Crowdcube's NY starts with a Bang and Whimper as I Love Gorgeous piles into the administration buffers

As yet another expensive flop on Crowdcube heads out of the door to oblivion, we ask if Crowdcube's 1 star rating on Trust Pilot is justified. 

I Love Gorgeous raised £690k on Crowdcube in the Summer of 2016, so just over 2 years ago. Now it has been put into administration in an attempt to find a buyer. As with most administrations, it seems unlikely that Crowdcube investors will see their money again. The company has 3 outstanding charges with HSBC registered at CH. All are 4 years old and do not seem to be for large amounts.

The company had projected that in YE March 2019 it would be making a profit of £1.1m on a turnover of £4.8m. Well if you believed that you will believe anything but clearly investors did. As is alarmingly common on Crowdcube, the actual figures given to potential investors for years gone by bear little resemblance to figures filed at CH. The company was making profits before coming to Crowdcube to 'expand'. Exploded might be a better term. 

Be it bad luck, unfortunate timing, Brexit, the easterly wind or simple crass management, the outcome is a familiar one. Another business failure promoted and facilitated by Crowdcube. HNY boys.   

Are we really trying hard enough to get this right?

Seedrs Transfer Guru closes down and reveals the truth behind many equity crowdfunding businesses - the lack of any planning or research and easy money.

Transfer Guru wont break the bank - they raised just £82k. Mind you 100 £82ks suddenly starts to add up.

In their end of life letter sent to Seedrs SHs they reveal a startling fact -

In short, after the round of investment on Seedrs, TransferGuru soon came to the conclusion that the consumer market was not able to offer the repetitive revenue required to grow the business. We made the decision to pivot into the business space. This is where we managed to prove some demand, but over the last two years, were unable to scale this with the limited funds available to us at that stage, and unable to raise further funds without being able to prove the scalability of our operations. Meanwhile, at a macro level, the new introduction of services such as Transferwise and Revolut for business provided additional pressure on TransferGuru's use case.

Well the first line says it all. Get the money in and then try to decide if the idea works. That is not how this is supposed to work  - You were only supposed to blow the bloody doors off.

We need entrepreneurs to underdstand that having an idea and getting funding to play with it is not really what ECF is about. You are supposed to use your own F&F money to get to that stage. This cash is far too easily accessed and is being far too readily wasted. Why would Seedrs allow this? Ah yes a thing called commission. Someone has to pay the bills. 

Lessons learnt? Well alomost certainly none. Roll up Roll up. 

Cocoon fails and losses Crowdcube investors £1m plus

Cocoon raised £2.3m on Crowdcube, from over 1000 investors. Now the failed company, 'worth' £15m in 2017, is being given away leaving shareholders to rue their own poor judgement. 

Shareholders might exclaim that the management at Cocoon were full of it. And they would be right. They might also question Crowdcube's part in this. But as usual the debacle that is now unfolding will benefit the purchasing company, some of the management, the sales team and no one else. Well apart from Crowdcube who have already made their commission.

In the usual pathetic suicide note, shareholders are told - 

It is clear now, that the business required significantly more time and investment than that available to achieve success in this dynamic and competitive market. 

Who knew that - it was clear back in 1890. 

These guys were seasoned entrepreneurs (according to the glowing pitch on Crowdcube). So how does that make sense with this statement above, which could have been written by a year 4 student. 

Not sure what the next stage is when you leave farce - but Crowdcube are now in it. 

Videogram Worldwide is latest Crowdcube failure

Videogram Worldwide took £55,000 of Crowdcube investors in 2014. Later that year it took another £50k of investors on a platform called Crowd for Angels. Now it has filed for dissolution. 

Oddly the Crowdcube round has been taken down but its still mentioned on the C for A site. 

Accounts for YE August 17 show zero cash but a small profit, although we suspect this is mistake as the share cap account has reduced by a similar amount. They have refiled accounts before. We wrote about their joke accounts and their ridiculous pitch here many years ago. 

Really no idea what happened here. The only fact seems to be that this was never a business worth investing my socks in, let alone £1. 

Yet another Crowdcube moment. Happy losses. 

One we missed. Rateragent closes down after some very odd Crowdcube numbers induced investment.

This is the Crowdcube model in action. Rateragent made several claims and produced some very interesting numbers in their 2015 Crowdcube pitch. It managed to raise £134k from 133 people who really should be ashamed of themselves.  

The company then filed one set of accounts for 2015 and has filed nout since - being closed by compulsory strike off in December 2017. Con? Well you judge. Revenues went from £170k to £2.6m in 2 years - well of course they didnt but that is what Crowdcube agreed to print so they could claim their commission. We will never know if there were any revenues  - losses for 2015 were more than double the Crowdcube figure. Our ridiculous accounting system means that we cant learn much from their filings. 

We called this back in 2015 - here. 133 of you didnt listen. Crowdcube made around £6k, everyone else lost the lot.

Its worth noting before you read the final paragraph that the company's strapline is -

Rateragent - Where transparency is Key. 

In a final baffling twist, Rater Agent Reviews Ltd, with the same logo, is now operating here. This company was incorporated in August 2017. Joshua Paul Rayner is the sole director and shareholder and was until a few months ago a director of One Moment Ltd - the parent of the original Rateragent and the company Crowdcube investors put their money into. Ring any bells?

Yet another Crowdcube moment and groundhog day.  

Yet another Crowdcube success fails

We agreed not to disclose the name of this company, as they are trying to complete a deal that will mean they dont have to liquidate. But it is a busted flush in terms of the business and its 200 plus Crowdcube shareholders.

