Perry Carroll is still peddling his version of the Solar Cloth Company disaster

Peregrine Carroll, to give him just one of his used names at CH, took £967k off Crowdcube investors. His company Solar Cloth Company, then went into administration, was sold for tuppence to a company that also went into liquidation. SCC owed around £3m. It is now finally dissolved.

You can read all about it here and here

We only mention this again as we glanced at Perry Carroll's CV on Linkedin, when doing some research into what had happened to the various people who have abused Crowdcube and we found he had rewritten history. Take a look here. It is pretty shocking when you consider what a mess he left behind and the fact that his past record, hidden by Crowdcube's total lack of DD, would have suggested this was a guaranteed outcome.

Then take a look at what the Crowdcube official SCC page says - no mention of any failure at all. You wouldnt believe it if you did not see it with your own eyes. Why are they not obligated to give the public the facts about this sort of catastrophe under FCA rules? It is exactly the sort of useful information investors need to avoid another con. 

Perry now goes by the name Peregrine Sakata-Carroll. Well that's for now anyway. Operating out of Cambrdige, he runs his own consultancy. There is nout as queer as folk, eh.

Insolvency Service get it wrong again over Solar Cloth Co

The UK Insolvency Service has looked at the dealings of the Director of The Solar Cloth Company and decided that they do not warrant any action. 

No that is not a joke. 

You may remember the SCC. It helped itself to loads of investors cash using false information about the founder and his previous antics. The story was well written up in The Times. It was a caste iron case of fraud - all helped out by the Crowdcube platform.

Now in letting this individual go, without any reprimand the Insolvency Service quotes Section 6 of the Company Directors Disqualification Act 1986 where in order to be disqualified, said director has to have acted in a way that makes him unfit to be a company director. Text below -

Dear Sir/Madam, 

The Solar Cloth Company Limited Company Directors Disqualification Act 1986 I refer to previous correspondence in this matter and advise that as a result of the investigation undertaken, the Secretary of State does not propose to take disqualification proceedings against the directors of the above company. Such disqualification proceedings when brought are done so pursuant to Section 6 of the Company Directors Disqualification Act 1986. 

Whilst this may not be currently relevant to you it might be helpful for the future if I advise you of the wording of that section. 

It says: (1) The court shall make a disqualification order against a person in any case where, on an application under this section, it is satisfied — (a) that he is or has been a director of a company which has at any time become insolvent (whether while he was a director or subsequently), and (b) that his conduct as a director of that company (either taken alone or taken together with his conduct as a director of any other company or companies) makes him unfit to be concerned in the management of a company”. 

Accordingly if, in the future, the Secretary of State should learn of any unfit conduct relating to this company it could be included in any disqualification proceedings brought in respect of this or any future company failure. 

Yours faithfully Naomi Fulford 

Well if this guy has not acted in such a way then we are not going to see any companies' directors disqualified ever again. Also, it seems unlikely the company will be able to oblige the Secretary of State in the final comment as it no longer exists! What a ridiculous outcome.

So just beware the presence yet again of one Perry Carroll or whichever name he chooses from his list. He'll be the one flying some amazing money spinning business and asking for your cash.

We wrote about him and SCC here

Clearly something needs to done about the 1986 Act - yet another piece of useless legislation that pre dates the mass use of the internet. Just WAKE UP will you please.

Crowdcube finally admit that their Due Diligence is pitiful.

So at last we have it in writing. Crowdcube have admitted that one of their now failed companies was poorly scrutinised by the platform and they missed a crucial piece of information off the campaign. A piece that would most likely have made investors think at least twice before jumping in. They, as usual, have now last all their money.

According to Crowdcube, they have now corrected the error in their systems and this couldnt happen again. Which is an interesting comment - because it has. A whole year after this company raised its first CC round, the Solar Cloth Company raised £1m. We now know that the information supplied on the platform about the SCC was missing crucial elements - like the CEO's bankruptcy and failed businesses. It is a similar story here - no lies just massive, glaring chasms in the information supplied. The result of a totally amateurish approach. This is the information asymmetry we have been banging on about for years. 

So we have made some progress - Luke Lang never normally admits to anything and to be fair he didnt admit to this - his PRinger did. But it comes to the same thing.

But Crowdcube are still living in the Land of Nod if they think their DD is fit for purpose. We have the evidence that proves otherwise. 

Solar Cloth Company administration creates more questions than it answers

The Solar Cloth Company raised around £1m on Crowdcube and within 18 months it had collapsed, taking all this and other money with it. 

It is one of the scandals that Crowdcube try very hard to ignore. Recent revelations by the liquidator will make this much harder. It really is one massive bloody mess entirely facilitated by the Crowdcube platform. It looks likely that the final outstanding loss will be north of £3m. Crowdcube will of course have kept their revenue from the 'deal'. 

