Not time to hoist the mainsail just yet. Discovery Yacht Group disappoints.

DYG raised £2.21m on Crowdcube in January 2018. Recently filed accounts for year ending August 18 show a loss of £700k. This is against a substantial projected profit for the year as shown in the Crowdcube pitch. 

Too early to be calling for the lifeboats but from these accounts trading looks a little thin - trade debtors of only £1,664, when the accounts take in the main part of the peak summer trade. They have raised more money since so there is no chance of drying out.

Projected profits for the year now closing are huge.

There are large sums being exchanged intra group and between directors which always makes me nervous. But plenty of time to trim the sails and make everything ship shape. Shareholders' views welcome. 

Bring on the Clowns.

This is another fine mess. Celo raised £148k on Crowdcube in July 2018 - company name Artis FS Ltd. The filing at CH confirms the transaction in shares. But the accounts for YE August 2018 state the company is dormant with just £100 on balance. No notes. 

One of the two founders has left his post and the latest shareholder list (with updates) dated August 18 has no mention of anyone other than the two founders. 

The 'website' has a button to take you to early access which is a dead end. Its 'Careers' button takes you 3 FT tech job vacancies in Chennai India and 'Investors' takes you to confirmation of the Crowdcube raise. That's it. Celo is also a totally separate company offering services to medical professionals and another separate US based financial services app.

A helpful article dates April 18 https://www.businesscloud.co.uk/news/insurtech-start-up-crowdfunding-to-disrupt-the-industry in which the founders are described in the first line as Tech Entrepreneurs, says that the full open beta will be available by August 2018. No sign of it in June 2019. 

So now we have cleared that up for, lets get on with the real slap stick. Oh no we wont!

Eprop investors are the latest Crowd to lose out.

Easy Property raised £1.36m from 376 investors on Crowdcube in 2014. The company, also known as Eprop, was valued then at £60m. 

After going nowhere, they did a deal with another group also going nowhere. The result has been a forced sale to Tosca Aquisition, who have paid a pittance at £17.85m. Crowdcube investors have lost out again. Although technically this business has been sold rather than dissolved so we are sure it will get their approval. After EIS and loss relief some investors might even break even.......doesnt that tell you something about how stupid we are being.

I would say that punting out Eprop at £60m in £2014 could be classified as highly misleading. Clearly today's value would confirm that. So FCA, what would you say?

Look guys you are really making this far too easy for us. We yet again predicted this mess here . Our members will be able to benefit from our knowledge and your investors will no longer put up this sort of thing. Let me know when you come to your senses and want some advice.

Spending £48 a year on ECF.Buzz, to avoid losing many hundreds, is looking increasingly like plain common sense.  

A Wee Cracker from Seedrs

Below is an email sent to the recent Seedrs investors in SkinnyBrands. It speaks for itself. We think that this sort of thing needs to stop. We hope ECF.Buzz will help this. 

As explanation, SkinnyBrands raised over £400k on Seedrs in February 19. Valuation pre money of £10m. Three months later they have sold 37.5% of the company at a pre money valuation of less than £900k. It is almost impossible to know this and read the email below without falling off a chair. Try it. 

Dear SkinnyBrands investors

Following an update from the company we wanted to provide you with more details on SkinnyBrands’ most recent investment round and how this has led to changes to the shares reflected in your portfolio account.

As communicated by Tom, the company has received further investment from Mosaic private equity group. The investment was for 37.5% of the company and the share price, as indicated in your portfolio, was £0.72. This gives an overall post-money valuation for the company of £1,422,236.88.
The reduction in the valuation has primarily been driven by the requirement of the incoming investors to receive 37.5% of the company. The company felt that it needed to accept such terms due to the ongoing cash requirements of the business.

Because this round came so soon after closing the prior round, Seedrs agreed with the company and the incoming investors that the round would be structured so that Seedrs investors would not be diluted.

As a result the Seedrs Nominee was awarded a bonus issue of shares to be held pro-rata on behalf of the Seedrs investors. This has been reflected in your investment account, and the number of shares attributed to you has been increased by 42.87595%.

We would like to emphasise here that Seedrs have worked closely with the company and the incoming investors to ensure that the rights attaching to the Seedrs investors’ shares have been preserved throughout this process, as well as the ownership position of those who invested via Seedrs.

Therefore the overall effect for those who invested in SkinnyBrand’s previous round via Seedrs will be as follows:

a. your overall ownership in the company remains the same (i.e. it has not been diluted); and
b. the price of each share held by you has been reduced from £8.11 to £0.72, to reflect the share price used in the most recent round.

The company is willing to answer any further questions that you may have in relation to this update.

Kind regards
The Seedrs Team

Our London Adventure

It's a jungle out there.

A Huge Thank You to all who came to have a chat about the new ECF.Buzz platform launching next month. I am massively enthused by the overall reaction. So lets get it out there and help investors take back control. 

We had an excellent series of meetings and one thing that was confirmed for me, beyond any doubt, is the need for our new service. Investors have for the last 8 years of Equity Crowdfunding, been of second or no interest to the main retail platforms. Lack of information, misleading information, occasional dodgy information have all become commonplace. Caveat Emptor, like Free Speech, only works if everyone involved takes some responsibility. 

Onwards!

Zing Zing CVA is passed by Creditors so Crowdcube investors are stuck.

Yet again Crowdcube investors are treated like door mats. Zing Zing raised £1.5m in 2016 and then another £1.2m in 2017. Now Creditors have agreed a 4 year CVA which leaves the Crowd holding onto worthless paper. Paper that Crowdcube promoted as being worth £7.2m in 2017. 

We wrote about this when the news broke - here . Predictably profits forecast on Crowdcube never materialised. The CVA documents go into a variety of reasons for this. We add them all up and make it one reason - piss poor management and planning. 

As investors are not considered to be creditors, they have no leg to stand on in these cases. Creditors are being told they will get all of the £523k debts back. No one gave a monkey's about the Crowd. Least of all Crowdcube, who have their commission. The administration for the CVA will cost £100k. Yup.

So get savvy about your investment and join our crowd at ECF.Buzz, where you can learn from other investors and experts.

Lakes Distillery not in the right spirit with new Down Round.

The Lakes Distillery plc raised £1.6m 12 months ago on Crowdcube. It had already raised £1.5m the year before. Valued last year at £44.38m pre money. Just this month they have privately raised a further £1.6m on a valuation of just £36m. So what's happened to those plans?

If you Google The Lakes Distillery, you find a barrage of hits for their listing at the end of 2017 with M&S. This occurred just before the Crowdcube raise; which was a fantastic success. We searched M&S today for their product but drew a blank.

Companies try not to have down rounds for obvious reasons but this one is significant. Accounts for the company are due out this month so it will be interesting to see how they relate to the ones used to entice investment last year.

Here's hoping it is good news. Thanks for the heads up go to anon.