered water bottles promised the earth but have since failed to deliver much apart from £1.15m of accumulated losses. Now they are back on Crowdcube at the same valuation as 2014.


We wouldnt bother to highlight this new pitch of theirs had they been a little more honest. Their new Crowdcube pitch hardly mentions the 2014 raise - it gets a line about how oversubscribed it was. What investors want to know guys is how you have done in 4 years - what have you achieved and the honest reason you are now looking for new cash. This is not a game where the person who best hides the truth, wins.

Just to be clear, we are working with historic data, so 2018 could have seen sales soaring and business in profit. What we do know is that in 2014, the company told investors it hoped to be making a profit in 2016 of £2.5m on revenues of £10.9m. The actual revenue for 2016 as recorded in their filed accounts was £323k with losses for the year of £312k. This £323k is about half of the 2015 figure. The company has made nothing but losses since 2014. Yet the Crowdcube projections showed nothing but profits. 

All the above is not available in the latest Crowdcube Water to Go page. Is that misleading - you decide. 

So what about now? Well the company certainly needs cash. But with reviews that have a common theme - the bottles are not robust and do leak  - it needs a a lot more than that. These are recent reviews. This is not mentioned on Crowdcube but is in plain sight for anyone looking into the company. That is not sensible. 

One of the key problems with this product is that the mass market it seeks to access is not a market than can afford its high price tag. Third world countries where water supplies are troubled by bacteria are not inhabited by people with a spare £25. Likewise countries that do have plenty of such people, have water supplies that do not need a filter. There is a total misalignment. That might explain why after 4 years pummelling the roads to try to sell this product, sales went down last year. There are now of course plenty of alternatives - whereas 4 years ago Water to Go did have an advantage.

But the investment now may make sense - they have a new team to promote and they are still in business and one hopes, would have learnt a lot. Just be aware of what has happened since 2014 and make an informed decision. Crowdcube have failed to mention most of this.  This is exactly why ECF Buzz is so needed......Join us https://www.indiegogo.com/projects/ecf-buzz-the-crowd-investors-information-centre/x/19804529/

Buy this book - you will not regret it.



This is a book for anyone interested in the world of Angel investment should buy and read. It is the sort of book that you will still be fingering through in ten years time just to check that piece of advice. 


You can find the book on Peter's website here. He was kind enough to give me one when we met recently to discuss various things including ECF Buzz - he is now a Founding Member.

Peter has a real depth of knowledge and is still out there travelling the world imparting his wisdom. That knowledge base is invaluable. You can't buy that - well you can now. That is why the book is worth reading and owning. 

Sunday, 2 December 2018

So what did happen to Crowdcube's Glint Pay campaign?



Glint Pay successfully ran an equity crowdfunding Crowdcube campaign late this summer, raising over £2.2m. Now the campaign is no longer on Crowdcube and we understand that the money never went to the company? So what happened?

On this topic - a reader has pointed put that Nebeus raised over £1m on Crowdcube in September but then pulled the campaign. Anyone know why?? Crowdcube pitch has been removed as usual. What was is it Luke was saying about Crowdcube being open and honest? Oh that's right - nothing honest. Nebeus have now told us that they pulled the campaign (once completed) as they have 'decided to continue our plans independent' (not my typo). It says a lot for a company that it can arrange and then run a £1m plus ECF campaign and then cancel it after completion because it has changed its mind. Avoid would be the best advice. What the ...........are Crowdcube playing at?????

Glint Pay still have this on their website - https://glintpay.com/crowdfunding/ telling everyone what a great success the raise was. Follow the link to Crowdcube and you get a blank.

It wouldnt be the first time that a successful campaign ends up being ditched once the paperwork starts but it would be interesting to know if there is anything odd going on here. So if you are one of 1600 individual investors who thought they had bought shares in Glint Pay please do get in touch - we'd love to hear the story.

And again this is why we need the independent forum that ECF Buzz will offer all investors - see here and please join us - https://www.indiegogo.com/projects/ecf-buzz-the-crowd-investors-information-centre/x/19804529/

Friday, 30 November 2018

Are Monzo guilty, as charged, of promoting their overdrafts to buy shares in their new £20m equity round?