We have written about the lack of due diligence carried out by Crowdcube on the CEO - Perry Carroll, or Peregrine Carroll, or Perry Sakarta Carrol or any other aliases he used at Companies House to hide his bankruptcies and failed enterprises. According to the Crowdcube pitch he was a leader in his field and a successful businessman. They simply never bothered to check.

This is what the Crowdcube pitch stated in 2014 -

Key drivers: Sales will benefit from a combination of a higher company profile, increased install base, and intense lead generation activity from an enlarged sales team.

Sales estimates: Sales forecasts of £7.5m, £40m and £48m over the next three years are in line with other new entrants to the photovoltaic industry. A B2C installer of solar panels demonstrated a similar rapid growth over three years of £0.2m, £7.5m and £26m.

Basis of modelling: The company sales forecast has been modelled on industry averages. Sales projections are conservative and within reach of the company structure. A current pipeline of over £4.5m has been achieved with only one full-time sales professional.

The evidence very clearly shows that all this was rubbish. Instead of £7.5m, the company's revenue was £180k and instead of £40m the company was closed. The obviously outrageous claim to a current pipeline of £4.5m is simply a lie. All of this was checked and rechecked by the Crowdcube DD department before they published it on their FCA regulated platform. It is clear the platform is not fit to hold a FCA licence of any description.

Now the interim report shows just how poorly run this company was. The debt declared by the directors on collapse, that was due to their landlords, was put at £600. The claim that has come in from the landlords agents is for £185,000. This is sounding a bit like the reverse of the Crowdcube projections.

Meanwhile nothing has been done to sanction Crowdcube, who despite claims to the contrary, are still pumping out fantasy numbers for companies that will never get close to them. They have friends in high places. The FCA are still sleeping on it - literally.

The final report will reveal just how far off the mark Crowdcube were. A recent article here is worth a read. 

Solar Cloth Company new owner files for Liquidation

The Saga of the Solar Cloth Company, which we revealed some months ago, keeps on going. Funded via Crowdcube and bought out of administration shortly afterwards, the purchaser has now also gone bust.

It was not clear for sometime who had bought the assets of SCC from Irwin and Co - the insolvency company dealing with SCC's administartion. However it has now come to light that it was Base Structures, who had entered into a JV with SCC before all this kicked off.

So now Base Structures have filed for Liquidation. 

According to the filed documents, SCC had invested £1.5m in Base Structures. One of the Base Structures directors, Chris Ives, is also to be found on the documents filed for SCC, verifying them. 

The liquidation of Base Structures is being handled by the same company, Irwins, as the one that is still in charge of the administration of SCC. they have not filed any documents since the initial report.

Draw your own conclusions. 

The Solar Cloth Company Crowdcube Fiasco illustrates the depths of the problems faced by Equity Crowdfunding.

Today's revelations in The Times about The Solar Cloth Company (SCC), which we helped to put together, reveal a dangerous absence of reality at Crowdcube and the FCA.

Dont get us wrong - we know that all success stems from failure. There is nothing wrong with failing, in fact it is the best proving ground. But its the nature of the failure and your ability to learn from it that counts. It seems, despite many examples of the same repeated problems, that equity crowdfunding is not learning anything.

A good business can fail for any number of reasons but fraud is not one that should be accepted. We and you, the investors, only get to hear about the problems once the company has closed and it can take a while to burn £500k or £1m. By then it is too late and many more pitches would have been funded using often similar deceits. 

SCC is just one case in many that illustrates clearly that the number one UK platform, Crowdcube, is simply not carrying out proper due diligence and never has. You can see the same patterns in other Crowdcube funded pitches that have either failed or missed targets by millennia. Here are few to make the point -

Water Babies the Musical
Front Up Rugby
Ovivo
Crumpet Cashmere
88 Delicious
MASS
Rebus
Pizza Rossa
Droplet
Bookbarn International
Fourex
Shopwave
Rushmore Group
Kammerlings
Righteous
London Distillery
Zero Carbon Food
Brupond
SDL
Kinopto
Wild Trail
PDB
Icomply
Ineed
Stakis Daycare Nurseries
Flavourly
Ubrew
Red Advertising
Green and Pleasant
Get Site Tracked
Seek and Adore
Share and Compare
Glassfit Inc
Hug and co
Bubble and Balm
Lawbit
Solarmass
Playrcart
Uni Fuels
Pixelpin
Dr Jackson
7 Billion Ideas
Jam Vehicles
Frank Staks
Deskbeers
Peach Lettings
My Barrister
Minor Figures
New Galexy
Crowd Mortgage

You get the idea, there are plenty more. Under this pile lie ten times as many, that have not yet filed accounts  to show how they have performed post investment.

