Newgalexy break into profit - against the Crowdcube tide.

At last, some good news - well relatively. NewGalexy, now Contractpod Technologies, have shown their first profit - a magnificent £50k. Unfortunately, the Crowdcube projections showed them with a £2.6m profit last year, so we shouldnt get too excited. 

But hey, it's not another whopping loss and it means things are moving, albeit at snails pace, in the right direction.

So a cautious hats off to NewGalexy.

Seven Bros Brewery fails to meet its Crowdcube promises

Glass half full or half empty, you still need to make a business deliver. Seven Bros Brewery on the merry bandwagon of the craft ale explosion, persuaded Crowdcube investors to part with £200k in 2016. The first real results since, show the company is either way off track or has taken a different line.

Its a familiar tale but not one we ever make up. This brewery showed investors a 5 times increase in turnover from 16 to 17, resulting in a handsome profit for 17 of £260k. These accounts show a loss of £60k fro the year, with a low level of activity. 

Sales have to pick up or more money will be requested. This sector sure is getting crowded!

Righteous continues to make losses and is now in deficit.

Righteous raised twice on Crowdcube. They promised the earth and delivered nout. Jam tomorrow contracts that disappeared and sales figures that were mere dreams have left this once Crowdcube sensation, in ruins. 

Well that is one way of looking at it. Alternatively you could say that the couple who worked their socks off to make this venture go, had their heads turned at a crucial juncture by another venture, now called Full Green aka Cauli Rice. No doubt about their work ethic but there has to be considerable doubt about their ability. 

At a crucial time for Righteous, they decided to set up this new venture. Full Green is trading but has not got close to the promises made.....yet. Expansion in the US is critical.

Back to Righteous. Whats next? Closure most likely or a fire sale. Shareholders were at least given the option to exchange their shares for ones in Full Green - which is an honest and decent approach you dont see very often in this space. 

So whats happened at Energie Corp since its Crowdcube success in 2016?

Energie Corp run cheap fitness clubs and are well versed in the dark arts of franchising. They took £630k off Crowdcube investors in 2016. Spectacular growth forecasts where backed up with impressive opening schedules and unit numbers to match. 

Since then, the company has launched a rebranding of its Fit4less name and gone for Energie, with a cheeky little french twist. Reviews of the sites are not good.

What is curious is that the Crowdcube FCA verified section of the pitch in 2016 said this - 

Our track record

Over the past 13 years, énergie has built a fitness network spanning England, Wales, Scotland, Ireland, Latvia & Poland with 93 clubs trading, a membership of over 110,000 & network turnover of c£26m. Our key achievements to date include:

• UK Market leader in fitness club franchising and third largest fitness brand measured by clubs trading
• Over 150 franchises secured, 93 clubs trading, 31 in the current pipeline for opening and new franchisees coming on board at a rate of 40 per year and growing
• Largest fitness club operator in Ireland, with 12 clubs and c. 21,000 members
• Multi-award winning brand in both the fitness & franchising sectors, including wins & finalist positions in the UK Active Flame Awards, HCM Members Choice Awards & BFA Franchise Awards.  
• Demonstrated transportability of our brands with with 21 clubs across four countries outside of England & Wales

The latest filed accounts, with accompanying statement full of how well they are doing,  said that they had 11 clubs in Ireland, one has been lost in the mists, 6 in Scotland and 1 club in Poland. A total of 18 which means they have lost 3 from the 21 declared above. By the end of the year, they state that they had 88 clubs across all of their networks. 

Now either I have gone potty and all of you are sane or vice versa. I read this as a considerable fall in the number of clubs operating since Crowdcube allowed statements on their platform giving the number as 93 with another 31 in the pipeline in 2016. So by now a minimum of 124 - not the 88 in the accounts. That is some difference. Other numbers on the Crowdcube platform also make it look as though things have not gone to plan.  

In a similar vein the accounts show further losses where the projections showed a healthy downward dog style profit of £630k. Ruff. 

Crowdcube - helping to make the impossible unattainable, using Government backed tax breaks.  

