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Wednesday, 10 July 2019

ECF.Buzz is launching on 10th July 2019 - things will never be the same again!



10th July - the very same day Lady Godiva, The Countess of Mercia, rode naked through the streets of Coventry. That is the date for the launch of our new Equity Crowdfunding site ECF.Buzz. 


The two are not necessarily related. However as with Godiva, we are attempting to break the status quo and improve what is a hapless situation. Luckily for everyone, Im keeping my clothes on. And whereas her story is myth, ours is for real. 

This blog will be moving - to the new site. At ECF.Buzz everyone will have free access to the latest  blog posts but the archive will be kept for members. That along with the host of other great facilities we are offering - all of which are aimed at helping investors make better, more informed decisions. In this way we hope to improve the level of businesses being funded and eventually force the platforms to improve the offers they present. All round, this will improve Equity Crowdfunding. 

And from what we are being told, this is long overdue. It is time for Investors to take back control. 

Reasons to join Our Crowd

  • Independent Forum for knowledge transfer without interference from the platforms.
  • Huge knowledge resource on all things to do with investing in start ups.
  • Experts opinions and articles.
  • Company Tracker - our very own record of 1300 ECF funded companies 
  • Buzz Rating - our bespoke, handmade, analysis of funded pitches and how they are doing. 
  • MyTracker - get your very own personal service to help you keep tabs on your investments
  • The now almost famous Blog
  • Latest News on the sector.
  • ROI & RIP - definitive lists of companies that have made a return for investors and those that have failed. This will be accurate - unlike data on say Crunchbase, which is almost all faulty.  
So what do you say -  lets all get our kit off and celebrate the 10th July 2019. 
Go Diva!! Go Buzz!!

Saturday, 6 July 2019

Another Crowdcube Zombie calls it a day - Workabode liquidates after raising twice on the FCA regulated platform



Founder Trevor O'Hara is a cracker - he's from Ireland. This is not a story of a near miss or bad luck. It's not even a joke. No, this is a story about nonsense, about promoting £21m of net profit, rising to £35m next year and delivering liquidation. It is not a story anyone would wish to see repeated. 


Trevor sent his shareholders a short communique stating that for reasons outside of his control he had to close the business. In plain English - I have spent all the money and now the bank account is dry, it's time to go and do something else. Nowhere in this pathetic excuse of an email does he attempt to apologies or recognise his own failure. 

He used Crowdcube twice to raise a total of £380k in 2014 and 2015. The business has been in the waiting room ever since. Meanwhile, Trevor has been evangelising about how to make great businesses. 

He is under the allusion that the way you scrap a UK business  - one registered at CH - is by creating an official looking document in Word and heading it - Notice of Company Dissolution. You then include phrases like  - ' Notice is hereby Given .........' and that is that. Trevor, that may be the Irish way but it wont work here. Shareholders would be advised to act now to see if there is any money they can get back from Trevor. Or indeed from Crowdcube if the pitch was in anyway misleading - £35m net profits!! ECF.Buzz has advice on all of this. Investors need to take back control.  

We wrote about this nonsense before here - he threatened to come after us! Looks like we were right - or more correctly, he was certainly wrong. You get them and they are best avoided. Now he is logged in, all ECF Buzz members can do that. Our Buzz Rating for this one has been spot on - Zombie waiting to go down. Goodbye and please dont come back.  

Friday, 5 July 2019

BeerBods sells out to ABV



Beerbods raised a total of £400k on Crowdcube in two rounds. Now Matt Lane has sold the business to Beer Hawk, recently acquired by ABV incubator ZX Ventures. 


This is exactly the sort of transaction that will make equity crowdfunding work; if it gives investors in BeerBods a return. Lane admits that the sale is forced - ie it's the only option if the company wants to make any immediate headway.

No figures have been disclosed although shareholders will know shortly. In the first round Beerbods was valued at around £400k and then a year later at £2.5m post money. So looks like the 101 first rounders will see a healthy uplift. Not so sure about the others. Accounts show a loss for the year to May18 of £80k.

Lets us know if you know.

Monday, 1 July 2019

A Suit that Fits now doesnt. Liquidation beckons.


After a somewhat bizarre failed rescue attempt, DKSG Bespoke, ASTF's and any other associated companies are heading for the chopper. 


Crowdcube investors who were asked to find £50k to support a new attempt to buy out the on line tailor, appear to have chosen not to. In the circumstances, a wise choice. No doubt the administration/liquidation will shed some light on the very odd goings on. 

Adieu.

The following day - Resurrection? 

We have now seen a new email sent to investors from the Indian side of this saga - Rohinton Mistry's A Fine Balance has fewer threads. He claims that he is the good guy and that he will deliver an end result for investors - but with no return for himself. Pretty much what the other guy promised. Remind you of any lies over our current undeliverable quagmire? It was ever thus. 