Crowdcube, by their own admission, did not check SCC's future £4.5m sales pipeline, which we now know was fictitious. They did not check the immediate sales figures given by the company, which we now know were fictitious. They did not check out SCC's MD and his past record, which turned out to be verging on fraud. All they actually checked was that they had projections enticing enough to fool 400 investors into parting with their cash; a total of almost £1m.

Crowdcube picked up a 7% commission on that, so is it any wonder they dont bother to lift the covers? When the company goes tits up, Crowdcube get to keep their 7%, no matter how negligent they have been. It's a gravy train.   

We first contacted Crowdcube in early 2012, when it became apparent to us that their due diligence was very poor or non existent. We offered a remote service to them, FOC at first, to help them. They turned this down saying they had it all under control in house. Well, we can all now see what a whopper that was. Now they tell us that when SCC pitched last year, their systems were lacking (!) but now they have tightened them up. Haven't we heard that before, several times? 

What is more alarming is that you, the investors, seem to support this platform, whatever they get up to. Incredibly so far, to the tune of £6.6m in their latest cash grab on their own site. Maybe you do not realise that the failures we have seen so far will be as nothing compared to the failures which are backing up. Of course we expect some of Crowdcube's 426 raises to be successful - at some stage, later.....probably......well perhaps, possibly. In fact there is now a pitch on the site which we helped, MindGenius, which if funded could well go on to give investors a good ROI. We know this one has credible forecasts and a great pitch; we helped create them. 

But many of the 426 that have funded, it not all, are doomed to failure for the very simple reason that the platform encouraged them to pitch with totally unrealistic projections, valuations and expectations. And as we now know from the SCC debacle, they dont bother to check these out. Two good current examples are Sugru and Earlybird, both now trying to raise new capital on Envestors - having missed their Crowdcube projections by miles. See here- http://fantasyequitycrowdfunding.blogspot.co.uk/2016/07/why-early-bird-regurgitates-on-envestors.html and here - http://fantasyequitycrowdfunding.blogspot.co.uk/2016/07/are-sugru-coming-unstuck-after.html

If you do not believe what we are saying and clearly many of you don't, then just look at the current case of Verto Homes.

The two founders were involved with Manor Rose, admittedly before Paul Moore took over, but nonetheless it is the same company - see here. You dont get that mentioned on Crowdcube.

Towan Heights LLP is a company so closely linked to Verto Homes that it has the same address and email and Verto own its website and sign off its accounts. Towan Heights LLP have overdue outstanding loans with Funding Circle which get no mention on Crowdcube - the amount is around £1.7m. We are told that if the money is not repaid by the end of July then FC may take legal action to get it back. You dont get that on the Crowdcube Verto Homes pitch, which is now at £1.5m raised of an original £1m target. The loans may well be paid back and yes Verto Homes are legally correct when they state that they have no exposure to FC directly. But in the FC loan documents, Towan Hieghts LLP talks about Verto Homes as the builders of the project being lent against. They are essentially one in the same.

All Crowdcube have to do is mention these facts - they are facts after all, so why hide them? Then investors can quite rightly make up their own minds. So why dont they do this? It seems that the urge to complete pitches, which is their main or only revenue source, is over powering. They just cant help themselves. They tell The Times that they have beefed up their DD since SCC; well here we find out otherwise. Unless of course they chose not to reveal these facts. Crowdcube's own DNA gives us a clue - they have dressed themselves up in some rather exaggerated claims - see here

When you build a company that is burning over £8m a year on its very existence and is backed by a GP of around £2m, then you need to cut corners. Ever since they started in 2011, the founders have ducked and dived like a couple of wide boys. Massive expenditure on PR is seen as far more important than any expenditure on the due diligence. Crowdcube employ interns to run their show; we know as some have spoken to us.

The conclusion has to be that Crowdcube is not fit for purpose. But the FCA are unwilling to touch them and now both Governemnt and large VC's have far too much at stake to admit it. Only the 285,000 investors can make the required change happen. Oh no wait, Crowdcube have corralled them into their own stable by making them shareholders as well, so they wont do anything either.

The arrogance of the Crowdcube founders is indicative of an era where arrogance has replaced the truth. We face the chance of being removed from the EU by the arrogant lies of Bojo, Dan Hannan et al and the chance of seeing a US President so arrogant in his ignorance, it beggars belief.

Just read the posts on this blog if you need convincing. 

Crowdcube failure Solar Cloth fails to find a buyer

Solar Cloth assets have been sold by the Administrators and shareholders will see no return

Crowdcube's largest failure to date, where £1m was invested, has been wound up by Administrators with the company assets being sold off. The buyer is as yet unknown.

A sad ending to very sad tale. 

None of it Crowdcube's fault of course. Its ironic that it comes on the same day that someone else was in the news saying that whatever happened, he couldnt be sure that it did happen because he wasnt there and anyway it wasnt his fault if it did happen and he doesnt want to blame anyone, even if it did happen.......anyway. Right? Got that ?? Good. Lets move on shall we. 