Basic dishonesty is the new truth - Rise Art mislead investors on Crowdcube.

Rise Art appeared first on Crowdcube in 2016. They raised £516k. Now they are back again raising over £650k in a campaign that is on the edge of being successful. So well done. Valuation just under £10m.

This is a comment on the standards of disclosure on Crowdcube rather than any comment on whether this company has a chance or not.

When asked a direct Q about how the business had performed compared to their 2016 projections, the waffle that follows defies description. Glowing reports of doubling turnover year on year does not tell the truth guys. Your projections showed turnover go from £518k to £2.26m, 2016 to 2017 and then from £2.26m to over £9m 2017 to 2018. The 2017 and 2018 numbers showed profits and the 2018 profit was over £5m. So what really went wrong?

Actual turnover (and this is presented throughout the pitch as a triumph) went from ~£500k in 2016 to just over £1m in 2017. So around 50% of the projection. There have only been large losses. So the projections were total nonsense. But when asked, they fail to admit this or in fact even refer to it - despite the directness of the Q demanding that they do so. 

What is the point in producing this rubbish? No idea. Why do people believe anything these guys say - havent a clue. How can sensible people invest in this  - totally baffled. 

Crowdcube  - Defying Logic. 

Where will it end? Crowdcube congratulate bereaved shareholders in MyShowcase.

Myshowcase raised £1m on Crowdcube not long ago and has now been 'sold' to another company for a large loss to investors. So Crowdcube thought it would be good idea to send a cheerful message to the Wake; ignoring the death.  We have written about this company here. It seems there is just one button for outgoing news on the Crowdcube control panel - its the marked ''Congratulations''. The outcome of the investment seems to be irrelevant - which when you think about it, is spot on. We love the references to EIS and SEIS - DUH.  Here is the message -  Congratulations! Your investment in MyShowcase has been completed and your ownership statement is now available.

On behalf of Crowdcube and the team at MyShowcase, thank you for supporting this business on Crowdcube. If you are eligible for SEIS and EIS tax relief (which will depend on the Company being eligible and your individual circumstances) you can expect to receive your tax relief form within 8-12 weeks of your certificate being sent. Please ................. and note that the availability of tax relief may change in future.

Best wishes, The Crowdcube Team Time for Bed  - too much good news is so tiring.

Looking like an Entrepreneur.

There is a look - the look of the entrepreneur. It is hard to define - a crystal-clear and steely-strong look, that comes with a calmness and a fathomless confidence. It's not bravado, it's not ego - it is the antithesis of both. But when you see it, it is worth recognising. 

I have just spent sometime meeting clients in London. After day two it suddenly struck me, as I was flicking back through the meetings flahbacks,  that all of these people had a similarity - they had that look. It is one I remember encountering first back in 1985 when I ventured out into the world of start ups. But I didnt recognise it then. It's unmistakable but hard to define and it cannot be simulated. I suppose my best attempt would be to describe it as like the perfectly still rock pool. Clear, calm, deep and powerful. Even after the wind removes the image, the calmness returns time and time again. It is immutable.

This is something you cannot recognise unless you meet someone face to face. Video doesnt carry it. A group meeting doesnt always reveal it. Eye to eye, one on one, close contact, is the only way. It bears no relation to physical looks, although it is clearly present in demeanour and presentation. It strikes you within a minute of meeting - or it is not present. Without that look, the chances of a start up succeeding on a scale that makes an investment worthwhile, is pure chance, with the odds stacked against it.

To make sense of this where we are now in the altfi world, you have to realise that most ECF investment is raised without any attempt to see if this look exists. When the wind blows and the look is disturbed - it doesnt return and your investment is lost.

When Crowdcube for example use referrals as a major source of new campaigns - handing over around 2% of their stated 7% commission to the referer, you can see why the platform is so chockablock with rubbish. People who work at CC, in senior management roles, are not experienced enough to know the look. How could they be, when they have had just a couple of 16 month jobs with the likes of Virgin Start Up. Misusing the Branson look is not helpful. Yet Virgin Start Up are one of CC's main referers. You can see the problem.

We can do so much better.