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 - https://www.crowdfundinsider.com/2018/09/138874-digital-banking-solution-gohenry-set-to-return-to-crowdcube/

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

Affresol---------------------Liquidated----------------------------------------------------------------

Berrywhite------------------Liquidated----------------------------------------------------------------

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

Vakay-----------------------Site down and didnt raise £500k extra funding. 

Estatesdirect.com----------Sold 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.