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. 


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. 

Wednesday, 22 May 2019

Equity Crowdfunding is embarrassed by Loot administration

Image result for embarrassed

Seedrs and Loot were both promoting their up and coming funding campaign - Seedrs were already taking early interest. Then Loot spoiled the party by going into administration. Whoops. 

We have already seen quite a few instances of equity crowdfunding campaigns completing and then the company taking in the cash closing within 12 months. Some of these have looked like the company hadnt revealed the full degree of their financial distress - resulting in the crowd being taken for a ride. 

With Loot, Seedrs have claimed that the early registration was just that - it didnt mean that the company was about to launch a campaign, as Seedrs had not, apparently, signed off the due diligence. That will be an enormous comfort to Seedrs investors who might have thought they were promoting a company in financial meltdown. 

It seems Loot didnt know this, as they declared on their home page 'WE ARE CROWDFUNDING'.

It also seems that the Seedrs PR department had not been informed as Im told the London Tube thank you anon) is full of Seedrs adverts pressing home the Loot funding opportunity. Oh dear, looks like someone has been telling massive porky pies. 

Whichever way it happened, the outcome is farcical.

It is our understanding that the deal with RBS fell through - this is the deal that the likes of https://www.crowdfundinsider.com/2019/01/143021-digital-banking-startup-loot-secures-new-investment-from-rbs/ told everyone was completed. Seems RBS have more than one way of wrecking start ups.  

It's a jungle out there and you would be well advised to sign up to our new site which goes live in July - ECF.Buzz which will give you the tools to avoid many mishaps and also a chance to discuss successes and failures with other investors - free of the platforms' interference. 

Thursday, 16 May 2019

The saga that was Giftgaming enters its final stages - Seedrs investors should be unhappy.

Image result for sweeping under the carpet

Useful things brooms. Giftgaming has chosen a VML for its demise, or as the Liquidators have described it, a 'solvent liquidation'. Hmmm......

We have written far too often about Giftgaming. Nick Hatter the CEO has been at the centre of  this collapse. 

Now he has signed a declaration of solvency which shows no regard to Seedrs investors whatsoever. 'Creditors' under our current system does not include shareholders. Given that they are clearly creditors with the rise of equity CF, much the same as banks with O/S loans are, the law needs changing.

Seedrs have admitted to their customers, the investors, that there is no hope of them getting any money back. They claim to have made efforts to get some action from the Insolvency Service but the Service said NO. So now they say they just want this closed asap. 

Meanwhile out on the street, Seedrs investors are left High and Dry. OK, so its not a large sum but Seedrs promoted this company twice to its clients. How hard they tried to resolve this for their investors is an open to question - they certainly do not want to prolong what has been an awkward mess.

But that is where the broom comes in. 

Tuesday, 14 May 2019

Threefold rise in complaints to the Financial Ombudsman Services for Equity Crowdfunding.

 Image result for paper backlog

As we predicted, the 3-5 year time lag for equity crowdfunded business to spend their investment and close down, is now rapidly pushing up the number of complaints to the FOS. Numbers are still small as are the failures but the backlog of zombies waiting in the wings is huge. Like a Fruitbat Rave. 

It is sort of obvious but people have been pretending it isn't. If you fund rubbish businesses run by mediocre business people, with crazy financials, they will not last. Now in 2018/19 we are starting to see the consequences. Our new platform ECF.Buzz, when it launches in July, will have a database of over 1200 funded businesses. You would be amazed at the number of these that are zombies or going nowhere - but that have not closed. Amazed  - not in a good way. Complaints to the FOS only ever come after a business has officially failed. 

So the 3 fold rise from FY 2017/18 to 2018/19 from 26 to 78, is hardly a surprise to us. We'd be pretty certain that this 78 is made up from Ethos Global, Sugru, Emoov, Recruitive Software, Fantoo, Stamplay and Gartenzwerg . We are now helping investors make these complaints and the FOS do not make it easy. Like Parkour, it isnt something you would try more than once, unless you live in Gaza. It actually makes you want to cry. 

We would not be surprised to see this number go up by ten times or more for 2018/19. Pigs are pigs, even dressed up at the bar. At some stage one of them will fart and give the game away. 

Another Crowdcube brewer runs out of hops

Image result for closed brewery

Following on the mess at Hopstuff, The RedChurch Brewery Ltd has gone into administration taking all its investors with it. This is not a place they wanted to go. It certainly will not deliver the perks that over 700 investors were looking forward to.

