Thursday, 12 April 2018

Yet another Crowdcube success fails



We agreed not to disclose the name of this company, as they are trying to complete a deal that will mean they dont have to liquidate. But it is a busted flush in terms of the business and its 200 plus Crowdcube shareholders.


The CEO of XX has promised to give us the details of how the company came to this situation, in a month or so. He said he would also reveal his feelings about Crowdcube. That should all make for interesting reading. It is at least some progress to see a CEO who has used Crowdcube, try to clear up the mess rather than phoenixing or just disappearing as most of them do.

This company had some substantial Government backing, something that may well have swayed Crowdcube investors. You know how it works - oh look such and such which has a board crammed full of experienced business leaders has backed this venture, so better come on board. Only 2 years later and bang - its all gone tits up. All the investment burnt.

Just in case you are wondering, the 'sale' in progress is more of a handover with next to zero return for anyone. 

We'll let you know.

Thanks to the tip off from anon.  


14 comments:

  1. How about some positive news for a change, revolut's new round at 30x crowdcube valuation or fourex' round at multiple valuation and international expansion.

    Probably both well behind their initial cc projections, but surely this is encouraging

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    1. Im sorry but if you want good news try the Crowdfund Insider rag - they only print stories where massive increases in new capital raise valuations, tell us the company is doing really well. They dont cover any of the many failures - which are hard cold facts. As Im sure you are aware we dont write about maybe's, just the facts. Revolut is in fact roughly on target and has pretty disappeared off our radar as CC investors are never likely to see a ROI after dilution etc. Coino Uk (Fourex is their T/a name) have just raised a large sum but so what? Have they returned anything to SHs - no. In fact what evidence is there that they are doing well - I could only find their own PR?

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    2. Further checking shows Fourex have just 15 kiosks in operation - all in London. International expansion is it? they may ell go on to expand and make you lots of oney and we will write about that when it happens - not before.

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    3. I can't follow your logic on Revolut, it'll be a Unicorn now and even after dilution cc investors currently see the value of their investment up approx 20fold.

      You're right, investors won't get any return until an exit. But if that happens the ROI will be massive, I think it should be on top of your radar.

      The fact that they went to SEEDRS for their second round is another story though ;-)

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    4. The journey from here to exit will be a long one with a lot more dilution and IMO CC and also Seedrs investors may just get rubbed out - that is if they make it. I see the latest backers have Russian associations. That's not great. And if you read the piece carefully, the deal has not been concluded yet - so yet more facts being made out of maybe's. https://www.recode.net/2018/4/11/17219352/revolut-dst-global-financing-valuation-digital-banking. If we printed this as fact and as good news, as you wished, we would be as useless as Crowdfund Insider. Luckily for you we are not.

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  2. Point taken, thanks for your view.

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  3. Seedrs investors in Revolut get anti dilution protection on a down valuation so don’t think they will get rubbed out

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    1. Thats fine until the company changes the the policy by SH vote - oh and Seedrs investors are outvoted. It has happened plenty of times already.

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  4. I don’t think that can happen in this case. The seedrs shares are preferential C shares, which are exactly the same as those held by the VCs that invested in the round. If you look on companies house you will see that information

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  5. Rob, also check the situation at Manigo on CC. Raised half million from 355 investors as a startup concept, valuation of 3M but not yet operational since January 2018. All normal ? Smells fishy to me.

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    1. I rang their customer services number but there was just music. Website says app is in beta testing. But where are the shares?

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    2. Had a reply from the CEO today - seems to all be on track. Delay with paperwork and beta testing underway. Keep watching.

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