Solar Cloth Company sails away with new buyer??

Interesting piece here about Solar Cloth potential sale to ex director - our guess is Perry and ex backer, again our guess is the guy who put in the £500k, Charles Shale. As Crowdcube shareholders dont have any position here, they will most likely be shut out - the administrator's job being to rescue money for preferential creditors.

http://www.businessweekly.co.uk/news/cleantech/solar-cloth-company-set-sale-out-administration

All a little too obvious we think!

Crowdcube were recommending Solar Cloth at the same time the company was going bust!!

We found this on the Crowdcube blog dated January 2016. (see below)

So this was after the CEO of Solar Cloth had jumped ship. Do Crowdcube take any interest in the companies they fund or the advice they give? For those of you who dont know, Solar Cloth has gone bust taking with it almost £1m of Crowdcube investors 'diversified' investment. A truly 'great start' from the Crowdcube out to lunch department............................

When diversifying a portfolio some investors may prefer to keep their investments to specific industries, technology for example and create their portfolio by investing in different stage companies within this sector. For example, an investor could have invested in:

Mindflood – a start-up tech company offering 12% for £100,000

Cell Guidance Systems – an early stage tech company offering 5% equity in return for £100,000 back in 2013

The Solar Cloth Company – a growth tech company offering 10% for £750,000.

These range of investments would be a great start to a diversified portfolio.

The picture shows a Crowdcube promo. All but ineed no longer exist!

Solar Cloth gets more mysterious

There is something very odd about the demise of Solar Cloth.

In their Crowdcube raise of £960k they had one investment of £500k by a person named as Charles Shale at CH. Who is he? Why would anyone invest £500k in this venture without at least taking a seat on the board?

Recent announcements show that SC had been reorganising. There were press releases about a merger with Base Structures and the original CEO stood down to be replaced by a new one as recently as February this year. Why?

RBS had given them an award - but then that's RBS for you.

To spend all the money they raised, which was £210k more than they needed, in just over 12 months is all a little odd.  

Solar Cloth promise the world and deliver nout. Crowdcube stand by and allow it.

When Corwdcube promoted Solar Cloth with the following, did they really think allowing this sort of hype was sensible?

The Exit Strategy

Exit strategy 

Our aim is to sell The Solar Cloth Company for £100 million in three years' time. This is based upon our target of achieving a turnover of £40 million/year, giving an EBITDA of £6 million, This equates to an investor IRR of 440%, and a 2.5 earnings multiple, which we believe is in line with the Renewable Energy Services & Equipment Industry IPOs such as First Solar, Inc and SolarCity, Inc. Potential buyers of The Solar Cloth Company could be from three sectors:

- Upstream Solar cell manufacturers 

- Power generation and operation companies

- Construction companies

The Financials

These notes should be read alongside the Financial Snapshot

SALES:

We plan to invest heavily in sales and marketing, with over £100k spent on lead generation and branding in the first 12 months.

Key drivers: Sales will benefit from a combination of a higher company profile, increased install base, and intense lead generation activity from an enlarged sales team.

Sales estimates: Sales forecasts of £7.5m, £40m and £48m over the next three years are in line with other new entrants to the photovoltaic industry. A B2C installer of solar panels demonstrated a similar rapid growth over three years of £0.2m, £7.5m and £26m.

Basis of modelling: The company sales forecast has been modelled on industry averages. Sales projections are conservative and within reach of the company structure. A current pipeline of over £4.5m has been achieved with only one full-time sales professional.

Its plain BS and a lot of so called sophisticated investors (Crowdcube's term not ours) were taken in, hook line and sinker. One guy, Charles Shale (is that name a joke?), invested £500k. What a clutz.

The guy behind the pitch, Perry Carol, an industry expert according to the fully vetted Crowdcube pitch, clearly saw this coming and jumped ship in December last year. How is that possible?

Surely time to put away the wrecking ball that is Crowdcube and let professional people get on with using and promoting ECF responsibly. It is possible but certainly not the way they do it. 

Is this the start of the avalanche?

Crowdcube's biggest disaster to date 

Rumour is that The Solar Cloth Company, which raised £960k on Crowdcube in March 2015 has closed.

This is not public knowledge as its not yet up on the CH website but a little birdy told us a letter from the administrators had just arrived. Or was it a mole, sorry cant remember!

If true it will make the previous winner of the biggest disaster prize, Rebus, take second place.

We are waiting for Crowdcube to trot out their usual PRing. Surely at some stage they will have to take some responsibility for this carnage?

More to follow.

PS just called and spoke to Solar Cloth and yes they went into administration last week. They say the changes in government funding for renewables made it impossible to survive.