Redchurch, a London based craft brewer, used Crowdcube twice, in 2016 and then 2017. A total of just under £900k was invested by the Crowdcube faithful. Accounts were due next month.

The numbers are not out yet  - The Gazette posting was only a few days ago. Nothing filed at CH. Maybe this will be a prepack. Investors will still lose out. 

Lessons learnt - none. 

Members of ECF.Buzz will be pleased to know that we had them (Redchurch not our members) marked as hospitalised following last year's accounts, which showed a loss of £290k against a Crowdcube projected profit of £412k. You see these things do actually matter. 

Tuesday, 7 May 2019

Love making up projections as Crowdcube's Lovespace yet again disappoints

Image result for space

Space  - the final frontier. Etc etc. Love it or loathe it, it helps if the facts can be the facts. Lovespace's Crowdcube projections are now on their second iteration and they are still way off, somewhere in a Galaxy far far away. 

If they could hear shareholders screaming in space, it would go something like - FFS why cant you just be honest with us. Ok so it takes longer to grow a new business - who knew that? But why set out completely unobtainable goals, spend the cash to get there and then turnaround when it is obvious you are way off line and ask for more money. 

So here are the facts. Lovespace have used Crowdcube twice. Total raised of around £2.35m - so a large enough number to care about. In their first raise in 2014 they predicted net profits for 2017 of over £7m. Ok so they were young and ambitious. Needless to say they didnt get close. 

Short on cash they came back in 2016 - no one seems to have asked about the 14 numbers except us - here. In these projections, the accounts they just filed for YE Dec18, showed a handsome net profit of over £3m. When you read the accounts you will be surprised, like we were, to see that the real number is a loss just shy of £1m. In fact despite projections, this is their best result to date. Losses are now £7.5m.

The company has raised another ~£534k this year so far. It was at a lower share price than in 2017 which is never a good sign. 

Our new Buzz Rating - available to members of ECF.Buzz, has given Lovespace a 9 point drop since last year. 

I dont think you would get this situation in any other financing channel - without something being done about it. Isn't it time we did something?

How Crowdcube customers feel about Crowdcube

Crowdcube's new app claims to be a crowdfunding tool for entrepreneurs. Everyone knows that when the engine is smashed to pieces, installing a new satnav will not help your car get you where you are trying to go. It needs a rebuild.

On the App Store there are reviews - we think this one pretty well sums up what most shareholders think about Crowdcube - 


Disappointed with lack of support

In 2014, I invested £5000 in a startup retailer selling goods from British craftespeople. I am disappointed at the lack of information and support I receive from both parties - the business and the funding platform . Whilst I know crowdfunding is risky and in hindsight, there are better ways of investing £5k, my shares have been diluted and requests for more information have been met with ‘ our accountants cannot deal with individual requests from shareholders ‘ Contact with other shareholders is non existent and I have been asked to vote on share issues and when I asked questions , I was met with ‘ no
Need , we reached our target ‘ where is the evidence ???? This lack of transparency is disconcerting . Similar experiences anyone ? Felt supported ? Kept informed ?

We think we have the answer. ECF.Buzz will hand the power or at least some if it back to investors. We know exactly which company Mr Brightonbee is talking about - they are on our database. Our Buzz Rating for them is 35/100 down from 40/100. All indicators are facing the wrong way. Accounts due out this September and the note above will knock them down further. 

Mr Brightonbee's story is one we come across weekly. 

So why not join us - we are the sum of all of our members experiences. Together we can hold the platforms up to the light and ensure that they improve their due diligence and as a consequence , their offers. It is common sense. 

Saturday, 4 May 2019

The Lies We Tell. Seedrs caught promoting a successful raise in 2016 that never happened.

We came across this, by accident, when building our DB. It is the shocking revelation that Seedrs are happy to tell people that a company using their platform in January 2016, successfully raised £186k. In fact no money was finally raised and no shares were issued. That was 3 years ago - so why has this information on an FCA regulated site, not been corrected?

The company in question is a bar operator and beer producer in Brighton - now going great guns and they were extremely helpful in supplying the correct information. We hope that they go on to make something very special down there. 

Back to the culprits. Seedrs have a duty of care under their FCA licence 'not to present misleading information'. So do we think that completely bogus funding claims are misleading? Well, we do. Should it be up to us to tell them this? No. Why cant they just be honest or are they incompetent? Well you can make up your own minds on that one. 

There is a very good and very sensible reason why this 'successfully funded' pitch never funded. The plan had involved the Landlord of the building that The Bison Arms was to be created in. In the end he and they did not see eye to eye and the so they never called on the funds or issued shares, even though the pitch had reached almost 200% of its initial target. Or so they tell us and we have no reason to look for any other explanation. There are no records we can find of any shares being issued to this value. 