This is one of those instances where different people see different things in the same statement.


In this case we think the Times have got it wrong. Which is rare.

https://www.thetimes.co.uk/article/monzo-lends-customers-money-to-buy-its-shares-375nmdc6r 

Monzo state in the prospectus for raising £20m, that customers need to have enough money in their accounts to purchase shares. This 'enough' can include their OD if they have one, it goes on to say. Of course we all know that these shares in Monzo are illiquid for now and may always illiquid.

What is does not say is that Monzo recommend or even suggest that customers use their Monzo OD to purchase shares in Monzo. That much is very clear. At this stage of the process only Monzo customers can purchase these shares - it has not been opened up to the public yet. This is all part of the requirement for Monzo to offer existing SHs first bite. And Monzo state that customers must use their Monzo accounts to buy these shares - a solid way of increasing usage. It seems this may all have been misread.

This wording doesn't reflect well on Monzo but the article doesn't reflect well on The Times. Monzo could have been more careful to separate the sentence about buying shares and the one about the OD.
If the prospectus was promoting an offer of a Monzo overdraft to buy illiquid shares in Monzo, then the Times piece would be legitimate. But Im really struggling to make that case by reading what Monzo have actually written. 

What would have made and might well make a better article is to ask just how Monzo go about judging if applicants should be given a £1000 OD. We are told that it's really pretty easy to get one and that the 'checking' is largely self assessment. Now that is something to worry about.




Wednesday, 28 November 2018

Driverless companies, plane-less Airlines and accounting errors make up Crowdcube successes.



Two of Crowdcube's successes that are about to file accounts, are less than they seem. Cgon has no one driving the company and Odyssey (Airlines), one the longest tales in ECF history, has no planes. Another one that has just filed more losses has admitted a major accounting error in the previous year. 


£1m was invested into Odyssey and £160k into Cgon. And £191k was invested in Water to Go. 

Cgon make and sell a fuel enhancement box but all the original directors have now left and the company is being run by a director appointed just this year - someone who recently came from a PPI claims company aptly named Claim Hunters, which us run by the guy who set up Cgon but is no longer a director. Seems cosy.   Claim Hunters' last accounts show a profit of £170k. It does seem odd that Cgon, an engineering company with cutting edge technology can be run without its engineers at the helm.

Odyssey Airline have yet to take off. It is a tough ask without planes.

Water to Go have filed more losses for YE Dec17, on falling sales and it leaves them in deficit for £450k. Sales for the year were almost half the figure of two years ago. Their accounts show that the previous year's stock had been over valued by £100k. Software error. So a small company declares it has £280k of stock at YE but it turns out £110k of this is thin air. Come on. Software error or should have gone to Specsavers? The warehouse must have seemed a little empty. 5 aside anyone?

All three companies are currently in Crowdcube's doing well PRing. Surely we need an independent platform that produces this information and allows investors to see the real state of affairs - not Crowdcube's version.

You should all look at this - https://www.indiegogo.com/projects/ecf-buzz-the-crowd-investors-information-centre/x/19804529/

Rentify file losses of just under £2m as they reach for more stars.



Rentify are one of Crowdcube's million plus club. £1.38m in 2016 to be precise. They were due to make heavy losses whilst they gained traction but it appears that subsequent funding has not materialised and now the company accounts show a deficit of £2.25m; up from £500k. 

Rentify are also backed by Crowdcube's big daddy, Balderton Capital. Helps to keep it in the family.

Rentify are not a million miles off their p&l forecast - well £300k isn't a lot on Crowdcube. The main problem seems to be the lack of investment. Projections show the company having over £12m in share capital by YE Dec17 but the accounts are over £3m short of that.

Why Balderton have not reached into their deep pockets for this one is unknown. They have of course spent quite a sum on Crowdcube since 2016.