Sunday, 30 June 2019

Hapless HAB Housing leave shareholders in the dark



In yet another example of the investor power vacuum, HAB Housing Ltd have filed yet more heavy losses whilst associated companies play swinging doors and restructuring games.  


HAB took £1.8m off Crowdcube investors in 2013 and then another £2m of Crowdbnk investors via a Bond in 2017. Results have so far been on the disappointing side and the GAP between the £8m predicted profit for 2018 and £1m loss is substantial. 

What is more worrying for investors is the silence that has accompanied this. Shareholders we have spoken to say they have been told nothing or very little. HAB Land, an SPV used to purchase land and the company the Bond is in, have now handed over 75% plus control to Bah Restructuring Ltd. McLeaod the TV star who headed up this HAB Crowdfunding share sale has resigned from both HAB Land and HAB Financing plc - as have many other directors. Whilst the building works may not have been busy, the swinging doors certainly have been. 

For a Group that told investors in 2017 that they planned to be building 500 new houses a year by 2020, they seem to have been a little optimistic - or is that misleading? This appeared on  https://www.codeinvesting.com/raising-finance-for-smes-hab-land-interview/




Friday, 28 June 2019

A Suit that Fits enters the realms of fantasies and nightmares.




Simply - it doesnt. Never has done and never will. ASTF funded on Crowdcube and Envestors. Went bust, was exhumed and now sits on the edge of the hole about to slip back in. Meanwhile it appears investors may well have lost more cash. 


This isnt a case of a poor idea or even a good one poorly executed - although execution has not been great. This is about a team who will, by looks of things, end up wanting to kill each other. A team made up of various cultures where it also appears these cultures and their differing attitudes, may have clashed. The story has more twists than a bowline.

We have written about ASTF many times - here - we may make it into a book.

Enough from us  - below is the latest mini saga  - for a read when on a boring train journey.

Since this went out, another desperate email has gone out to SHs asking for more cash.  

Good afternoon.


I am afraid to say that your help is needed, please read on.

Following the recent raise to buy out David Hathiramani and Keith Watson I would like to provide you with a candid timeline of events and the current critical position of the business.

A total of £203,000 was pledged from our investor network, however only £160,000 was actually transferred post raise.

Adjustments were made to budgets and I had every confidence with your support I could drive the business forward and deliver on the objectives outlined.

The day following the raise, David's discontentment was evident at the buy out fee achieved against the amount pledged. A series of challenging text messages were sent to me demanding more money then was communicated to our investor network,with spurious claims of historical money being owed for services rendered, only communicated once the round had closed. I held firm and committed no more then what was agreed. I believe that David's discontentment continued to put significant strain on our relationship to this very day.

During the raise I was lead to believe that the official and legal side of the buy out would take around a month, at which point David and Keith would exit and share certificates would be issued, the new board formed and a fresh start ready for all. To this date the buy out is still not complete, following taking on the role of leading the company there was little to no handover and David and Keith hold all historical investment and financial records which have not been handed to our solicitor in a timely way. It was decided that David would oversee the transaction until today when I intervened challenging why some 5 months later there has been little to no progress. I quote a part of the response here "Part of the delay issue has been due to not receiving coordinated instructions or full  responses to the various emails I have sent".

I have now arranged a call for tomorrow with our largest investor and the solicitor where I aim to understand how this process may be expedited.

The funds raised went to the company you initially invested in, DKSG Bespoke Ltd which owns the ASTF brand, and leases this to Tailored Franchises Ltd whose ownership structure replicates that of DKSG.

This is a company I am a co-Director of, holding a bank account with Lloyds Bank. I have had no access to this account or until recently up to date statements which were assured weekly, the account has essentially been held to ransom by my co-Director and the only person with access to it Keith Watson. I still await a statement for June to have full visibility on the outgoings and an understanding of the true current balance despite requesting it one week ago today.

On inspection of historical statements I see David has paid himself £17,700 in recent months, a figure I am yet to receive any justification for and was not agreed with me, his co-Director.

The impact on the business as a result of this has been significant. £50,000 of the amount raised was intended to fulfil the outstanding orders, as communicated during the raise I was unable to take any new orders until we made a start in completing the historical ones, as such we have not taken a single new order this year and funds raised have been used to sustain the business in the hope the buy out would complete, we could make old orders, take new ones and commence trading again using every penny for the purposes communicated.

The constant stalling with the buy out has been detrimental to the business to the point where Tailored Franchises Ltd has zero cash is unable to make business critical payments to suppliers or staff payroll this week.

My understanding is there is around £25K remaining in the DKSG account which would cover these expenses, however David is unwilling to release funds meaning I essentially have to close the trading business immediately unless David relents or I am able to rally support from you, our investors.

In recent months operating costs have continued to drop and if we expedite the buy out and raise a relatively modest amount of cash I believe we still have a business that can essentially flourish, however I am effectively fighting for something that I am not drawing a salary for and have committed not to in the upcoming months.