So Seedrs how many of your claimed 'fully funded' records are bogus? 

Friday, 3 May 2019

Zing Zing Express orders up a CVA and Pivot to save the day. Was this on the menu?

Bizarrely and much to the irritation of some Crowdcube investors, Zing Zing have applied through Begbies for a CVA at the same time that they were trying to raise more money privately from their shareholders. We are not sure if the one knew about the other. One thing thing is clear - no Crowcube investors have a vote in the future of their company. Crazy stuff they are putting in these takeaways. 

Zing Zing is one of Crowdcube's larger and more recent successes. For those of you who can stomach Crowdcube's endless PR, this is their appraisal of how successful they are -  https://www.crowdcube.com/explore/investor/zing-zing-where-are-they-now

Zing Zing raised just over £1.5m in 2016. Everything appears to have been downhill since. They were projected to be in profit from 2017 onwards. Obviously that has not happened. Losses for YE Dec17 were £750,000. We have them marked way down on our Buzz rating.

We wrote about at the end of 2017 when they tried again on Crowdcube - worth a read of the comment from a serious investor. http://fantasyequitycrowdfunding.blogspot.com/2017/12/zing-zang-baby.html

Whether they manage to get support for the CVA will be one to watch. Vote on 22 May.

One fact we are sure of now - Crowdcube are consistent in their ability to lose investors their cash. Why? Well simply because they dont care what rubbish they publish on their FCA platform. Nor apparently does the FCA. We do. Join us to make a stand for investors at ECF.Buzz. Equity Crowdfunding can be so much better than this.

Wednesday, 1 May 2019

Pod Point is a great illustration why Equity Crowdfunding platforms shouldn't bother with financials

Image result for electricity

Pod Point are well placed to take advantage of the increasing sales in electric cars. Or so they tell us. That is great, as their projections on Crowdcube stink.

The have used Crowdcube 3 times and Seedrs twice. Total raised to date via equity CF is ~£9m. 

So why cant they get their projections in the right ballpark? Out of the 3 attempts on Crowdcube not one of them is in the same galaxy and the originals are in a different universe. It just makes a mockery of the whole system. 

YE June18 shows revenues of £11m and GP of just £2.1m. It costs over £7m to achieve this. Deep pockets dont seem to be an issue so it is just a question of time and electric car demand. If for some reason that doesnt show the exponential numbers predicted - for example we find a better way - then that is that. Lots a power points with no users. 

2019 will see more cash required at a substantial level if these numbers are anything to go on. 

We look forward to the future. 

Tuesday, 30 April 2019

Fund on Crowdcube wait six months and then close with massive debts. Walk Away. A Classic from Country Matters

This one is hard to believe. Only months ago, the Directors of Country Matters were on Crowdcube telling everyone what a great investment this was. In January 2019 they went into administration with over £600k of unpaid bills and loans. Crowdcube shareholders are not even mentioned in the Statement of Affairs. 119 of them invested £130,000 in May 2018.

Crowdcube is an FCA regulated platform - just in case you wondered how this sort of thing is allowed.

As the Founders state, Country Matters dealt in Classics. Well this has to go down as one of those.

They have taken HSBC for £250k and Lendingcrowd for another £123,000.

According to the filed report, the company lost a significant customer in 2017 - roughly 25% of their turnover, as Countywide Farmers plc went into Administration.

Now we are just guessing but I'll bet my hat that this wasnt revealed to Crowdcube investors in May of 2018 on the FCA regulated platform. Is it reasonable to assume that at least some of them might have had second thoughts about investing if they had had this information? Given that 25% of the company's revenue had sailed into the sunset. And given that now it is the main reason the Directors are reporting for the business' failure.

It reminds me of a car purchase a friend had some years back. The vendor told him that the engine was new. He bought the car. The engine packed in. He took it back. 'Ooooh said the vendor  - the engine was new - it was new to the car'.

It is odd that in the whole of their report, which goes into some detail on the business in 2017 and 2018, there is no mention at all of the Crowdcube funding round. This is shown at CH as being completed in May of 2018. By November 2018 we are told that the company had some serious cash issues and was heavily overdrawn. So simple Q - where is the bleeding money mate?

As in other cases we are highlighting at the moment, it is almost as if the Administrators  - Begbies Traynor, Birmingham, have ignored this important cash inflow. But that would be negligence so it is unlikely.

