3 companies funded via equity crowdfunding close in one day

Crumpet Cashmere, Upper St and MRC Bartending have all raised money via equity crowdfunding and as of today have all ceased to trade. They join the growing list of failed businesses that have used this form of funding.

Crowdcube, Seedrs and Bank to the Future were their respective platforms. But the real question is will any of them tell the true story behind these failures?

We doubt it.

UPDATE 27 Jan 2016 - MRC Bartending has now brought itc Co back to life - it hasd been struck off. Odd though that the new AR01 has no shareholders listed at all!!

Is this real evidence of the sort of fraud that ECf platforms get up to?

CrowdProperty pitched on the ECf platform Bank to the Future back in 2014. This platform has since been forced to go off shore as no one here would issue it with an FCA licence. Its founder Simon Dixon has been known to us as a conman for the last 4 years. He was elected to the board of the UKCFA, the 'body' established by Julia Groves which is supposed to be the representative body for the industry. Enough said.

So the platform claimed to have raised £171k for the company, the company agreed that this is what was raised and as it was over the £150k target, the pitch completed.

We suspected at the time that something wasnt quite right when the pitch suddenly received an investment of £100k on its last day - without which it would have failed. However it has taken till now, a year and half later, to confirm our suspicions.

CrowdProperty's first accounts were filed a few days ago and the shareholders paid in capital total is only £114k of which £10k seems to be prior to the pitch. It never crossed its target line

So what has happened to the rest of the £67k. We suspect that it never existed - it was 'pledged' and then withdrawn just to ensure the pitch got over its target and could complete. If so, then this must have been pledged by people who had a vested interest in it completing and who knew it could be withdrawn before shares were issued. Meanwhile the real investors, who had really invested real money were none the wiser.

This appears to us to be the first instance of what we suspect is a not uncommon ploy used by the ECF platforms to essentially con people. It is difficult to trace and to verify which is perfect if you trying it on. So beware.

Bank to the Future are still peddling this nonsense - 
https://bnktothefuture.com/pitches/2079/_first-v1sion-the-sports-broadcasting-revolution-with-andres-iniesta-and-serge-ibaka

When will the FCA take a stance on conmen? The pitch had run it course and failed to raise the money. So the platform just extended the pitch for another 3 months. What is the point in putting a time on it? When in 3 months it has still failed, they will extend it again - unless the FCA get off their behinds. It makes you wonder if this Spanish business is for real when they seem to have an unlimited time to raise their finance. We know Bank to the Future is a con.

SSAS and SIPP - BEWARE

Crowdproperty.com have sent us two emails about their new crowdfunding property investment business. We came across this company when they pitched for funding on Bank to the Future - alarm bells ringing already.

The first email started out - ''Did you know that if you made your money work at 10% you would double your money in less than 7.5 years and quadruple in fewer than 15?''

In fact most people will realise that to double your money at 10%  it will take 10 years at a flat rate return. They offer a flat rate return. Quadrupling it would take 40 years and so on.

The latest sales pitch email arrived a few days ago. Now they are claiming - '' CrowdProperty has also been approved for SIPP & SSAS pension investments. If you would like to know more about this please visit us at www.crowdproperty.com and fill in the form on the pensions page to receive further information on how.''

Their website has no such approval and an email asking them to confirm just how they have this approval has gone unanswered.  Our research shows that all but commercial property is liable to heavy taxation if put through either scheme. 

So please, be careful out their. 

FCA - Financial Clowns Association

We have been in correspondence with the FCA about a website offering financial promotions in the UK contrary to the Financial Services Act 2000.

We posted the first response we had here a week or so ago. We then sent the FCA more information and explained in as simple a way as possible that they had got the wrong end of the stick. They must like that end because they still have it.

The site in question is Simon Dixon's Bank to the Future. This was authorised via third parties by the FCA in 2012 and 2013. This is when the site was run by Bnktothefuture.com, a UK registered company.

