Vulpine purchased out of administration by Mango Bicycles

Vulpine has been purchased out of administration by Cotswold based Mango Bicycles. Mango, who had traded profitably since 2013, made a large loss of £280k in 2015/16 and were showing a negative balance sheet for YE March 2016.

Details of the transaction have not yet been made available. The administration is not even filed at CH as of today. It seems unlikely that the deal will leave any room for Crowdcube investors to see any money back. Hussey seems more concerned for the brand than the people who allowed him to play with it. We can only hope that for once the administrators do a thorough job and make some effort to protect the interests of the shareholders.

We were wrong - Vulpine just got a lot worse

An article in today's Sunday Times makes the Crowdcube Vulpine fiasco look a lot more serious than just poor management.

This article (google it as we cant find a link) by Oliver Shah, suggests that people in Vulpine knew things were not working before the company came to Crowdcube and raised £1m in just a week.

Investors in the previous seed round, according to the article, who had put in £1.1m, had by the Summer of 2015, become totally disillusioned with the company and the way the founder Nick Hussey and his wife were effortlessly sprinting through the money. Two of them, Philip Jenks and Simon Hulme, both experienced angel investors, resigned from the company's board. According the ST article an unnamed source stated that when Vulpine went to Crowdcube is was because they had totally run out of alternative funding avenues.

So this is where we depart from the ST piece. If what they have written is true, then it seems very clear to us that Crowdcube have failed to carry out any reasonable level of due diligence on this business, prior to promoting them as a highly successful start up on their platform and getting their investors to hand over £1m. Why did the resignations get no mention in the pitch? They are listed at CH but you have to go someway back to find them. They would be quite easily missed. Which was clearly the aim. Why were the projections allowed to be so impressive when it was already clear the business model did not work? 

Crowdcube, as ever the clowns, have trotted out their usual pathetic, amateurish apology. Surely they are not going to get away with this yet again, not after the similar debacle with The Solar Cloth Company? You really cannot be serious!! 

Crowdcube's Vulpine crashes out

Vulpine raised over £1m on Crowdcube at the end of 2015. They have now decided to call it a day. A recent attempt to raise more cash on Crowdcube flopped and you have to ask why they didnt take a reality check and lower their ludicrous valuation. Too late now.

It's what happens when you get on the Crowdcube merry go round; high valuations lead to higher ones, as the platform doesnt do down rounds. The public are not that stupid. 

We have written about these guys before - http://fantasyequitycrowdfunding.blogspot.co.uk/search?q=+vulpine on here. Nothing wrong with the product but zero business sense. We called this in 2015.

Left to their own devices and growing slowly they may well have made a good living for the founders. Get scaling up wrong and there is trouble. They got it horribly wrong. 

So in little more than 12 months, they have blown £1m and their business, apart.

In their £1m raise, they had only asked for £500k - so they have managed to deliver nothing with twice the money. The usual Crowdcube projections showed £500k profits on £4m plus turnover for this year. 

In other news Crowdcube claim to have had a record first quarter for 2017 - you may have tripped up over the countless press releases out there. I suppose that interpretation depends on what date you use - the completed campaign dates or the when the money gets to the businesses' accounts. Either way what they should be doing is leaving aside their incessant self grooming and telling us why they think a company like Vulpine has been such a disaster. Then we might get somewhere.

Oh Vulpine.

Vulpine make cycling clothes. A year ago they raised over £1m on Crowdcube at a £6m valuation. Having now missed all of their targets, they are back for more.

What the new pitch doesnt tell you is the gap between what this company tells you it will do and what it actually does. Its rather large. Lets take a look.

The new projected turnover for 16/17 according to the company is £1.3m. It was supposed to be £2.5m.

The new projected loss for 16/17 is £(445k). It was supposed to be a profit of £242k.

Of course this round is at a higher valuation than last years - based on the extra losses and lower turnovers. Makes perfect sense.

Hell these guys missed last years projections by miles as well, so you sort of expected as much. What wasnt in the projections was this new funding round - there were no new funding rounds.

There are reasons - the wholesale didnt really work so they are now into ecommerce. Maybe that could have been worked out beforehand?