Short term (as in the next 24 hours) I need to raise £50K to see us through the next month, by which point I would expect us to be self sufficient and be able to commence trading again.

I have looked at institutional lending for which we are not eligible however I believe we would be eligible for a Funding Circle Loan. This is a high interest loan that requires a personal guarantee. I am happy to offer this personal guarantee such is my belief in the business. I am also looking at a personal loan so I can contribute where necessary and claim back when the business is back on its feet.

I appreciate the context of this email is startling, I frankly feel quite startled also and like I have been fighting a losing battle against people presently yielding more power than I. Whilst late in the day felt it appropriate to reach out in an attempt to rally support before it is too late.

I understand there are likely to be many questions, whether I/Tailored Franchises achieve the mission outlined here. I would like to invite you all and openly invite David Hathiramani and Keith Watson to an event on Tuesday 8th July whereby I /we can answer any questions or concerns this email may raise or how the companies persistent failings lead us to this point, in the interim my sole focus must be survival so please forgive any late responses to questions etc.

In exchange for £50,000 raised in the next 24 hours. We offer BOTH 10% equity in both businesses AND complete complete payback of the amount you support with at this stage over 12 months next year - a modest liability to the business of £4,166.66 a month.

You can commit from £500 up to the full £50,000, funds will need to be received by the end of tomorrow.

If you wish to support please just reply to this email and I will come back to you immediately, any other questions please email ..............................(my other account) and I will come back to you when time permits.

I thank you for your time and will send a progress update tomorrow.

Kind regards

Daniel Warwick 

Wednesday, 26 June 2019

Kokoon lowers valuation by 20% at the end of their Seedrs round to 'accomodate' a £525k investment from an EIS fund.



We strongly recommend that if you want to be cheered up, you read the Kokoon Kickstarter forum. Now in breaking news, the company has written via Seedrs to existing SHs about an exciting development. 


Hard to know where to start with Kokoon  - makers of the sleep enabling headphones that have given thousands of Kickstarter backers sleepless nights, waiting for delivery. 3 years on, the latest batch of comments (4,997 in total) on their pitch page are hilarious - provided you are not a shareholder. We particularly liked this one - 

I listed mine on Ebay with no reserve! Get a great deal. And yes, I will actually ship them to you quickly.

Now in a final twist to their latest ECF round - they started on Crowdcube and are now on Seedrs - they have told SHs that the valuation of this round - which has been on Seedrs for ages - is coming down by 20% to accommodate a large EIS fund investment. So the Crowd was allowed to be over charged but not the EIS fund? Fills you with confidence and belief in ECF doesnt it. 

Oh and we forgot to mention the main reason for the email was to tell SHs they could now take up their pre emption rights at this new exciting discounted value. Are you that stupid?

On the Seedrs pitch there is no mention of the problems with delivery to over 7500 KS backers, the demands for refunds, the breakages, the product downgrading and software inadequacies. What they do tell punters is that they have pre sold £4.5m worth. How much is owed back in refunds, lost in breakages and not delivered at all after 3 years. Those numbers are not available at this time.  

You do have to ask if Seedrs under Jeff Lynne would have allowed this nonsense. 


Syndicate Room's Made in Mind Keeps em Rollin Rollin Rollin..........



Made in Mind (MIM) went into administration on 25 June. It had raised £352k on SR in 2014. Now a version of it is appearing on Kickstarter even before the initial administrators report is out. Shareholders are scratching their heads.


This is a new one for us. The letter sent out to SHs in MIM made the usual excuses and apologies. It made no mention of the just launched KS campaign -

https://www.kickstarter.com/projects/muone/mu-book-wireless-fast-charger-and-carry-case?ref=7vt3bx

The KS campaign is for a version of the product sold by MIM but states that the owner of the campaign is now Discovery Club Ltd. The KS campaign page states

We've had a bit of a shake up. "Mu' and "Made in Mind' now live in the house of Discovery Club Limited. An unlikely crew, with an unlikely knack of delivering great innovation. Between us we've successfully launched dozens of products, raised over £1M for projects via Kickstarter, have won numerous industry awards.

Discovery Club was incorporated on 14 March 2019 and has one Director - Matthew Judkins. Matthew Judkins was the founder of MIM - so actually the same old crew. Judkins is described in the Syndicate Room pitch as 

MiM was co-founded by Matthew Judkins, who has over 10 years’ experience working in commercial positions within the SME sector.'

Matthew is also the guy who wrote to SHs telling them that MIM was being put into administration. 

So SHs might want to know what is going on. We wouldnt mind either. The IP and all that, legally belongs to MIM and its SHs, until such time as the administrators sell it to the newco, Discovery Club - if they are happy that this is legal and within their remit to look after the creditors. In Matthew's goodbye letter he failed to mention Discovery Club but he did mention MIM debts of over £300k. He also talked about the IP being worthless. 