The BTTF site now operating is run by Bnk to the Future - a company registered in the Cayman Island and Honk Kong. Simon Dixon now resides in Hong Kong, leaving the UK with a number of small business owners chasing him for refunds. 

The FCA seem unable to grasp the difference between these companies. Their own register states that Bnktothefuture (UK) was FCA accredited until October 2013 - this then ceased it states. It is not accredited any longer. The FCA claim that it is accredited via a company called Crowe Clark Whitehill. Their very own register states this is not the case. And even if it was, which it is not, then the current site is not run by the BTTF which had accreditation in 2013. Without some form of FCA accreditation the site is not allowed to promote the financial deal it has on its site, in the UK.

So what are the FCA playing at? We may never find out as they tell us that if they take action against the site, they cannot tell us what that will be. So we have to ask what is the point in the public helping them to do their job. Well as with all clown shows, if the audience doesn't get involved, the whole thing falls flat on its face.....................pause...............hahahahahahahahahaha.

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.

Are the FCA up to the job?

What are we to expect of the new financial regulator in the UK - The FCA?

A good level of basic competence must be a given. If we want them to prevent the type of fiasco that helped cause the 2008 crash, we need them to be at least awake on the job.

Late last week we sent a notification to them that a website was offering financial promotions without FCA approval. This is in most circumstances contrary to the Financial Services and Markets Act 2000. It was in this case.

The reply we had is copied below

After reviewing the firms website, I can inform you that there are circumstances where unauthorised persons are communicating financial promotions to clients in the UK which will be governed by the financial promotions order under section 21 of the Financial Services and Markets Act 2000 (the Act).

Section 21 (2) of the Act sets out the circumstances in which an unauthorised person can communicate financial promotions as set out in our handbook in PERG 8.9.1.

This is on the basis that the information has been checked and approved by an authorised person. 

If you have evidence that this is not the case you should let me know and I will refer it to the appropriate team within the FCA.

The firms website seems to indicate that their financial promotion has been approved by Crowe Clarke Whitehall.

Firstly this reply gets the name of FCA approval firm completely wrong - it should be Crowe Clark Whitehill. The company mentioned in the reply does not exist.

Secondly Crowe Clark Whitehill has not approved this site's promotion. They did approve a promotion by a company with the same name in 2012, as the current site now rather sneakily points out. This was under a different set of rules as set out by the then FSA (now the FCA). Since then the site has changed and is now run by a company of the same name, incorporated in the Cayman Islands and run out of London. It has no approval from any UK authorised FCA accredited company - according to the FCA Register. This is why we sent the notification to the FCA in the first instance.

All the information is on the FCA's own register so it shouldnt have been too difficult to check it. Clearly for this particular employee, it was.

It doesnt bode too well for the future if they cant get something this simple right. 

Bank to the Future 2 and 3

Bank to Future website is now active again - well it has one pitch from Spanish company First Vision. BTTF is now a HK registered company and a Cayman Islands regulated company. Is their such regulation? The UK version seems to be forgotten. On the site it states that it takes people's security very seriously. So how is it selling ECF in the UK without a current FCA license?

The site sneakily refers to a FCA proxy licence it had through Crowe Clark Whitehill in 2012 - for a different site by the same name. Checking the FCA Register, BTTF had two different proxy licences in 2013 both for just a few months. Since then they have had no FCA accreditation. Its a simple lie as this current BTTF site is run by a company in the Cayman Islands, not one registered in the UK. See our post on the FCA to find out what they are doing about this!!

How many sequels did the film get away with?

One assumes this might have something to do with the UK not giving BTTF a Banking Licence as per this ridiculous article by Cap Gemini -
http://www.capgemini-consulting.com/blog/ompi-blog/2014/09/crowdfunding-bank-to-the-future

Rumour is that Dixon and his family have moved to Hong Kong - owing many small self employed business people in the UK thousands of pounds. BTTF were taking money up front from them for their 'incubator' programme before they launched pitches on the BTTF site. These pitches were never launched as the site went dark but Dixon kept the money and legged it.

Bank to the Future Bitcoin, which has never traded, has been closed.

