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.