Daisy Green back on Crowdcube with the same old misinformation as always

Despite their best efforts to make you believe the contrary, Daisy Green are not anywhere close to their 2015 Crowdcube Bond projections. Of course they dont tell you that now.

It is the same old same old and it always gets the same reaction. Daisy Green have already burst through their fake funding target of £500k and had exceeded £1m before it went public. That looks like a huge success at a valuation of £18m.

But if you look a little closer, cracks appear. The company projected years 2015, 2016, 2017 and 2018 would all be profitable  - they were not (2018 is still unknown). So the 2015 figures given in the Crowdcube pitch were historic and showed a profit of around £40k. The company actually made a loss when these accounts were filed. This fudge is now so common on Crowdcube I suppose it is the norm - but it shouldnt be. 

Losses for year ending April 2017 were ~£500k. The company sold its bond to Crowdcube investors with a 2017 profit of £300k. Hey so what! Well the point here isnt the gap but its the complete lack of recognition that it exists.

One other trick they try and lay out in this new pitch is the mirage that they paid off this Crowdcube Bond early, out of profits. They didnt. Of course they dont claim they did but the way it's worded, as some sort of huge success - paying it off 2 years early - makes it appear like it is. In fact they had to borrow (at a better rate) to pay it off - thereby stitching up Crowdcube investors who expected another 2 years of interest. 

As always on Crowdcube, things are not what they seem. The company may go on to some success but I just hate the way this information has yet again been manipulated in order to obtain more money. Where is the integrity?

Looking over their figures they have been manipulated to make a best case and they totally ignore key numbers that would give investors a true picture of the situation. But then investors really should be looking for these numbers anyway. 

For me this has a similar ring to it as Sugru did. Asked why they are now selling equity when they repaid the bond early, the answer from Daisy is less than convincing. What if, as in the Sugru case, the bank loan Daisy has is under pressure (£500k loss last year is not what was planned). You have seen it once, well this might be a repeat. Worth asking before you throw your cash at it. 

Daisy Green pursue early delivery policy on their Crowdcube bond issue

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 - 

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