A breakthrough - Crowdcube funded Beara Beara makes a profit.

Credit where credit is due. Whilst the £100k profit reported in the accounts for YE Sept17 is not quite the £1m they projected on their Crowdcube pitch, it is nonetheless a profit rather than the usual loss. 

So is it possible to take a company that makes £100k profit and scale it so that Crowdcube investors, who bought in at almost £1.4m back in 2015, see a decent return for their efforts. Maybe?

At least these guys are now heading in the right direction. Clearly a shop in Shanghai has been a smart move. It maybe sometime before we are raising a glass to their success but here's hoping. 

Beara Beara complete U turn and extend their Crowdcube pitch

Beara Beara is on Crowdcube raising more money. Things have not gone quite to plan since the first raise - do they ever. But you wouldnt know that to listen to the founders.

In this raise, there has been a very poor reception. Unlike most CC pitches, investors have commented on the over valuation and the failure to meet projections. Stalwart in their own defence the founders have hunkered down and sat it out until the time ran out....well almost.

Just 5 days ago the CEO was asked if, as a result of the poor response, he would at last reconsider his valuation before time ran out? He responded with a blast from his six shooter, that really this wouldnt be fair on existing shareholders - you know undervaluing their investment! As this is a CC pitch, its fair to assume that this nonsense is advice CC agree with, even if they didnt supply it. 

So just 4 days later, The CEO makes an announcement on CC that they are extending their pitch for another 14 days - apparently he has been so busy overseas creating new leads, that he hasnt had any time to spare for the campaign. Well you know that's total BS and if it isnt the guy shouldnt be running a company. Hidden at the bottom of this update is the reduction in the valuation. Like it's some sort of bad idea that he's trying to hide. 

Firstly the business has always been overvalued. It still is, even with the reduction. Trying to hoodwink investors by telling them something and then reversing that very decision 4 days later shows a total lack of respect. It also shows a massive chasm in any business acumen. Trust is important and you cant have any here.

The leather might be good and the help the business provides for poor Bolivians is admirable but the business management is lame. Why are CC not providing this guy with some sound advice that would allow him the best chance of making something of his endeavours. In our opinion you would be mad to invest in this, even at this new value, simply because the founders have no clue what they are doing.

A final note - one problem this underlines, is that if your first pitch on a platform like CC is over valued, then you will struggle further down the line with any new pitches  - unless you can admit to a downround or you have exceeded expectations. Neither of these options appear on the CC platform. Valuations are agreed with the interns at CC - which rather illustrates our well made point, that if the management of Beara Beara is lame, the management of Crowdcube are donkeys. No offence to donkeys.

Beara Beara are back on Crowdcube.

Beara Beara raised £200k on Crowdcube in 2014. Since then they gone on to miss all of their targets - so standard fayre.  So lets start looking at this new raise with a blank page. 

Actually lets not do that - that's what they want. The original raise barely gets a mention in this new one and the old targets are not there for comparison. We can help you out with that  - see below.

We wrote about them before as their historic accounts in the pitch did not match the ones at CH. Here

CC pitch 1 revenues for 2016 were predicted to be £1,005,000. Actual revenues were £740k.

CC pitch 1 profits for 2016 were predicted to be £348k. Actual profits were £31k.

Promises that 2017 revenues are doing well and heading for £1.2m are only slightly dampened by the fact that the previous projections had them at over £2m with profits of over £1m.

Wouldnt it have been more honest just to give us these figures? Why hide them?

Also they had another £300k raise to go in 2016 which hasnt materialised - why?

They have chosen for whatever reason to file micro accounts - 2015 was a full BS filing. 

The current valuation has more than doubled to £3.4m and of course you will have forgotten that in raise one, they had to drop the value considerably to get over the line.

Nothing wrong with the product per se. 

You would have thought that on the back such very poor results recently, Crowdcube would have addressed these crucial issues - openness and honesty. Well it appears not.  

Crowdcube figures are not accurate

Here is yet another example of the information supplied by Crowdcube being inaccurate.

Beara Beara raised £203k at the beginning of 2015.

In the historic accounts given by Crowdcube for YE September 2014, they claimed that the balance sheet had retained earnings of £83,023. This was generated by a year's profit of over £73k plus the previous years profit. 

Since they raised their money, they have filed the actual accounts for this period with CH. This shows a retained earnings figure of only £34,614 - so well under half the claimed figure. So one assumes the profit figure was also wrong. Small company accounts don't allow confirmation but its seems unlikely that a small business just funded would pay out dividends??

The overall state of the balance sheet was around half what they had declared it to be only months earlier.

This is no criticism of the business per se but it does call into question Crowdcube's ability to get the right information to potential investors. They say they are trying but the evidence does not show this.

 

Yet another Crowdcube pitch has incorrect historic accounts

This appeared today in Crowdfunf Insider, which is rapidly becoming Crowdcube's number one apologist.

http://www.crowdfundinsider.com/2016/02/81621-founder-of-beara-beara-discusses-growth-expansion-following-crowdcube-success/

Beara Beara published actual (historic) accounts data for 2014 in their Crowdcube pitch which raised over £200k in 2015.

The 2014 accounts in the pitch, clearly marked as 'actual', showed a profit of over £70k.

The real accounts, lodged with CH well after the Crowdcube pitch had successfully closed, showed profits of only £25k. The balance sheet was depleted by the same difference.

Why is not possible for the Crowdcube DD department to get something right? What level of moron are they employing? How many times have we said this?

The ECF industry needs these errors and quite frankly openly corrupt dealings to cease, before it is too late.