Is Crowdfunder struggling?

Crowdfunder were due to make very large profits for YE December 2018. The last filed accounts for the 3 months to December 2017 show a loss of £360k - for just 3 months or did we mention that  already.

Crowdfunder operates in a crowded space with several major players  - Kickstarter and Indiegogo being two of them. They have so far failed to live up to their own projections. But if you knew that Darren Westlake was a director of Crowdfunder, you might not find that so surprising. It's the reason we chose Indiegogo for our recent successful ECf.Buzz campaign.

Crowdfunder has so far raised £2.92m on Crowdcube in three rounds in 2014/15 and 17. Do you think they pay the full 8% commission? The company has accumulated losses to YE Dec17 of £2.357m. Seems that the business model is similar to Crowdcube's.

We wait to see what YE Dec18 delivers.

You simply cannot believe a thing you are told in the Press.

A tweeted article on The People's Energy Co caught my attention. The company had raised £500k from 2000 pledgers on Crowdfunder, a rewards based platform, in July 2017. The article stated that the company was to repay crowdfunders earlier than expected. How fantastic I thought.

The tweet was from a well recognised and very well regarded journalist. It linked me in as if to say here is an example of a CF success.

Here is the article - https://www.insider.co.uk/news/peoples-energy-begin-repay-crowdfunders-13700660

The reason I double checked the information is that Insider rarely get things right  - they just print press releases. No change in this case.

PEC gave away as rewards for pledges a varying amount of free energy. This giveaway was to be triggered by the company reaching 20k customers. In the pitch, completed in July 2017, they state this will be in 12 to 18 months time. So we are now on month 17 - so certainly not early. However this dividend, as the article calls it, is only going to 500 of the 2000 pledgers - so the all the others will be getting theirs late. If they get theirs.

And it is not a dividend as the article erroneously states. It is a part of the Crowdfunder contract. It is a reward for giving the company money in 2017. Nothing to do with equity or dividends. It is due. Already purchased. Non delivery of which would be a breach of their contract with pledgers. If you like, it's like pre purchasing a book before it has been written and then hearing that the company has written the book but only published 25% of number that they owe to people. Hardly encouraging news.  

So this Insider article is totally misleading. The company, which claims it is standing up for consumers and is better than all the other major suppliers because it can be trusted, stated the following in the article -

''Originally, we hoped to start our first pay-out by March 2019 but business has been so strong that we are able to honour the pledge earlier than that, which is fantastic.

“People are fed up with being taken for a ride by large corporates, and they have lost trust in their energy suppliers.  We have set out to restore trust, by ensuring that in everything we do, we act fairly and responsibly, doing the right thing for the people and the planet.”

Well, March is not within the 12-18 month stated by the company on Crowdfunder; it is 20 months out - close but not in. So how can you trust a company that doesnt tell the truth? Im fed up with poor journalism and the incredible volume of inaccurate information that the internet allows to land on our desks. 

Crowdfunder borrows from Crowdcube

Crowdfunder, a UK based version of Kickstarter, largely for creatives, has raised almost £2m on Crowdcube in two tranches. Now Crowdcube are loaning them money.

In what is a bizarre development, Crowdcube have signed a loan agreement with Crowdfunder - amount unknown. Darren Westlake, one of the founders of Crowdcube is a director of Crowdfunder.

This loan was not in the financials when they raised £1.3m just over 12 months ago. So it wasnt planned. Accounts are due out in June. Accumulated losses filed so far amount to £610k. 

Crowdcube, despite what their PR says, are not generating net cash. At their average commission rate of 5%, they need to be raising around £160m each year just to pay their current costs of £8m pa. They are currently nowhere near to this with a disastrous April. If they break £100m we would be surprised. 

So what's the deal?

We have no idea. Crowdfunders' world is so separate to Crowdcube's we can see no synergy. Crowdfunders platform is currently plagued with SNP MPs trying to raise election funds. Hardly what Crowdcube investors are likely to be keen on and not exactly creative. Crowdfunders was due to have ample cash at this stage according to the Crowdcube projections and that was on raising only £1m 14 months ago. Seemingly, that projection was wrong. 

Any clues let us know.

Crowdfunder claim to be ahead of projections as they raise more on Crowdcube

Crowdfunder have lust launched what looks like being a successful pitch on Crowdcube for £1m,; valuing the company at £20m or 20 million times net profit. If all goes to plan they hope to double your money in 3 years which given the risks seems a little pathetic to us.

They may well be only the second Crowdcube pitch to return for more cash with the initial projections satisfied - which would be a fine achievement.

We do however have one major issue with the way this and many other Crowdcube pitches present their information. Their YE is September but projections run Jan to Dec, for no good reason we can see. To make this more confusing a small italic note states Forecast begins Oct 15. Glad they cleared that up for us.

These projections show the past 12 months (we assume this is Jan 2015 to Jan 2016 but who really knows) with a balance sheet that has an accrued profit (loss) of £(344,527). If you check the last filed accounts at CH the recorded accrued loss is £(495,417) for YE Sept 2014. So you would expect the company to have made a profit of at least the difference in those months. They declare in the Crowdcube pitch that they made a loss of £45k for YE Oct 2015 (or this might be to Dec 2015?). So you might well ask how does the balance sheet show a figure so far away from the one that it should.

We have not got a clue, but any answers would be helpful. The company may well be on a winning run and you may invest and get your money doubled as they predict but surely it would help if we had all the information in a format that made some sense.