Just in case you wish to be more confused, Made in Mind Ltd owns 100% of Made in Mind Mu Ltd, which is currently not listed at CH as in Administration - both founded by our friend Matthew.

If anyone can shine a light on how on earth Matthew can be actively raising funds using the MIM IP whilst MIM is in administration, then please do so. Maybe the administrators gave him a licence to do so? If so, why didnt he tell his own SH's when he wrote them a letter full of crocodile tears? 

Was he going to try and pay them back or pay off the £300k debts but keeping it a special secret perhaps?? 

Move 'em on, head 'em up, Head 'em up, move 'em on, Move 'em on, head 'em up, RAWHIDE
Cut 'em out, ride 'em in, Ride 'em in, cut 'em out, Cut 'em out, ride 'em in, RAWHIDE


Tuesday, 25 June 2019

Angelberry's sluggish death is all to familiar to Equity CF investors



Ryan Pasco and James Taylor applied to have their 2014 Crowdcube funded company quietly struck off in May 2018. Now in June 2019 is is still listed at CH as active with the Voluntary Strike Off suspended. Someone didnt like it. 


Angelberry stopped functioning as a company 2 years ago - we have written about them here 

So Crowdcube investors not only have a dead company but they cannot at the moment claim loss relief. We do not know why someone has stopped the striking off but a guess whom be that there is some dispute between the founders and shareholder/s or directors that has not been settled. It is crap way to run a business even after it has failed.

Are Crowdcube helping? Silly question.

This is just one of many examples and it is a very good reason for investors to join ECF.Buzz, where they know they will get up to date reliable information and if they bother to carry out the due diligence we have designed, they might just have avoided this crater. Site launching for real on 10th July 2019.

Our Buzz Rating for Angelberry has been under 20/100 since the start of 2017. 


Monday, 24 June 2019

Crowdcube's Mindflood DIYs its own Liquidation.



Mindflood or Patchworks, a tech company based out of NI, raised money on Crowdcube in 2015. Shareholders have heard nothing since 2016. Now in June 2019, they are told that the company is closing and they will receive some small change - donatable to charity.


According to Mr Heinz (no relation) the founder, investors would receive 5p per share on winding up against the share price of 73p. He doesnt apologise or even mention how inconvenient this might be.

In 2016, the company issued 139k C Prefs to Techstart NI and one other much smaller investor. These shares had a catch - in the event of liquidation the holders were first in the queue after creditors to be paid out. So ahead of the Crowd. To confirm this the company passed a new set of Articles - only voted on by A SHs. Most of the Crowdcube gang were Bs.

So as the paperwork states, the sale of the company's IP to an undisclosed buyer for £250k has enabled the £136k paid by Techstart to be repaid in full. Phew for them. Was there some personal guarantee?

What's left has been calculated by Mr Heinz to give the Crowd 5p per share. This is after he has allowed for £30k to be spent on the DIY liquidation. No mention as to who gets this is obvious.

One positive here is that there are no creditors left unpaid. And of course, as Heinz is keen to point out, Save the Children can benefit if you dont want the small change causing a hole in your pocket.

Another interesting point is that the DIY calculation includes not only the payment in full of the C prefs but they are also included in an extra £7k share of the final pot - despite the fact that the Articles state they are not entitled to a dividend. We think that might be wrong - not that it makes any real difference.

The company made steady losses until all the investment was gone. 

What a mess after 4 years. Just shows that it is worth knowing your way around share issues, share rights and Articles of Association if you dont want a surprise email pinging your inbox.

Sunday, 23 June 2019

Closing our Indiegogo Campaign ready for LIVE Launch of ECF.Buzz

Now that the live site is launching in July as planned, we are closing the hugely successful Indiegogo start up campaign. This will take a few days so you can still join via this route for now. 



In July you will be able to join our Crowd via the live site ECF.Buzz and you can become one of the many members who has access to our data and information on all things to do with Equity Crowdfunding. Together we can all help to turn what is currently a mess getting messier, into something worthwhile.

Saturday, 22 June 2019

Absolute Bedlam as brewer's numbers yet again prove Crowdcube projections are nonsense.


Bedlam Brewery makes great beer. They raised £515k in 2016 on Crowdcube. Now they are back looking for another £800k. Claims of success do not tally with our numbers. 


In 2016 Bedlam made various projections on revenues. Well lets just say that now we are in 2019, we can see very clearly that they have missed these by a long way. Readers here know this is a familiar story. 

Yet in their current pitch on Crowdcube there is no mention of this shortfall. They simply state that the CAGR is plus 41% over the last 3 years. As we keep on saying an increase of CAGR from a tiny base is of no use whatsoever. CAGR should be banned. In this instance the use of it to extrapolate the next 3 years growth is farcical. 

You may decide that the perks and beer are worth supporting and we wouldnt argue with that. But for goodness sake guys be a little more honest with your investors and drinkers. You have promised Bob Beamon and delivered Felicity Kendal. The reason for this latest round is pretty simple - you need cash as the sales are so far short of your plans that they haven't produced enough. 

