Yet again Crowdcube projections are simply WRONG!

You really couldnt make this up - 7 Bothers Brewery by its own admission is selling its equity with misleading financial forecasts, verified by Crowdcube.

We wrote only days ago about how The Hebridean Food Co had financials for the past year that were not accurate. Now we have a similar situation here.

In the pitch forum, 7BB admit that the financials for 2016 which run to October 2016, are not going to be fulfilled because half of the turnover was supposed to be via a bar which hasnt opened and will not open before September 2016. 

So half of the £464k revenues have already vanished - yet the pitch says they are still good to go. What the hell do Crowdcube do on a daily basis? This took us about 3 minutes to ascertain. If the question had not been asked in the forum, are we to believe that this information would have remained unknown?

We all need to have better reporting on these issues. It makes a massive difference that a very small brewery trying to claim to be the next Camden, can take its annual turnover from £50k (actual 2014/15) to a predicted £450k in 12 months. A very substantial leap on a marketing budget of £6k - yup £6,000. Now we learn that this £450k will only be £225-£250k  - meaning that the EBITDA for the year 2015/16 instead of being £(60k) is likely to be nearer £(200k +)  - thereby wiping out the money they have almost successfully raised on Crowdcube.

Are you all mad?

Brexit hits investment into equity crowdfunding

As predicted here, the Brexit vote has slowed the money coming into equity crowdfunding pitches, research from Beauhurst shows. 

This is something we noticed almost immediately the result was announced. Investors we talk to and companies that had asked for our help with their campaigns, started to pause and many have now put it all on hold.

The total uncertainty as to what Brexit means and what the end result may look like is a killer for inward investment in what is a very high risk sector at the best of times. That, coupled with the lack of any real ROI after almost 6 years and an increasingly large wave of collapses and scandals, is taking its toll on the armchair investors brigade.

Crowdcube's now stalled cash grab is proof. 

They raised £6m in 24 hours when they opened (much of it pre pledged) but have only managed another £750k in the two weeks since - despite valiant efforts by Luke Lang's PRing Dept to pick up the beat. Even Luke cannot beat investor sentiment and their brash claims now look slightly foolish. Beauhurst found that the total number of investments offered across the various platforms had fallen by 17% in the first half of 2016 compared to the same period in 2015. 

With no end in sight to the void in information that our government has now hoisted upon us, things are likely to get much worse before they get better. 

Crowdcube's JustUs falls over the cliff

The Crowdcube JustUs pitch has bombed. We mean really bombed.

They had raised £427k on Crowdcube before as Emoneyunion.com in 2014 and has certainly not delivered anything that was promised then.

This time around they had a new angle  - apparently. But it must have been too complicated for Crowdcube's sophisticated investors to grasp as they really never got off the ground.

So what happens now to the original 100 investors will be a wait and see.

MindGenius passes £400,000 and 200 investors on Crowdcube

The Crowdcube MindGenius pitch has been extended and we would urge readers to take a look. This is exactly the sort of business that Equity Crowdfunding should be used for.

We helped the company to put their campaign together - so we know that the plans are sound and doable. This is as far from the usual Crowdcube glamour pitch as you can get.

The team behind the company have been there and done it once already - selling a previous company for over £20m. The new product, Barvas, has been very well received by the company's existing customer base and the money being raised will help to launch Barvas in the US, where a market has been identified and the channels to market already secured.

Its not hyped, its not fluffed up but it is all genuine. If company's such as this cannot raise finance via equity crowdfunding then you have to seriously ask what is the point in having this funding channel. 

Verto Homes' Towan Heights has still failed to pay off £1.7m Funding Circle loans

We have written recently about Verto Homes and their development Towan Heights which has overdue loans with Funding Circle.