Rentify had £2.5m of current creditors and only a fraction of that in the bank or due. One of the major debts is to HMRC  - around £160k in back taxes mostly related to the staff of 26 - this £160k being more than double the year before, when they had more staff. Trade debtors has fallen by 75% from £40k to £10k. Could be new systems or something else less helpful.

These are the same guys we wrote about recently who have made up their Trust pilot star rating. According to them it's a 5 star. According to Trust Pilot it is 3 star. Who believes star ratings anyway but you'd think they wouldn't make them up! Latest one posted is a 1 star. Our rule with these ratings and we have some experience in the last 20 years, is to look carefully at the poor ones to see if there is a common thread. Many of the good ones are set up and so are many of the rest but a thread leads to the truth. There is a thread with the 1 star ratings for Rentify.  Onwards and sideways.

 

Sunday, 25 November 2018

Kokoon - selling on line to raise funds to deliver 3 year old Kickstarter stock?



This is a Cuckoo Clock. If you watch it for long enough it will chime. Well it will chime before most Kokoon backers get their 3 year late headphones. 


We thought that recently Kokoon, which raised £1.65m on Crowdcube a year ago, might have got their act together. Like their deliveries, we called it too early.

When Crowdcube punters invested in this company, on the back of promises that the product was ready to go, they were duped. We shouted this out at the time - it was obvious from the feedback on the then 2 year overdue delivery, that the company had some serious problems. Having sold several thousand units on Kickstarter and spent the cash, they came to Crowdcube to raise money to make the units they had already sold. The money from these sales was promoted as an asset rather than a liability. As of today, only a few have been delivered. The spec has been lowered the tech reduced. Refunds have been demanded.

Now if Crowdcube investors had been members of our soon to be launched ECFBuzz site, where all of this information would have been available and they could have chatted to KS backers, they might still have invested but with the full facts.

https://www.indiegogo.com/projects/ecf-buzz-the-crowd-investors-information-centre/x/19804529#/  

Neither Crowdcube nor Kokoon told investors the full facts. The headphones were not ready to make and ship out - they were still in testing. Testing that has resulted in the product being altered and delayed.

Now their website is promoting a Black Friday Weekend 30% off offer, for delivery by December 2018 in the UK. But people who bought this product on KS 3 years ago have no product and no idea when they will get one  - if ever.

Is it possible that the company is selling product on line now, knowing it cant deliver (this is after similar to the outcome on KS) to raise funds to make more items to deliver? Cannibalism on speed. 

Friday, 23 November 2018

So why is the launch of ECF.Buzz so important for the future of Equity Crowdfunding? A Call to Action



It's a little like the current Brexit conundrum. Ignoring whether you voted to leave or remain, no one in 2016 could have known what we now know. The vote was based on misinformation, spin, lies and good dose of inevitable ignorance on both sides. Many things were simply unknowable. 


Well the same is true of the 8 year journey that ECf has taken. No one knew in 2011 that the information supplied by the major platforms and their pitching companies would prove to be so far from the real outcomes. No one knew that successful exits would be so low. No one knew that so many companies would become Zombies. No one knew that PR would be the main channel for the creation of these investment platforms and that the truth would be sidelined.

But we do now. Do you?

A state of ignorance suited the platforms - who would invest in a newco that projected steady unspectacular progress or a down round 2 years later? Who would invest via a platform where time and time again failed companies reveal that not all the relevant information supplied was correct. No one, if they knew this but the PR has drowned out the truth. 

ECF is a great idea for both investors who want to be involved in start ups and companies who genuinely have a good plan and need funding. But that equation has a fundamental flaw - greedy platforms that have used misinformation and PR to make poor decisions to gain commission income. It is time the investors took back some control. But most do not know how to. Investing is a professional activity  - it's not like fishing or golfing at the weekend. The platforms will tell it is - they want your money. But would you really ask a mate to fly you somewhere, without proof he had a licence? People need educating - only then can they invest sensibly. 

Take for example the recent Crowdcube raise on their own site. People have asked Q's that have been removed on topics that did not paint the required PR. This blog has been mentioned and removed. Censorship is a sure sign that what's in that closed cupboard is not all on the inventory. 