At the very least investors should be asking why the company has delivered such small revenues on the back of a £500k plus investment? Are the next three years projections sensible and will cash run out again. There was no mention in 2016 of a new raise of another £800k 3 years later. 

Wednesday, 19 June 2019

Full Green - great vegetables sealed in a non recyclable long life plastic bag for the downright lazy.



Cauliflower is far more delicious than Eric the Greek's ear makes it look. Why then would you stuff it into an non recyclable plastic long life bag?


We have been following Cauli Rice, now Full Green, since the couple started on Crowdcube with their first business Righteous Salad Dressings. Righteous turned out to be a little disappointing and so they moved onto Cauliflower. 

They are now back on Crowdcube for what is probably a record breaking number of rounds for any of the same two directors. They simply need more money. 

The raise is going very well and they are consummate artists when it comes to the story and presentation. Hats off. The trick here is that they make it look like their process and end product produces the carb benefits. Actually that is all down to the simple cauliflower.

But with another hat on  - a tin one worn when looking into the real guts of a business, Im not convinced this is a good bet. Reviews of their products are and have been consistently very mixed. The bad ones are to be honest, not for pre watershed reading.

Full Green have also never managed to come in on budget - Righteous never did either. And like the switch from Righteous when that didnt work, FG are now launching a brand new product - cereal - which is in a brand new market. This is not being done on the back of a solidly built brand with break even points reached, with existing products. In fact rather the opposite. They never really cover off the reasons for the budget misses or for the continued losses.

I have little doubt it will fund but I am really struggling to see why. Stuffing freeze dried veg into long life plastic bags is from the 90's. Fresh Cauliflower is cheap and keeps very well. It takes 2 mins to make a fresh Riced Cauliflower dish and is much cheaper and I would say better for you. Why help increase the amount of plastic waste on our planet? We are desperate to do exactly the opposite.

Image result for plastic waste

So it has just been revealed - as nobody bothered to ask this Q before, that Full Green use Non RECYCLABLE plastic pouches for their processed cauliflower etc. They are very keen to tell everyone that they have sold 5m of these bits of plastic which will have gone into landfill, been sold to Malaysia where they are sitting in huge waste dumps polluting the surrounds. So why is this so? Well it turns out that the very process used to make their products demands non recyclable plastic. How many investors knew that? You are destroying the planet.

We estimate that if you put this plastic waste from Full Green end to end it would run from Landsend to north of Glasgow. What would that cost them and their shareholders to clean up?

Oh and finally the term Cauli Rice is now off the menu - or in the US at any rate. The Rice lobby, a powerful body in the States, were getting a little fed up with Rice This and Rice That. So new packaging and branding has been required - is that paid for as part of this round?

Good luck to all who sail in her. 




Beta Testing




If any Members of ECF.Buzz have not received their invitation to take part in the beta testing currently underway, then please do email me and we can get that invite sent out again. 


Thanks. My email is rob@ecfsolutions.co.uk

Friday, 14 June 2019

It's a Website

We are very happy to announce the birth of our new Website  - Beta ECF.Buzz


Beta was born today at 3 minutes passed 4pm, weighing in at 4mbs, after a week long labour. 

The Live Launch (Christening) of Beta will take place in early July and is eagerly anticipated by all of those who wish to see equity crowdfunding flourish instead of going down the tubes.


The ECF.Buzz Family. 

White Car Crash starting to reveal its secrets.



White Car has crashed - of that there is no doubt. Now in liquidation, not long ago it was raising £800k on Crowdcube with a very upbeat message from founder and CEO Mark Douglas Strachan. 


It was on Crowdcube twice in fact - the final time just a few months ago at the end of 2018 when it took another £200k off investors. The Statement of Affairs shows a deficit of over £2m. Not bad for such a short life. 

We are unearthing the real picture, thanks to shareholders. Large salaries seem to involved, which is always a no no in our book for start ups using others people's cash. 

More to come - if you are an ex shareholder then please do get in touch. This one should go to the FOS. 

Thursday, 13 June 2019

Where are Property Moose?

Image result for Dead moose

Any Crowdcube investors in DFI Financial Services Ta Property Moose have any clue where they have gone? 


Accounts are due out this month and will hopefully reveal some facts about odd filings at CH. No activity on Twitter for over 12 months and no website open to non members. We had heard they had been sold but little evidence of that. 

Very poor reviews here https://uk.trustpilot.com/review/propertymoose.co.uk suggest all is not well.

It appears that some or most of the proeprty/s have been moved to a newco run by the same guy - UK Diversified Property plc. No filings of any great interest yet.

Readers might like to look at this -  https://forums.moneysavingexpert.com/showthread.php?p=75036542

Hope you are ok out there guys. Mooooooooooosssssssssssssssssse.

