This is a first for the failing Crowdcube platform - their first bond issuer to go bust taking with it £665k of investors cash.
We warned you all about this happening when they were raising the money - when will you listen?
There are no details at CH but this article confirms the collapse - https://www.birminghammail.co.uk/whats-on/food-drink-news/square-pie-grand-central-closed-14260512
So days after we published a warning about the health of the other major bond raisers, what we thought and what Crowdcube told everyone wasnt possible, has happened.
What a total shambles. This comes at a time when the PR mania coming out of the Crowdcube office has been geared up. That's embarrassing. Square Pie ran 6 units, 5 of them were loss making. Was that in the bond offer documents?
We will bring you more on this once the documents are filed at CH. Looks like the simply ran out of cash and had had cash issues for a while. Long enough maybe to make the Crowdcube bond a scam? KPMG are in charge of the mess - is that a good thing?
According to Crowdcube's pitch at the time: "**UPDATE** - Square Pie has been given a Probability of Default (POD) of 0.7% by Moody’s Analytics tool based on historic accounts. This compares to 3.3% average for the bonds listed on Crowdcube so far."
ReplyDeleteHehe, yes and I hear they save costs as the pigs for the pies fly into the abattoir themselves. 70% of default more like,,,,,,Completely absurd that anyone would lend money to this company or any small growth stock.
ReplyDeleteMind you, reviewing the Crowdcube prospectus, it does sound very compelling and safe.
The bond holders therefore now have the right, if the loan was secured to set in and takeover the company......what a complete mess.
While Crowdcube burns through 7 million a year, its client companies must be going through circa 80 Million.
What a complete and diabolical waste - neither Luke or Darren have any experience in finance - they have not got a clue what they are doing - this needs to stop.
Crowdcube is only a marginal and moral improvement over the boiler rooms and scammers of old.
The only difference is funds are channelled into legitimate support businesses as opposed to party activities of the scammers.
I suppose at least the spend is gdp positive for the country and is not fritted away overseas.
MADNESS
Not sure it is GDP positive given the loss of money and tax incentives. Wait for the documents but these cases are rarely anything other than a whole for HMRC.
DeleteI remember the first one opening in Spitalfields years ago when the competition was greasy fish and chips and dodgy curry in polystyrene boxes. The street food revolution left them completely behind and that's been clear for years. They had a pretty good run for a while but surely people should have been questioning why a business with a 15 year successful track record needed to raise quite modest amounts of money from crowdfunding - maybe the benefit of hindsight but looks more like a rescue than a growth raise, which is clearly not how it was sold.
ReplyDeleteAnother success of Nicolas Horlick .. She invested in the company according to this https://www.thecaterer.com/articles/350089/new-investment-secured-for-square-pie
ReplyDeleteAlthough further research shows Sq Pie all over the IW website - content now removed. Not on SH list ??
DeleteJust had a letter from the insolvency practioners around the liquidation proceedings. My guess as bond holders we will get nothing right?
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