The case of Betpilot, Bank to the Future and shares or no shares. When is a lie the truth?

On the Bank to the Future website http://www.banktothefuture.com/, like most ECF sites, they have a list of completed pitches. This 'success' list helps show the general public that this site is active and worth taking a look at. It really does the business.

Sometime ago we copied this list off BTTF. On it, it had a company called Red Leader Ltd who were raising money for their new gadget Betpilot. The
company was incorporated in February 2013 and shortly afterwards launched its pitch on BTTF to raise £150,000 for 30%.

The 'Pitch Funded' listing for Betpilot (Red Leader Ltd) states that it successfully raised 29% of its target or £43,500.

Looking at the company now, this is hard to believe. There is only one shareholder and no new shares have ever been issued. The company has never filed any accounts and is now in the process of being struck off. As far as we can see it never traded.

This pitch was, according to the BTTF platform, eligible for SEIS - ie 50% of that money could be claimed back by investors on their annual tax return. We know from carrying out this procedure that HMRC do not bother to check or ask for any documents to verify the investment - you just tick a box and deduct the money from your total tax bill. 

So where did the money go, did it ever exist, is the BTTF site making false claims? What if anything was claimed back via SEIS tax relief? The only return by the company confirms only one shareholder.

This would appear to be the very tip of the iceberg.

What is almost amusing is that Simon Dixon, who is in sole charge of running BTTF, appeared a few days ago in the FT building at the behest of the FT, to deliver a talk on the future of Banking. God help us.

Bank to the Future, Simon Dixon, Laalaa,Tinky Winky and Vince

The UK Crowdfunding Association (UKCFA) had as its founding member one Simon Dixon. Simon was the inspiration behind the creation of Bank to the Future - a Crowdfunding platform which, if you believe the PR, was the world's next big thing.

Simon is an interesting character. An author of various books on new banking, he has made a variety of claims about his past which belong in the land of the Teletubbies. Simon used to appear on Wiki as an investment banker until they were asked to check  - this was then removed. He has never been an IB - he may have worked for a few months in KBC Peel as a trainee but he has never done the enormous international deals his CV claims. His past businesses have either never traded and closed or gone bust having conned students who wanted to get in to the City. He claims to have resigned from Peels after 6 months as a trainee but stories abound about some missing money. Likewise his site, Bank to the Future has not raised the money it claimed at one stage - these claims have now been removed as has the site which is just a holding screen. He is a brilliant self publicist and the internet is his friend. However nearly all of his claims are simply not true.

We know all this because we looked at one of the companies that was pitching on his site. It turned out to be highly dubious and has since closed but not before raising money on the site - IQden for those interested. Another company that completed a £75,000 raise (it was originally £150,000 but was reduced to get it over the line) seems to have vanished - IMD Europe. IMD Global are based in Canada and do not have any EU operation, yet the logo, product and material in the pitch are identical. Ted Leavitt who ran the pitch, is sole director of IMD Health Ltd which seems to have benefited from the raise but has since done
nothing.

Last year Simon Dixon appeared on a business platform alongside Vince Cable. The video that Simon later cropped as only he can, shows him almost alone with VC in a heavy one on one, where VC is agreeing with all of SD's input. Has VC got early onset Alzheimers? How can he be so easily used to promote such a devious and manipulative set up?  Mind you Richard Branson also endorsed Bank to the Future and Simon still has his pic full frontal on what is left of the site. That beard!

One of Dixon's older claims to real status is that Peter Hargreaves (AKA multi millionaire) invested in his company Benedix Investments Ltd. This is the one he set up after he left the big smoke, which was so ridiculed by the very students it purported to help . Checking CH records reveals that a Peter Hargreeves owned 100 shares in the company which had £400 paid up SC. Possible typo? Benedix went bust.

UKCFA have recently removed Simon Dixon from their board - he resigned apparently. Bank to the Future no longer has FCA accreditation; it seems incredible to us that it did for over a year. So maybe this will be the end of Dixon's fantasy career - somehow we doubt it.