UPDATE - Andrew Gardiner was good enough to explain what happened at Property Moose - see below - 


The company you refer to is DFI Financial Services Ltd. This was originally Crowd Fin Ltd and conducted the funding round on CrowdCube. We did this once in 2014 and not twice. 

We have subsequently conducted 5 further rounds of funding with VC and institutional investors. Part of that, was to create a revised group so the holding company is now DFI Group Ltd and the Crowdcube shareholders have shares in DFI Group through a share for share exchange. DFI Group holds 100% of the share capital of DFI Financial Services. This was done a number of years ago to remove the regulated business from our "topco" to reduce risk on shareholder exposure. Everyone was treated the same, contacted by email and letter and the shares were swapped 1 for 1 with clearance from HMRC. A large national law firm dealt with this for us.

The Property Moose model did not work after 5-years of trying and us raising c.£2-2.5m of funding to grow. We had many members but the structure of the single SPVs and the introduction of MIFID II and the risks that posed caused it to not be commercially viable. The movement in the property market and uncertainty around Brexit also didn't help.

We spotted this back in 2017 so spent the next period ensuring that we protected investor capital and gave them a solution that put them in the best position possible which was to suggest the set up of the fund that they would own. This was not a decision we could make, we made the suggestion and under our investment structure, property shareholders voted and a decision was made by at least a 75% majority. c.99.8% approve the transfer to UKDPP. UKDPP is a registered fund with the FCA and is 100% owned by the shareholders with its own team and cash-flow. It has diversification over 109 properties and means that there is no "platform risk" as with crowdfunding as it is completely stand-a-lone and a plc. 

That meant the end of our BTL business but it was by far the best thing to do in the interests of our members which is our primary concern in respect of the platform. Although a negative for DFI, the suggested approach meant that DFI no longer continued to chase a model that did not commercially work and could have put us in financial difficulty if changes weren't made. As well as being in the best interests of our members, it is also the best option for our shareholders. This allows us to pause, retain the capital we have left and then look at the best ways to maximise shareholder value. 

The current PM investments that remain are being exited as the terms come to an end/projects complete. At that stage, we will be looking at the platform and re-launching it or assessing the best option for shareholder value then. You mention we have no website, that is not correct but you are not a member so you can't log in. It is just closed to new people and only their for existing members to monitor their investments. 

The aim since identifying the issues with the model was to slash costs, protect members and put us in the best position to then look at re-launching on an updated basis with something that works. Since then, we have cut our cost base by 10x and are in a very strong position financially to meet our strategic aims. 

We update our shareholders as best we can when events occur and I am expecting to send our next update out over the summer. These are sent via email. 

I have looked at your blog and note your comments that we did not give people much time to vote on the transfer to UKDPP. This is incorrect and I would appreciate it if you corrected the false statement. The first email with the vote was sent in July 2018. The final decision as to which option people voted for was then open until the valuations were conducted which gave until 1 January 2019 for batch 1, 1 March 2019 for batch 2 and 1 May 2019. As you can see, we gave 6, 8 and 10 months for people to consider and make a decisions so I do not think it's fair for you to make your statement that we did not give enough time. 

In summary, we continue to focus our efforts on securing shareholder value. We have a family office, a EU funded VC and a regulated wealth management group as institutional investors as well as management and the Crowd Cube shareholders. A lot has gone on since 2014 in the market and in the macro-climate. Who could have foreseen the changes in government BTL tax laws or Brexit and the continued uncertainty that brings and the impact on VC funding. Unfortunately, the SPV business model did not work but rather than risking investor capital by introducing platform risk or risking shareholder investments by running a model that didn't work, we took, what I believe, is the mature and sensible approach to take positive action, make changes and live to fight another day.

Wednesday, 12 June 2019

Full Clear becomes invisible and tells investors it's time to close down.



Nothing very Full or Clear here. 377 Crowdcube investors gave this company £248k in January 2018. Now just 16 months later the Directors (we use the term loosely) are closing via a VCL. 


Full Clear had a solution to cleaning beer pipes. Well it clearly wasn't very good or cleaning them the old way was fine. There has been little or no communication between Full Clear and its Crowdcube shareholders. In January 2018, Crowdcube were happy to allow this pitch onto its site with a pre money value of £1.7m. So where has that value gone? 

Crowdcube are the nominee here, according to CH. Mind you it also states that Crowdcube are the nominee in the fiasco that is Ethos Global Ltd but Crowdcube have denied this in writing. So who knows. Not Crowdcube for sure.

As you might expect ECF.Buzz had them heavily marked down recently as their FB page has nothing since Nov 18 and Twitter is off line. 


Tuesday, 11 June 2019

Not time to hoist the mainsail just yet. Discovery Yacht Group disappoints.



DYG raised £2.21m on Crowdcube in January 2018. Recently filed accounts for year ending August 18 show a loss of £700k. This is against a substantial projected profit for the year as shown in the Crowdcube pitch. 


