Monday, 12 March 2018

Berrywhite reappear on Seedrs having been delisted on Crowdcube - Are you going to love them just a little bit more?

Berrywhite's downround saga keeps on rolling...just keeps on rolling....rolling to the river.

We highlighted BW's odd and possibly illegal tactics on Crowdcube in Round 2 - here. In an attempt to get over the line, the founder had offered to sell investors his own shares at a discount - but only investors who came in at the end of the campaign ie a late incentive to drive over the line (maybe a clue there for Eddie). Thereby crashing the one sacrosanct rule of ECf  - all shares offered must be offered pari passu. As a result Crowdcube closed their campaign down, even though they were close to completing. 

Now we understand the company is on Seedrs and providing they reach their new target £50k at the lower valuation of £900k, before going public, they will be allowed to use this platform. Presumably BW hopes you will love them just a little bit more and £50k will over fund to £150k. It is very messy and really not what we want to see from platforms - even if they have so much to give.  

BW funded in their first round on Crowdcube at a valuation of £5m. The failed Crowdcube second round started at £2.7m and ended (just as it was pulled) with attempts to lower this to £900k. Desperate times. 

Anyone reading this blog, knows we have a thing about these crazy 'valuations' and how they have driven companies to make up ludicrous projections to justify them.  These crazy valuations then push the company to over trade and bang, it's curtains. You need look no further for an example of this than BW. It should have gone from £900k to £5m - not backwards. Investors on Crowdcube are not bright enough to get this  - yet. Although they must be catching on by now?

By way of a factual illustration in this case, for YE December 2016 BW, who was never never gonna give you up, projected profits of £1.6m. Accounts filed show losses of £275k. We would expect that a company with this history of dubious projections, might want to reassure investors now, by publishing YE December 2017 accounts - but they havent. 

One might feel a little sympathy for the founder if he hadnt been such a greedy so and so in the first place. Anyone looking to invest now, would do well to go over the numbers with a microscope and then half all the revenues and double the costs.  BW, what am I going to do with you?


  1. From the pitch:
    Berrywhite has limited runway remaining, successful completion of this fundraise is necessary for viable continuation of the business as a going concern over the next 3 - 6 months. Depending on sales over this period it will likely be necessary for the business to raise further funds.

    1. Well, at least that sounds commendably frank.

    2. Seedrs must have made them put that in the pitch.

  2. Hard to see how you could invest on the basis that your investment is going to keep the company going for only 3 to 6 months. Ridelink all over again