More Alternative facts for Equity Crowdfunding

Borrow My Doggy was reported as having raised £1.5m at the end of 2015. Many of the usual publications picked up the story and issued it as fact. It wasnt.

Reports range from City AM, The Sun, Yahoo Finance and numerous online ECf publications and this release which suggests very strongly that the money was 'raised' - http://www.prnewswire.co.uk/news-releases/uks-first-live-crowdfunding-summit---crowdfinders-live---today-announces-19m-funding-goal-reached-after-four-hours-of-sme-pitches-534962631.html

We were contacted by a shareholder in BMD recently to see if we could find out what happened. The £1.5m was reported as raised by IW Capital through one of their live events - 'Crowdfinders - Make your Business Rock!' - ahem. So successful was this raise that BMD cancelled a scheduled Crowdcube raise. This shareholder told us that several investors were puzzled by the outcome. The news reports were very clear - yes the full £1.5m had been raised at the event.

The Crowdfinders website carries the Yahoo piece and the City AM piece links but they have been disabled. The City AM headline as shown on the Crowdfinders site states -  

''BorrowMyDoggy fetched £1.5 million at Crowdfinders Live. City A.M.''. We would read fetched as raised?

So we spoke to IW's main honcho Luke Davis - a man closely associated with our favourite lady, Ms Horlick. He started by saying that he couldnt understand what all the fuss was about and was this a story being put about by a well known pundit; whom he had just expelled from IW. The story has no connection to the gentleman 'named'. Luke went on to explain that at the event, money is only pledged and that as far as he knew, they had eventually tied up around £1.25m but certainly not £1.5m as reported; although he couldnt be sure of the exact amount. In the reporting, IW is never quoted as saying they had raised £1.5m or any sum. The reports seem to get this figure from an unknown source and they never bothered to check it.

One of the shareholders has said that they believe the amount raised was only just over £1m.

Does it really matter? Well it matters that reports in credible publications can be so far from reality and it matters that companies have made claims that are not true. But then this is equity crowdfunding and the pond is teeming with sharks.

The worst jounalism on the planet - Borrow My Doggy refunds via Angels Den

Various equity crowdfunding publications have recently carried a story about the funding of Borrow My Doggy. 

The same 'journalists' ran another story about the same company last year. Where are they coming from? Are they accurate? 

Here are the various stories - 

 https://www.crowdfundinsider.com/2016/10/91017-borrowmydoggy-closes-angels-den-funding-round-surpassed-1m-funding-goal/

Example  - ''On Friday (7th Oct), dog lovers service BorrowMyDoggy officially closed its equity crowdfunding campaign on Angels Den. The company successfully secured its minimum £1 million funding goal as it continues to develop its UK and Ireland dog services.'' The pitch is still open. 

Example - ''BorrowMyDoggy launched a Crowdcube campaign last year to raise £575,000, but then shut down the initiative after the company secured a £1.5 million investment from IW Capital through Crowdfinders, a crowdfunding event that brings investors and companies together for face-to-face pitches.'' The £1.5m has still not been invested.

http://www.cityam.com/226952/borrowmydoggy-rent-a-dog-startup-fetches-15m-via-crowdfunding-event-crowdfinders

http://startups.co.uk/borrowmydoggy-lands-1-5m-crowdcube-funding/

http://www.crowdfundinsider.com/2015/10/76127-borrowmydoggy-shuts-down-crowdcube-campaign-fetches-over-1-5m-through-crowdfunding-event-crowdfinders/

The list goes on - just google it.

So the story told is that BMD pulled out of a successful Crowdcube raise because they had received £1.5m in funding from an event run by Crowdfinders. The investor was IW Capital, apparently. IW Capital is run by the same guys who run Crowdfinders. They are essentially marketeers. They have a loose group of associated ECF companies under the umbrella marketing name Race for Scale. What this actually does in the real world is not entirely clear. Claims that it invested in various companies are not backed up by filings at CH, so we assume they punt investments rather than take them for their own account.  

The story goes on to say that Borrow My Doggy have just completed a £1m raise on Angels Den. In fact this a £1.6m raise (according to the platform) and is still active. The money raised so far, £1m, includes £879k from IW Capital (listed on Angels Den as a HNW individual) and the rest is made up by 4 investors - what you might call a very small crowd . For a company claiming to have 300,000 members you might expect a few of them to be investing? IW Capital have told us that Angels Den have their PR all wrong but have not explained exactly what this means.

So a year later some of the money reported as raised does appear to be there - subject to this Angels Den transaction actually completing. Remember the last time someone claimed they had raised £1.5m  - they hadnt.

Back in April this year the IW Capital press machine was whirring  - this is from http://www.techcityinsider.net/four-startups-join-100m-race-to-scale/ - ''IW Capital has committed £1.65m in funds raised for Borrow my Doggy. I love that company, it’s awesome,” said Davis, who is also the chief executive of IW Capital. So that's the same £1.65m that BMD is currently crowdfunding on Angels Den - or is it? April to October is 6 months but no investment even though its was 'committed'  - but was it? Who the hell knows. It's like wadding through a never ending mangrove swamp. 

Essentially both stories are complete rubbish. They have populated the internet as the truth, been picked up and regurgitated by lazy journalists. They are now facts. 

We dont know why they pulled out of their Crowdcube pitch, which was going well. Maybe someone out there does? The Crowdcube projections have been revamped for Angels Den with a much healthier looking EBITDA.

Confused? Well we are pretty sure that's the idea. 

And so it goes on.