Investors are being hoodwinked and I have to tell you that the platforms are finding it far too easy to do. When you get Qs from people, who claim to be regular investors in ECF,
about when they will get their money back or what it will buy, it is clear that they do not know what they are buying. Like the guy who gets on a train, buys a ticket and then asks where it is going.

Now a lot of people do not like the way I go about this - too aggressive they say. Well this is not about me. Most people I speak to - investors,companies and the platforms, agree that if you keep presenting poor ideas run with poor management and dress them up using glamorous projections to sell them - eventually investors will turn away. The evidence for this was clear on Crowdcube's latest round. It is clear from the 1100 posts here.  Give investors the right tools and they can ask the Qs and solve this for themselves. Crowdcube, with decent companies pitching, can be a great success. So forget about Marmite. 

The idea behind ECF.Buzz is to help level the playing field, so that investors are not at the bottom of a 1:3.We want to give you the tools to find out for yourselves what makes a good company and a great idea. The tools to scrutinise company accounts and financial forecasts. The tools to know about IP and patents and make the most of your investments. As well as a place where you can talk to other investors without your Qs being censored. A place where you can find out about what really happened to company XYZ or Joe XXXX its founder, rather than accepting the guff the platform told you.

In the 2 days we have been live, Crowdcube's campaign has raised over £200k to add to its £7.1m total. Do you really believe there is any chance that these investors know what they are doing? At the same time their forum has had unanswered Qs about how many zombies they have funded - we know the answer to that!

But we cant make a difference without your help - you will be helping yourselves. We need you to get involved to help spread the word. Post us up on Crowdcube's and Seedrs' forums - give people the chance to look at our research at least. Tell friends and colleagues about us. Tell them about the Indiegogo campaign we are running to raise funding for the new site. We need to raise a minimum of £15k in reality to allow this to happen. We will need funds to build the site, join a variety of information resource companies, have guest experts answer Qs and build our community.

Please take a look - 


If we fail to get this funding then that will be that. It is unlikely the blog would continue if I know that the support just isn't there. That's why we launched the Indiegogo campaign, to confirm one way or the other if we could build on the blog. I cannot accept that the status quo, where most investors are throwing away millions without having a clue what they are doing, is as it should be. UKplc is not gaining. You are not gaining. Failed companies and their creditors are not gaining. Only the platforms are gaining. Surely it is time for action? 

Powervault lose £1.95m. Crowdcube cruise on. Sunset waiting?



Powervault is a Crowdcube favourite. We think it has raised 4 times now and for YE September 18 it raised another £650k off the platform. 


Of course this is not the picture investors were sold. 

Losses for YE Sept 18 were £1.95m. Looks like more money will be required shortly.

And what is the £500k CA marked Corporation Tax Recoverable? R&D? No real increase in intangibles and no real intangibles in FA. For it to be recoverable corp tax it would have to be against a very substantial profit for 2019. Since when did current assets include projected profits?

Why the very early filing of their accounts?

A new deal with EDF Energy will surely turn things around? Investors will have to hope so.  


Thursday, 22 November 2018

Verv launch new downround on Crowdcube - just as Crowdcube take £7.4m off their own investors



It's a crazy world. Just as Crowdcube complete an almost successful £7.4m round for themselves (target £8.5m), Verv, a recently funded Crowdcube success, has opened a new campaign with a 20% discounted valuation. 


Sounds like the sort of thing investors might like to discuss on an independent forum - like our new ECF.Buzz.

It is even crazier that the director of the Verv company, answering a Q on the CC forum about how the original valuation was created, has stated that they used discounted cash flow. DCF cannot be used without a good depth of historic revenue data. Verv had no such history. He then compounds this by stating that they have lowered the current valuation in order to raise much needed new funding! Sort of explains a lot doesnt it.

Had investors in round one been better informed, by using ECF.Buzz, then they might have persuaded Verv to lower what has now been shown to be a nonsense valuation and spared everyone this nonsense. Maybe had Verv used ECF.Buzz, they might not have made themselves look so totally ridiculous. 