There is an excellent Q on the Vulpine Forum on CC about the effect their almost permanent discounting is having on their GPM and more importantly the inflation of their headline online sales growth. Look, anyone can produce 200% annual sales growth by cutting the RRP drastically but that doesnt mean you can sustain it if you want to be making a profit at some stage. It is, we continue to argue, where the way Crowdcube allow companies to phrase their figures. is highly misleading. This guy clearly knows his onions.  

Now you know, you can all jump in fully informed.

Unfortunately it rather dampens Crowdcube's genuinely good news story - to follow. Still my mother always said there was the exception that proved the rule.

NEWS - This pitch has now been pulled - as noted in a comment below - thanks. At last the crowd is beginning to ask some pertinent questions - Crowdcube are having a very bad April. Look guys, you need to be more selective in the businesses you put on your site. You need to cover off the due diligence with real diligence and you need to take a far more active interest in what happens to companies after they have funded with you. Cut the PR and do some real work OR you are toast in 12 months. 

Crowdcube's Vulpine success heads rapidly downhill.

Vulpine raised over £1m on Crowdcube in 2015. The pitch was a massive success; more than doubling its £500k target.

This blog was sent a couple of messages last year stating that the company was in trouble - we wrote about it here

Well the accounts to YE April 2016 are now in.

In the Crowdcube projections the company showed a small loss of £224k for the year. In reality the company has filed a loss of £770k - or more than 3 times the 'projection'. Remember this projection was made during that financial year, so you have to wonder if it was a legitimate attempt or something else.

Add to this, the fact that 6 Directors resigned in 2016 and it does look as though the wheels have come off.

Part of the Vulpine message sent to shareholders in June 2016 read -

After considerable first time orders were placed By Evans Cycles for the first year of HOY Vulpine, on an exclusive basis, we had predicted growth of HOY Vulpine wholesale. Unfortunately our estimates coincided with a cycling clothing downturn across all the industry, from top to bottom. A new buying team at Evans are buying extremely cautiously, and are supporting their in-house brands where they have the greatest margin, so 2016 orders did not materialise, after the superb start to HOY Vulpine last year.

A warning that we have banged on about here since we started blogging. A warning that the likes of Righteous and Cauli Rice have failed to heed - new listings do no guarantee consistent new business. Warning lights are flashing.

The Hoy range, which was the big up in the Crowdcube pitch, is longer on their website. 

What's happened at Vulpine?

Vulpine raised over £1m on Crowdcube at a valuation of over £6m.

A little birdy has told us that the projections may now have turned out to be wildly optimistic.

Unfortunately we cant go any further as we cant verify the information  - so is there anyone out there who wishes to tell us what is going on??

We have had a second very odd message which is about Vulpine  - odder than the guy above even. But again totally unverifiable. Anyone out there with information??

Why the numbers matter

Vulpine is a new ECF pitch on Crowdcube - looking to raise £500k for 9%, so a healthy valuation for a company with only losses to show.

Nothing wrong that we can see with the product, with the market and with the potential - valuation aside.

However when companies try to raise money they really should understand the basic mechanics of business. We dont think Vulpine do.

For starters, take a look at their balance sheet and projections. Stock holding figures often give clues.

At YE 2013/14, the company had stock totalling £600,000 on its books in a year when it turned over £416k. This was up from £230k the previous year. The 2014/15 figure was £365k for turnover of £995k on a GPM of 31%. The projected stock holding for 2016-17 when the turnover is £2.5m is only £580k so not even as high as 13/14.

This is a fashion based business and they seem to be struggling to get rid of their old stock, which will impact new lines and cash flow. Poor buying - as the 2013/14 figures imply results in a quick death.

Another oddity is the fact that they state they have sales of their new Hoy brand of £335k for this its first year. Yet the total turnover for the whole business for 2015/16 (YE April 16) is only £1.35m or just about £350k above 2014/15. So the 'old' stock had a flat sales year which is not exactly encouraging.

Yet another strange figure is the accounts receivable for an online retailer - projected to stand at £275k for this year. Last year it was £32k and year before was £35k - more in line with what you would expect. The follwoing two years project receivables to be in the £80ks - so a very inconsistant picture. Dead stock can suffocate a business like this very quickly.

Variations in the GPM may be explained by stock dumping but if this is a regular need then the GPM growth from 31% to 53% seems very ambitious.

So you see the numbers do matter and if a business has either no clue what they are or has misunderstood how important they are, they can hardly expect investment.