Wooha has valued itself at 5m on Crowdcube - this is for a business with a couple of years trading at well below the £500k mark. That tartan IP must be worth something!
It's good to see a Scottish company raising equity crowdfunding - there have been very few. Unfortunately this one has made a catastrophic error. Jam tomorrow has played its part in a £5m valuation when the fruit hasnt even boiled yet.
A comparison to another brewing pitch launched just now on the same platform, valued at under £4m, is enough to convince me that Wooha will not fund at this level - despite some impressive sales pipelines and a founder who talks the talk. The other pitch already has revenues of almost £1m pa.
Of course we emailed them when we realised their predicament but its a little after the horse has bolted. The forum is already filling up with Qs on what the F is that valuation!
In response to these Qs, the founders can only point to jam tomorrow - their US sales targets. This market has been ongoing for all of a few months yet it is held up as a banker for a £5m company. We all know the potential pitfalls of handing over distribution in foreign countries to overseas distributors. Then being disappointed that one of 100 reasons means the take up is slow. If you plan for a slower burn, then these things are doable - but then that would mean a lower valuation. Ah yes -back to that again.
Reality will set in and they will lower the valuation at some stage - better to do it right now. But the damage may have been done - why not use some good old common sense and ask for our advice?