Too early to be calling for the lifeboats but from these accounts trading looks a little thin - trade debtors of only £1,664, when the accounts take in the main part of the peak summer trade. They have raised more money since so there is no chance of drying out.

Projected profits for the year now closing are huge.

There are large sums being exchanged intra group and between directors which always makes me nervous. But plenty of time to trim the sails and make everything ship shape. Shareholders' views welcome. 

Bring on the Clowns.



This is another fine mess. Celo raised £148k on Crowdcube in July 2018 - company name Artis FS Ltd. The filing at CH confirms the transaction in shares. But the accounts for YE August 2018 state the company is dormant with just £100 on balance. No notes. 


One of the two founders has left his post and the latest shareholder list (with updates) dated August 18 has no mention of anyone other than the two founders. 

The 'website' has a button to take you to early access which is a dead end. Its 'Careers' button takes you 3 FT tech job vacancies in Chennai India and 'Investors' takes you to confirmation of the Crowdcube raise. That's it. Celo is also a totally separate company offering services to medical professionals and another separate US based financial services app.

A helpful article dates April 18 https://www.businesscloud.co.uk/news/insurtech-start-up-crowdfunding-to-disrupt-the-industry in which the founders are described in the first line as Tech Entrepreneurs, says that the full open beta will be available by August 2018. No sign of it in June 2019. 

So now we have cleared that up for, lets get on with the real slap stick. Oh no we wont!

Friday, 7 June 2019

Eprop investors are the latest Crowd to lose out.



Easy Property raised £1.36m from 376 investors on Crowdcube in 2014. The company, also known as Eprop, was valued then at £60m. 


After going nowhere, they did a deal with another group also going nowhere. The result has been a forced sale to Tosca Aquisition, who have paid a pittance at £17.85m. Crowdcube investors have lost out again. Although technically this business has been sold rather than dissolved so we are sure it will get their approval. After EIS and loss relief some investors might even break even.......doesnt that tell you something about how stupid we are being.

I would say that punting out Eprop at £60m in £2014 could be classified as highly misleading. Clearly today's value would confirm that. So FCA, what would you say?

Look guys you are really making this far too easy for us. We yet again predicted this mess here . Our members will be able to benefit from our knowledge and your investors will no longer put up this sort of thing. Let me know when you come to your senses and want some advice.

Spending £48 a year on ECF.Buzz, to avoid losing many hundreds, is looking increasingly like plain common sense.  

A Wee Cracker from Seedrs




Below is an email sent to the recent Seedrs investors in SkinnyBrands. It speaks for itself. We think that this sort of thing needs to stop. We hope ECF.Buzz will help this. 


As explanation, SkinnyBrands raised over £400k on Seedrs in February 19. Valuation pre money of £10m. Three months later they have sold 37.5% of the company at a pre money valuation of less than £900k. It is almost impossible to know this and read the email below without falling off a chair. Try it. 

Dear SkinnyBrands investors

Following an update from the company we wanted to provide you with more details on SkinnyBrands’ most recent investment round and how this has led to changes to the shares reflected in your portfolio account.

As communicated by Tom, the company has received further investment from Mosaic private equity group. The investment was for 37.5% of the company and the share price, as indicated in your portfolio, was £0.72. This gives an overall post-money valuation for the company of £1,422,236.88.
The reduction in the valuation has primarily been driven by the requirement of the incoming investors to receive 37.5% of the company. The company felt that it needed to accept such terms due to the ongoing cash requirements of the business.

Because this round came so soon after closing the prior round, Seedrs agreed with the company and the incoming investors that the round would be structured so that Seedrs investors would not be diluted.

As a result the Seedrs Nominee was awarded a bonus issue of shares to be held pro-rata on behalf of the Seedrs investors. This has been reflected in your investment account, and the number of shares attributed to you has been increased by 42.87595%.

We would like to emphasise here that Seedrs have worked closely with the company and the incoming investors to ensure that the rights attaching to the Seedrs investors’ shares have been preserved throughout this process, as well as the ownership position of those who invested via Seedrs.

Therefore the overall effect for those who invested in SkinnyBrand’s previous round via Seedrs will be as follows:

a. your overall ownership in the company remains the same (i.e. it has not been diluted); and
b. the price of each share held by you has been reduced from £8.11 to £0.72, to reflect the share price used in the most recent round.


The company is willing to answer any further questions that you may have in relation to this update.

Kind regards
The Seedrs Team

Our London Adventure

It's a jungle out there.


A Huge Thank You to all who came to have a chat about the new ECF.Buzz platform launching next month. I am massively enthused by the overall reaction. So lets get it out there and help investors take back control. 



We had an excellent series of meetings and one thing that was confirmed for me, beyond any doubt, is the need for our new service. Investors have for the last 8 years of Equity Crowdfunding, been of second or no interest to the main retail platforms. Lack of information, misleading information, occasional dodgy information have all become commonplace. Caveat Emptor, like Free Speech, only works if everyone involved takes some responsibility. 