The CEO of XX has promised to give us the details of how the company came to this situation, in a month or so. He said he would also reveal his feelings about Crowdcube. That should all make for interesting reading. It is at least some progress to see a CEO who has used Crowdcube, try to clear up the mess rather than phoenixing or just disappearing as most of them do.

This company had some substantial Government backing, something that may well have swayed Crowdcube investors. You know how it works - oh look such and such which has a board crammed full of experienced business leaders has backed this venture, so better come on board. Only 2 years later and bang - its all gone tits up. All the investment burnt.

Just in case you are wondering, the 'sale' in progress is more of a handover with next to zero return for anyone. 

We'll let you know.

Thanks to the tip off from anon.  

Crowdcube start 2018 as they intend to go on; with yet another sad story of failure

Angelberry have been defrosted. The took £200k off Crowdcube investors in 2014. Now they have for first time since, communicated with those investors to say Goodbye, Cheerio, So Long Suckers.

This is another one we called - see here

Here is the full text of the first and final communication from the Angelberry founders - the opening line is quite brilliant! The rest is quite sad and just shows what an utter load of kack the idea these guys had, was. The sums mentioned are highly doubtful!

Before you get stuck in, we will have some good news in the next few days about a pitch that we have been helping and that we feel is worth taking a look at. So watch this space. One thing for sure is that it doesnt include any fraud.

This a summary of what follows -


Hi Suckers -

We have spent all your money and so will closing down now.

Your money helped us travel around the word for 2 years and have a ball.

None of the plans we mentioned to you on Crowdcube worked. They all came to shit.

So until the next time, so long Suckers. 

Hi All, Sorry for the delay in this update, it’s been a tough couple of years and we have unfortunately had to take the decision to close AngelBerry ltd due to a lack of growth and profitability. To give you an overall view of what we have been up to please see below. What did we use our CrowdCube Raise on? - Used our CrowdCube raise to buy our trade show stand, which we then shipped to Trade shows in Mumbai, Paris, Johannesburg. These shows were planned to recruit and sign up new Master Developers after our initial success in Dubai - We had several strong leads, but we could not find anyone to take on the Master Developer licence for anywhere in Europe or India, which was our main avenue for growth as per our business plan - In Johannesburg we signed up one franchisee for Richards Bay (North of Durban). No one wanted to take on the Development rights for any other African countries. We had hoped to find developers for Mozambique, Botswana, Kenya and Nigeria - Our new office staff hires that we took on pre-funding were eventually let go once the shows had taken place and we had not secured any MD’s. Without the planned income from the sale of new territories, or cash flow and funding was massively decreased UAE - When we raised, we had contracts in place for stores across the GCC – 80 stores in the coming years. We were expecting big growth and store numbers from our UAE developers, however they did not stick to the agreed store schedule, nor did the expansion into Saudi Arabia or the rest of the GCC happen as promised and contractually agreed upon - This lack of growth hit our potential to grow further as development overall was slow and showed a slow return to potential franchisees. Our master developer was not keeping to their agreed schedule because of a poor return on their investment from the first two stores - Due to their failure to open more stores and deliver on their promises, including payment for stock and royalties, a level of distrust built up between us and our UAE MD’s – they stopped all communication in 2016 South Africa - Our franchisee signed from the Johannesburg trade show opened her store in Richards Bay in October 2015, and was then closed by our MD’s in March 2016 due to repeated breaches of her agreement, failure to pay royalties, failure to pay for stock, failure to maintain correct and true records and repeated failure in food hygiene standards - The expected NuMetro cinema expansion did not take off due to low sales volume, they currently have one location open in Pretoria. James met with the directors to discuss continued growth and roll out of the kiosk, but due to low sales and a relatively high build cost per kiosk they did not want to continue the roll out - We put a lot of effort into trying to secure the Food Lovers Market deal with our SA MD’s, after running 5 trial stores across different demographics and store layouts (Cape Town Food Lovers Eatery / Food Lovers Market Nelspruit / Caltex Cryildene / Caltex Fresh Stop / Caltex Louis Trichardt ) the sales were not strong enough after our 6 month trial and did not return the required level to warrant a roll out across their stores for the footprint we needed. Even running smaller kiosks in the Caltex stores did not get us to the right level. We also tried to increase revenue through diversified products including freakshakes, waffles and donuts - Because of this, our planned partnership with FLM did not transpire and there was no national roll out. Our plan for an AngelBerry hard pack product on their shelves did not come off either due to the unsuccessful trial stores Mauritius - Our MD sold to someone local 2 years or and left the country to focus on the South African development Overall - We didn’t get the required number of master developer sign up during our initial trade shows which stunted out growth projection, causing us to pivot and look for commercial opportunities instead - Without MD’s or franchisees signing up, we didn’t have the required cash flow to move forward and as a result we needed to take on more investment, this enabled us to keep the company afloat whilst we tried to secure the FLM deal - We had to sell our city centre location to help keep the company going, in additional we raised an extra £170,000 internally - In September 2016 we had to close our Imperial Park store due to the rent review resulting in a rental increase from £17 per sqft up to £35 per sqft making the store unprofitable, and as a result we executed our break clause - Despite extra funding, new product launches, new menus and new branding, we could not increase the franchised store revenues enough due to the seasonality of the product - We focused on growth which required funding to keep us going, and as repeated deals did not come off and the funding ran out, we are left with no option but to close AngelBerry Ltd We put everything into growing the brand and company, expanded into overseas territories, negotiated with supermarkets, cinemas and service stations and gave it our best shot. We are extremely proud of what we achieved, unfortunately the required deals did not materialise and after 5 years of trying the planned development and growth of AngelBerry did not come to fruition. We apologise to all of our investors but thank you for your support and belief in us. Kind Regards, James and Ryan