Funding Circle told lenders that they would consider taking legal action if the loans were not repaid by the end of July. The loans are still outstanding and the news from the forum is not too good - https://forum.fundingcircle.com/discussion/13078/2million-newquay-property-loans-late-what-is-the-penalty/p1

Of course these loans are not Verto Homes', the liability belongs top Towan Heights LLP, of which VH is a partner. Zero information about this situation is available to investors on Crowdcube but that is standard fayre.

Does it matter - well apparently not as VH have 'raised' £1.5m on their £1m target on Crowdcube. Although as we all know, this is pledged money not raised and as in the case of Crowdcube's own cash grab, pledges can melt away faster than ice.

Let's see if the legal action makes any difference. The excuses for not paying have now run the full gambit and come full circle - facts are the money has not been repaid and the units have not been sold or paid for. Tits and up come to mind. 

Classic Crowdcube botch up shows nothing has changed despite Lang's assurances

The Hebridean Food Co complete a successful campaign on Crowdcube using inaccurate financials.

I love the outer Hebrides - this picture showing the majestic Hecla is where I owned a cottage many moons
ago.

The Hebridean Food Co is raising money on Crowdcube and has past its target - which is an excellent achievement. They are now overfunding. We have no problem with that.

However if you read the forum, you find a question that asks if the financials to July 2016, which give a turnover figure of £150k, are accurate. So this is now an historic actual figure, although the back end of it was a projection when put together. You would think and indeed hope that this figure along with the other figures to July 2016 would be 100% accurate. Why wouldn't they be?

You would be wrong.

The question was answered very roundly by the company. There was a 20% shortfall in sales for the year. So why, you might ask, is this not shown in the financials? What chance is there that you would find this information in the forum - it should be updated via a simple post by the company and platform. In fact if the question had never been asked would the company and platform have just carried on regardless to raise their funds, take their commission all based on blatantly false figures. Yes, it's what they do.

It's yet more evidence that Crowdcube's claim to have corrected their past DD and financial shortfalls is just more of the same PRing.

Writing on the wall for stalled Crowdcube cash grab

Crowdcube's latest cash grab is stuck and going nowhere. Investors on the forum have finally woken up.

In the run up to this latest Crowdcube pitch on their own site, Lang et al were PRinging that they had pledges of over £40m - it was everywhere.

Now the pitch has only two weeks left to run, it is firmly stuck below £7m - where it has been since it opened. You see the problem with PRing is that if most of it is fabricated, you look a bit on a arse.

The forum is populated with the sorts of questions we have been asking CC for 5 years. What happened to the pledges? How can you claim 'amount invested' when this figure itself is merely pledges? Why do you never mention any of the many failures financed through your platform? What ROI did the two 'exits' actually deliver? Why did you let 88 Delicious access CC investors which then led to fraud and those investors losing all their money and the perpetrator being sentenced. What about the due diligence for Rebus, Crumpet Cashmere et al? How will you ever get into profit? What due diligence levels are acceptable? Why let companies pitch with financials that they never get close to? At what level of failure is CC liable to investors for misleading them or gross negligence? What exactly does the FCA do? How close are CC to the FCA?

Yet more PRing evolved around the idea that CC would facilitate previous shareholders selling their shares in this round - but only if the 'amount invested' (although we know this isnt true anyway) climbed over £12m. Pure fantasy.

One of Crowdcube's smartest moves was to get the Crowd involved in the platform as investors at an early stage. You can see the die hards now on the forum trying to prevent the meltdown and their cash burning. It is clear from their comments that they know little about what is really happening and seem to have little interest in the truth. But we live in a democracy and I am fast becmoing convinced that all regulation is a waste of time and money - like the doppers in Brazil, people will always find a way around. Why not make it more fun and just allow them to take whatever they like - 100m in 6 seconds followed by all 8 runners exploding would be a fantastic spectacle.  

Anyway, well done everyone - most of you have at last woken up. Crowdcube will never get into profit and investors in this round at least, will never see any ROI. They have done a grand job of pulling the wool for 5 years but Luke's luck just ran out. So move over and let the serious platforms take it from here. Thanks boys.