Onwards!


Saturday, 1 June 2019

Zing Zing CVA is passed by Creditors so Crowdcube investors are stuck.


Yet again Crowdcube investors are treated like door mats. Zing Zing raised £1.5m in 2016 and then another £1.2m in 2017. Now Creditors have agreed a 4 year CVA which leaves the Crowd holding onto worthless paper. Paper that Crowdcube promoted as being worth £7.2m in 2017. 


We wrote about this when the news broke - here . Predictably profits forecast on Crowdcube never materialised. The CVA documents go into a variety of reasons for this. We add them all up and make it one reason - piss poor management and planning. 

As investors are not considered to be creditors, they have no leg to stand on in these cases. Creditors are being told they will get all of the £523k debts back. No one gave a monkey's about the Crowd. Least of all Crowdcube, who have their commission. The administration for the CVA will cost £100k. Yup.

So get savvy about your investment and join our crowd at ECF.Buzz, where you can learn from other investors and experts.

Lakes Distillery not in the right spirit with new Down Round.



The Lakes Distillery plc raised £1.6m 12 months ago on Crowdcube. It had already raised £1.5m the year before. Valued last year at £44.38m pre money. Just this month they have privately raised a further £1.6m on a valuation of just £36m. So what's happened to those plans?

If you Google The Lakes Distillery, you find a barrage of hits for their listing at the end of 2017 with M&S. This occurred just before the Crowdcube raise; which was a fantastic success. We searched M&S today for their product but drew a blank.

Companies try not to have down rounds for obvious reasons but this one is significant. Accounts for the company are due out this month so it will be interesting to see how they relate to the ones used to entice investment last year.

Here's hoping it is good news. Thanks for the heads up go to anon.


Tuesday, 28 May 2019

Filmore and Union is the latest Crowdcube success to join the scrap heap.



On, on, on we go, as if everything is fine. But it is not. As yet another Crowdcube success, the cafe chain, Filmore and Union, goes into administration. It used Crowdcube to take £860k off punters with promises of profits in 17/18 of just under £1m. Dream on.

Why cant we at least see how wrong this is and do something to change the outcome? Of course you will get the usual glib response you always do from the management at Crowdcube. They took their commission on £860k years ago.

Filmore had a much larger investor than Crowdcube. BGF (no not something out of a Dahl story but the Business Growth Fund) put in £3.5m in September 2017. That was a good call guys.

We warned about this outcome in January 19 - here 

The administrators have, according to a piece in the Beeb, managed to sell off the production kitchen and ten stores. That will not provide any crumbs for investors.

Onwards.......................... or maybe not. We had this sent to us today 28 May - disgraceful......

From the staff at Filmore & Union, Skipton. We regret to inform you that this site is now closed. All members of the team have been made redundant, with no notice period or payment and have been treated unfairly by those in higher management, leaving the government to pay us for their mistakes. We are all due six weeks of pay including holidays (AND the compensation pay - that we will not receive). Please boycott other Filmore & Union sites from now on, all they care about is their money.

Thursday, 23 May 2019

Redchurch - Red Faces. Debts to HMRC of almost £950k.



Redchurch Brewery's collapse is being blamed by management on the departure of their Head of Sales. The fact that they owed HMRC £950k and were under threat of imminent action might also have something to do with it.


Looks like these guys couldnt organise a piss up in a cardboard box.

The Administrator's report is rightfully damning. Redchurch took almost £900k off around 700 Crowdcube investors in two rounds. And they couldn't even replace the Head of Sales or pay the tax that was due.

The big departure, which led to a 'significant downturn' in revenue according to the report, took place in 2017 - the same year of Redchurh's second round on Crowdcube. The timings would be interesting as this wasn't mentioned at the time. You also have to wonder if this is how business really works. Sales are generated in advance and once pull through starts, they carry on. The HofS' job is then to gain new business. So a significant fall in existing revenues should not be caused by his departure - not in the short term.

We have evidence that shows that the Head of Sales in their 2017 pitch had only joined the company in 2016. So how is it possible that someone who has been at the company for around 12 months can have such an enormous impact on departure?

We also have evidence from this second round that the pitch changed its rewards upwards to increase investments. Bet you guys who bought into this - in fact some of you requested it - are now regretting the move.

The Director owed the company £21k in an outstanding loan and the debtors contained £35k of write offs. Some creditors will claw back something and the Insolvency guys are happy, as the company was sold in a pre pack for £220k to a newco - Redchurch London Ltd. Investors lost the lot including their perks.

So here we have the crazy situation where HMRC are giving invetsors 30% tax breaks on investing in a company which 20 months later has wracked up unpaid tax debts of almost £1m - which are now largely written off. And investors were only investing for free beer and the 30%. Building UKSMEs my arse.

Next round's on you.