Is Crowdcube's Inspiral Visionary Products about to go bust??

Inspiral Visionay Products (IVP) raised £250k on Crowdcube in 2013 - its was lauded by the platform as a major success.

We pointed out a year later that they had failed to get anywhere close to their projections.

Inspiral's sister company Ekopia has gone into liquidation.

Now for the interesting part.

Ekopia have gone down all guns blazing - owing £454k to creditors, most of it to trade creditors. The total it can't pay back is just shy of £500k.

The accounts for IVP  are late and a little thought crept into our mind concerning the possibility of cost and profit centres. Of course we would have to wait for IVP's accounts to be filed but the size of the trade debtors for Ekopia seems high for a small restaurant outlet alone. Certainly much higher than the reported 1 year creditor figure on the accounts for YE March 2015.

We will let you know.

We had this response from the CEO of both Ekopia and IVP

Hey Rob - interesting write up about us on your blog - its good that people are watching carefully but l do need to set a few things straight. Yes our sister company did go into administration - which sadly was the right thing to do to allow us to focus fully on the core business. We owed around £29K to creditors at the time - though a good chunk more was owed to our own wholesale company (though nowhere near £500K). None of the investors in that business lost out as we had given all of them shares of the wholesale business when this was founded 5 years ago. Our accounts are late because we switched over to SAP last year and that has been a tricky new system to come to terms with - so we're making sure we get things right. Yes we are not quite on track with our forecast but we are as dedicated as ever, driven by our mission and determined to create a successful and thriving business. We've learned at lot in the last few years and we have a huge amount of opportunity on our near horizon. Keep up the good work of checking in on people's promises 😀 Dominik (Co-Founder and CEO)

Dom may not be a figures man - the actual, factual, liquidator report verifiable, figure for unpaid debts is £465k - most of which is in unpaid trade creditors. That is quite close to £500k in the world of stats. Ok so £217k (or just under half) of this is owed to Inspiral - so that bit's true. NO IT'S NOT - the IVP accounts have now been filed and the debt was only £165k see post on IVP.

We are not sure what to make of this really? To claim that Inspiral is 'not not quite on track' is laughable - its on a totally different line altogether, heading in the opposite direction.

Inspiral Visionary Products enters administration after raising £250k on Crowdcube

It seems unlikely that Crowdcube are ever going to break the cycle of funding companies that a few years afterwards go bust. Until, that is, they change the way they select them.

Inspiral VP was neither visionary or inspiring. We wrote about them before here when their sister company, Ekopia, also went bust leaving SHs penniless and debts of almost £500k. As the CEO pointed out in a comment we have produced in the link, no shareholders in Ekopia lost out as they were given shares in IVP. Well even if that were true, it now seems Dominik Schnell was a total fantasist at best. 

He will certainly have earned his listing in our black book when we publish it.

The Crowdcube website as ever makes no mention of this company demise on the IVP page. Odd, how they are SO keen to trumpet what little good news there is and ignore, delete and hide away all the volume of very bad news. How misleading is that - you guys at the FCA? Oh sorry forgot - you are involved in all of this as well. 

IVP never produced anything other than mounting losses. Promised listings never appeared and sales forecasts were a total joke. Shocking waste of government funds. 

Ah....................... now that does sound just like a Crowdcube success.  

Inspiral posts further losses

Inspiral Visionary Products raised £250k on Crowdcube in 2013.

According to the Crowdcube projections, the company would make a net profit of £1.5m for YE October 2014 and a net profit of £3m for YE October 2015. The filed loss for YE March 2015 was £260k, of which £127k was from a write off from their sister company Ekopia, which went into liquidation recently - see here -
http://fantasyequitycrowdfunding.blogspot.co.uk/search?q=+ekopia

Inspiral make a good product and have a goodly number of stockists listed on their website. However they dont seem very good with figures and do not always tell it as it is. The gap above between actual performance and the Crowdcube projections is just one illustration. These projections were never going to be met. They are a pure fantasy used to to gain £250k worth of funding.

In the original pitch they made various comments about likely contracts with M&S and Pret, both of which would have clearly led to much improved sales figures. We dont think these contracts were ever signed. They are not stocked in either now.

In the initial Statement of Affairs for the liquidation of Ekopia dated 27 January 2016, the director of Ekopia (also a founding director of IVP), stated that Ekopia owed IVP £227,527.99 - a very precise and accurate number. According to the accounts just filed for IVP, the debt is in fact only £162,457. You can see this in the Ekopia post above. How is it possible to be so wrong?

So the lesson here has to be the same as most lessons that we post - when it comes to Crowdcube, you really cannot believe any of the information in any of the pitches. Looking back over the IVP pitch there are many instances where they claimed one thing on the forum which has now turned out to be not strictly correct, both about IVP and Ekopia. Future contracts not already signed up should not be used to con people out of their money.  

Some cold hard facts

If you read the PR put out by the likes of Crowdcube, you would think that ECF is saving our nation.

Since 2011, when this all began, we have kept records on the companies that have successfully raised money on various ECF platforms. Later, when they have filed accounts, we compare their projections, the ones used to sell the equity, with the actual sales and profit/loss figure.

Here is a list of the results. The companies on the Mind the Gap List have missed their projections by at least 30% and in most cases somewhere between 100% and 1000%. The record to date is for a YR1 sales projection for £860k which became a real £86k. Many have tried to raise more cash, some successfully, quite a few have closed and the rest are just trundling along, nowhere near to the place they said they would be by now. We have also for sake of balance published a list of the companies that our records show have achieved their stated goals

MIND THE GAP LIST

Dr Jackson Ltd
Righteous
Purple Harry
i-comply
Seek and Adore - closed
Lawbit
The Printers Inc
Financial Fairy Tales
ineed
Marine & Auto Security - closed
Brupond - closed
Oriental Rugs
Kammerlings
Green and Pleasant (28 Broadwick St Ltd) - closing
Red Advertising
SDL
Crowdcube - !
London Distillery Co
7 Billion Ideas
Front Up Rugby - closed
Waterbabies - closed
Big Barn CiC
Stakis Daycare nurseries
Inspiral Visionary Products
Thoughtful Bread Co (Think thoughtful Ltd)
Carbon Lights Solutions
Pizza Rossa
Wild Trail Ltd
Quantock Brewery
PDB
IQden  - closed
IMD Europe - inactive
FabFob
Sweatly Stevia Ltd
Kinopto
Get Site Tracked (Sole Trader Ltd)
Glassfit Inc Ltd - inactive
Affresol
Bubble and Balm - closed
Ovivo - closed
Pixelpin
GF Foods York
Landbay Capital (now LB Partners and refunded)
Hopstuff
Zero Carbon Food
Farmdrop
Bnktothefuture.com  - inactive and under investigation by FCA.
ECarclub Ltd

THOSE WHO HIT THEIR TARGETS

St Vibes Ltd


That's it for now. As most of the activity on these sites has been post summer 2013, we can expect the Mind the Gap list to grow exponentially in the next year.

It does make a bit of mockery of the claims made by the people from Crowdcube. PR is king, long live PR.