Daisy Green raised £775k on Crowdcube via a bond issue for 4 years at 11%. Two years later they are repaying lucky bond purchasers.
Well lucky in the sense that at least nothing has gone wrong and everyone gets a little interest ( the company is about to make its 4th and final payment on 9th December) plus their principle back. The lost opportunity costs are best ignored. The risk, these bonds have no security attached and are not covered by any Government scheme, should also be ignored.
Daisy have seen good growth and are ahead of their projections which is very encouraging. On the back of this success they have come up with deal with a UK bank to fund them - we presume at less than 11%. This deal will, according to the company, allow future growth and success but that will not involve the investors who facilitated it. So the company have got rid of the now burdensome bond. They must be hoping that they dont ever have to come back to the crowd for more cash.
Certainly one investor who contacted us was a little miffed that the deal had been cut short 3 years early with no penalty. However those were the terms, even if you had to delve into the small print to find them.
It might be helpful if Crowdcube made the early settlement clause a little larger. Then again who ever thought Crowdcube would be helpful?
Here is a copy of the notice sent out via Crowdcube -
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Hello,
As a bondholder in Daisy Green, we have an important update about your
investment.
Daisy Green has decided to progress with early redemption of the bond,
which means you will receive the last interest payment plus your full
investment by the end of the week. Full details are outlined below by
founders of the company, Prue and Tom:
"We’ve enjoyed a great year with some real successes - from opening
Timmy Green in Victoria to being awarded three Time Out Love London awards,
to launching our Sir Peter Blake designed barges (Darcie and May Green) in
Paddington Basin. For us, being able to successfully transition from brunch
to lunch to dinner to drinks has been a real highlight and has marked a
meaningful enhancement to the Daisy Green proposition.
Financially, all of our sites are growing and contributing positively to
our profitability. We are achieving run rate revenue of approximately £7.5m
and site level profitability of £1.5m (c.20%). This represents growth of 2x
and 3x respectively since we launched the bond.
Our business has grown and developed so much over the last few years. With
your support and encouragement, we’ve had the ability to continue to push
and tweak our offering, invest in our existing sites, launch new dayparts
and acquire prime new sites.
Thank you to each of you who have offered support, provided feedback and
being such an important part of our journey so far.
In the last week, we have signed a significant debt facility with a leading
UK Bank. The facility will allow us to continue to expand Daisy Green
throughout London and represents a significant and early institutional
backing of our business which is rare amongst our peers. We have several
great Central London locations which we are very close to announcing which
will make amazing Daisy Green destinations. You will continue to be amongst
the first names invited to our opening parties!
As part of the facility, we are sadly required to repay our bonds. And
quite soon. On the 9th of December, we will repay all of your principal investment
along with your 4th interest payment. We are proud to be the first
Crowdcube bond to redeem their bonds early.
We are hugely excited about the future and we’d love for you to continue to
be a part of our growth, as customers and hopefully as investors once
again. We’re exploring options to allow you to get involved which we hope
to be able to share details on very soon.
Please continue to stay in touch and thank you once again for the huge part
you’ve played in growing Daisy Green to what it is today."
If you
have any queries, please feel free to contact prue@daisygreen.com.
Best wishes,
Crowdcube on behalf of Prue and Tom, founders of Daisy Green
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Sounds like the kind of growth that would've looked good for equity investors.
ReplyDeleteNever quite saw the point in investing in startups through a bond. Limited upside, and the downside isn't much different to equity. At least with equity, you're in there when one comes good!
And bonds are supposedly for income, yet to generate serious income requires serious money up-front. Do some of these investors find enough crowdcube bonds to spread £100k, or do they take huge risks on single bonds, or do they take a sensibly small flutter with even smaller upside?
I dont think CC have produced enough bonds to spread anything. They seem to have stopped doing them publicly. Several of the older ones are coming up to pay back time in the next year or so and do not have the money. Most CC investors dont have a clue what they doing anyway - or they wouldnt be on CC!
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