Rentify tempted to tell you what is not quite true




Rentify raised £1.3m on Crowdcube. Now their website declares the company has a 5 star rating from Trustpilot.


The real TP rating - the one on TP's site - gives Rentify 3 stars.

What Rentify have done is cunning. They have produced an image of 5 stars with the TP logo as if it it is the TP rating. Its there front and centre on their home page; you cant miss it. Then underneath they have written 'over 400 5 reviews', where it is quite easily missed. They do have over 400 5 star reviews. But Trustpilot produce an aggregate star rating - they are not about the 5 star or the 1 star reviews only. For example say a company has 5000 reviews - 450 of them are 5 star but the rest are 1 and 2 star. You could not claim that your Trustpilot rating was 5 star - unless you lied. It would be below 2. But you could still claim you had over 400 5 star reviews.

This is certainly misleading if nothing else. The claim is they have a 5 star rating with Trustpilot. They do not. Is that indicative of a company ethos?

Balderton Capital, major Crowdcube backers, are also one of Rentify's main funders. The company is currently late filing accounts. According to their Crowdcube numbers this year saw them leap into £1m+ net profit territory. Hope that wasnt too misleading.

Tuesday, 20 November 2018

We are LIVE - our new Indiegogo campaign to raise cash for a new platform has just been launched.



You can find the link to the Indiegogo page below. WE are now LIVE. A campaign to fund the first Independent Information Resource for Equity Crowdfunders. Your chance to help make it happen.




Please take a look and let us know what you think. 

Memberships are discounted for this campaign and early members will receive special perks. 

It is time investors took back some control!

JOIN US.  

Sunday, 18 November 2018

Fanmade Services now file accounts for a dormant company



Fanmade Services raised £224k on Crowdcube in 2014. Now with a website that says it has expired and an app, Sporting Mouth, that we couldnt find, the company has filed accounts for YE Feb18 stating they didnt trade. That is a lot that isnt happening. 

The accounts show the money is all but gone and that one of the few activities for the year was a  partial repayment of a director's loan.

This result for a Crowdcube funded company is particularly pertinent right now. Coming as it does at the same time as Luke Lang from Crowdcube has been telling everyone that their selection of businesses is far superior to any other ECF platform. Right.

This giant is asleep but not dead. It does make you wonder though, that a company can take this size of investment and then file dormant accounts. It has no fixed assets.

Maybe if we all shout WAKE UP that would get him moving again? 

Saturday, 17 November 2018

Crowdcube's disastrous launch of their investor fee confirms their poor management.



Management is about is managing clients and planning ahead. Crowdcube decided to try and sneak a new investor fee passed their clients in conjunction with their new raise. The clients noticed. 


We say they decided to do this but in reality it probably just happened wihtout any planning - like many things on he platform. In fact in the same rather haphazard way they have grown the loss making company.

After a barrage of questions, Crowdcube have now been forced to admit that not only did they not tell investors about this new tax on their investments, apart from in the FAQ section (who reads that regularly?), they also failed to charge the VCs who have put money into this round, whilst hitting the small investors with the full amount. 

Luke, who has never knowingly apologised for any of the company's many flaws, has been forced to publish an apology and pay these fees (eventually collected) into a charity. Nice gesture but it wont let you off the hook Luke.

This is clearly some gross mismanagement and quite rightly investors are angry about it. To rub salt into the wound, both Luke and Darren have made a good load of cash in this round by selling some of the their shares to Draper Esprit. When asked to explain why this facility wasnt passed onto small shareholders (ie their clients) they said that the management had earned this right. Eh?

Well we have been saying for some years that both Luke and Darren do not have what it takes to build a large successful business. Nothing we have seen so far changes this opinion. Darren, as we have pointed out before, claims to have had successful telecom businesses in the past but on checking these, they turn out to be less than successful - liquidated in fact. Luke is just good at PR. The idea of crowdfunding is good but their model is rubbish. We produce almost daily proof of this here. Why dont their investors get the message?