Let's hope they had some fun along the way and that someone somewhere will make them pay for it. Many small creditors listed. An absolute shocker.

Monday, 29 April 2019

Chupachipcake hits the skids and all investors are wiped out again. Three cheers for Crowdcube.

You begin to wonder how all of this is going to end. Chupamobile took £740k off 147 Crowdcube investors in 2014. By 2016 it was projecting £1.3m net profits. Nice. 

We had this one banged to rights - our current Buzz Rating on Chupamobile was 15/100 down from 20. Anything under 20 is a goner without Jesus.

We wait to see what collateral damage there is and what state the business has wound up in. I doubt it will be pretty. Tax relief is available as usual. So now Crowdcube have helped waste over £50m since they started in 2011. Knighthoods all round boys. Blasting.

Sunday, 28 April 2019

The end is Righteous as founders hand over Dressing of Salads to others.

Righteous raised £215k in two rounds via Crowdcube. Despite several senior level listings, the salad dressers never did manage to make their projections a reality. Then they had an idea - why not create another company making plastic packaged, long life, boil in the bag cauliflower rice and offer shares to existing backers. And so Full Green aka Cauli Rice, was born.

We only tell you this because Righteous has now been given to others. According to the founders there was no financial transaction. 

Whilst gifting shareholders in Righteous free shares in FullGreen, is an honourable gesture, it only really works if FG makes it. Now with over £4m invested, it has a US factory, WW sales and is still losing money. We asked for news but were politely told to bugger off. They dont like us. Troll is a word they use for us. 

Reviews for the plastic sachets of pre made, long life caulirice and a few other recipes, are mixed - that's us being kind. But what do we know about start ups? That's what they told us; as well as to bugger off. 

Time will tell. 

Shareholders we talk to are not impressed by the PR which continues to talk everything up and the facts which continue to show missed projections. 

And do we really need a plastic sachet to create cauliflower rice. Using a fresh cauliflower bought and stored for a week in the fridge, you can make many individual helpings of delicious and nutritional caulirice in a around 1 minute per portion. Have we gone so crazy that we need it in a PLASTIC packet? That is very sad, if true.   

Friday, 26 April 2019

Kokoon - what is the real story here?

Kokoon are currently well on their way to raising more money on Seedrs, they have already used Crowdcube and more importantly Kickstarter. The constant stream of complaints on the KS pitch suggests that things are not quite as the CEO has told investors on Seedrs. 

We all know that complaints on a platform like KS can be exaggerated - people with an axe to grind, people who just like complaining etc etc. However, there will be over 4,700 comments on their still unfulfilled KS campaign page as of this weekend. 99% are not complimentary. 

Customers have been misled is the common theme. Stock that has arrived is on the whole disappointing, refunds are slow or not processed, delivery dates are a joke only surpassed by their communications, mechandise breaks and arrives broken. And the final straw is that the sold software to give users sleep feedback and imporatantly give them help in sleeping, is simply not available yet. 

We have held off writing more on this as they appeared to making some positive progress. But really enough is enough when the CEO states on Seedrs that most of the KS customers have been satisfied and the failure rate is under 3%. You wonder if he has read the comments. They are getting rapidly worse. 

Here are a few examples - from just the past few days

I am again requesting a full refund of my money. I haven’t heard from you. Please respond.
  • Yes it is all very disappointing and discouraging to hear about the issues people are having with this Best of all possible worlds, sleep aid headphone.
    It appears to be anything but. Broken parts, Poor sound, non functioning features, and the rest make one feel the wait was not worth it.
    Now 3 years since the original shipping estimate and I, like many of you, are still waiting for delivery.
    I had many chances to get a refund, but decided to wait it out.
    Now, I am not so sure.
Never received any communication about shipping. I confirmed my address in January 2018. I would like a refund as well.

Was so excited to see the headphones had arrived. Lifted them out of the impressive carry case inside the box and ... snap ... plastic bit around the metal post snapped off. Jesus H Christ. Didn't even get to put them on and they are broken. What now?


In my experience I have never seen such a shambles pretending to be a business.  

Now we read that Kokoon have stopped issuing refunds - the excuse being that the factory has committed to making the remaining KS stock - which we should point out has not been delivered and there is no date given for its delivery. This is shoddy customer management. It is shoddy everything. In fact is it legal? i was under the impression that a UK product manufacturer selling on line had to offer a 14 day no quibble money back guarantee after they have delivered the goods. Well Kokoon have not even delivered and they are refusing to give backers refunds - 3-4 years after taking their money.