Is Airlander just a load of hot air?

Hybrid Air raised £2.1m on Crowdcube a year ago - now they are back for another £500k valuing themselves (if you cant stand heights look away now) at £55m.

Since the first raise, the company has delivered just over £9k of the promised £2m in sales revenue. Of course these were just silly projections so no one really cares about this chasm.

As yet this hybrid balloon/plane has not been made or flown or landed. There is no EIS.

It completed its new round on Crowdcube in just 2 days and is now over funding, in hovering mode - please look up, you cant miss it.

The Crowdcube pitch is full of the usual Crowdcube BS. Like for example the claim that Hybrid somehow beat off 136 companies to present at this February's Cleantech Innovate event in London. Is that really how it works?

When asked some very reasonable Q's on Crowdcube about the valuation, the answer was beyond belief. Apparently the way they valued this company is by taking the EBITDA 3 years out and multiplying this by the industry norm. So for example, given the delivery of £9k of sales against a projected £2m last year, we can all see how well this system works.

They also had the balls to tell another enquirer that if the sales had been in line with the projections, then so would the profits have been!

The plan is to IPO at the end of this year to raise the £30m required to put the machine into production.

It is hard to see why this one has been so quick to raise the money when Pact Coffee failed. Both very highly valued but at least Pact had a product that had proven sales. It has to come down to 'dreaming'. Hybrid's video is very other worldly and cleverly gets the blood rushing. People are using CC for an adrenalin rush.

It will be fascinating to see what happens next. If what they claim is true then maybe £55m is OK but given the last set of promises proved wholly flawed, this is a pure guessing game. When at several thousand feet above the ground, I prefer a little more certainty. It will either be a spectacular success or go down in flames - there can be no half measures.

Good luck to all who float in her.

Crowdcube's Glassfit in liquidation.

Ex Crowdcube pitch Glassfit Inc has gone in to liquidation owing over £600k.

The company completed its Crowdcube pitch for £120k, although we are not sure the funding ever went through. Alex Foster is the CEO, or was. The name was changed to Race Yourself. We wrote about them -
http://fantasyequitycrowdfunding.blogspot.co.uk/2015/03/the-case-of-glassfit-inc-or-race.html and the internet has several articles saying they did raise the money on Crowdcube.

It is very possible that this one was a scam - certainly the company's software for Google Glass was so poor that it is very surprising Crowdcube ever took them onto their platform. Mr Foster is silver tongued.

Not one of Crowdcube's finer moments this one.

Why we are doing this?

I had a comment posted by a Chris yesterday. Quite aggressive and very rude but it made me think  - so why am I doing this?

There are various reasons and they keep increasing the more I do.

Despite what Chris said, I have run several of my own businesses from start up, some successfully and some not. In fact for 35 years that is what I have been busy doing. I know the difference between failure and success and bullshit and the truth. That is one reason I do this - to make sure that the ECf platforms cannot get away with the lies they have been stringing people along with. The evidence we put out here is all factual, backed up by filed company accounts.

Having started this blog, I came across a few people who enjoyed it and so carried on. In the early stages, I had no intention of making this a commercial venture. However, as luck would have it, people liked the approach and started asking me for advice. So the blog has been the the driver for ECF Solutions Ltd, which is about to launch its first ECf campaign.

Also as a result of the blog, we had approaches from several papers and websites asking if we could write for them. Hell yes, if you pay us, we said. And they did.

So this blog, which Chris has so ridiculed, has now produced two sources of income and started a new business for someone who had semi retired. I have to say I'm loving being back in the saddle Chris.

I had no idea what content marketing was before I started this. When I did my Cranfield MBA the internet was just getting started. Now I have it for breakfast every day.

Chris you will have to forgive me for not publishing your comment but it was written with such venom that most of it doesn't make sense. Feel free to try again but take a little time to read it through. Happy Easter to All.

Come on guys you cannot be serious

A new pitch just launched on Crowdcube has the headline grabbing statement to describe its gadget-

'With an industry leading 5 Star rating on Trustpilot.............................''

So not only is this a full 5 Star Rating but it is an Industry Leading one.

How many reviews should you have to make a claim like this on the UK's largest equity crowdfunding platform. A platform that is very strict on its due diligence.

How many would be reasonable to make such a gargantuan claim? 1,000 reviews, 5,000 reviews? No surely it would have to be in the tens of thousands to have any credibility.

The real figure for this business, Nobly Point, is 37. Thirty Seven. No not 37,000 or 3.7m just plain old 37. Less than 40 and just over one third of 100.

Is that credible. No way. Would you feel inclined to trust the rest of what they tell you - No. Would you be surprised that this nonsense is allowed to appear on an FCA regulated ECF platform?

No because it is on Crowdcube.

Pact Coffee lay off 20% of their staff

Pact Coffee, which only days ago so spectacularly withdrew its failed Crowdcube campaign has now sacked over 20% of its 74 staff.

According to the company the lay off's had nothing to do with the failed campaign. Pure coincidence.

Rapoport, the founder, commented -

'These redundancies are unrelated to our decision to delay fundraising, and will not affect the quality of our coffee, customer service or our rate of growth.” 

So what exactly was the point of them?

So now we can see the real affect of getting an ECF campaign so terribly wrong. Should have sought advice, we could have helped avoid 17 people losing their jobs and raised your money.

Are the Wheels coming off?

Spring is in the air and the latest trend to hit Equity Crowdfunding is the Catholic Campaign.

The London Cocktail Club was trying to raise £750k but was getting nowhere. So just like Pact Coffee, they have pulled out early. It's catching.

The company says it has found alternative sources of capital, which is lucky as it was never going to get  close to the Crowdcube total.

What are Crowdcube playing at?

Are Crowdcube insane?

It may seem an odd question but bear with us.

One rather well used and often misquoted definition of insanity is 'Doing the same thing over and over again and expecting a different result'.

Well Crowdcube are certainly guilty of that.

A little research reveals that a growing number of their pitches are forced to increase their equity and lower the A share threshold during their campaigns. Just look on the site right now.

Currently 6 out a total 20 pitches have reduced their valuations. Half of the remaining 14 will have to if they want to complete their campaigns. So that is 50% plus of the active pitches at anyone time where the companies are over valued.

There is a message in there somewhere. Its hiding in clear sight buts its definitely there.

The obvious conclusion that we can all see and they clearly cannot, is that the people from the OTL department are not doing a very good job when it comes to valuing the offers they are putting out. Quite apart from the unprofessional look it gives the site, it is a firm slap in the face of investors who are being asked time and time again, to over pay.

Here is a tip - for free.

If people consistently tell the pitches that they are over valued, then they are - over valued. If this continues for sometime, as it has, then why not try to change your metrics for valuations or alternatively employ some people who know how to do this.

Of course companies that do not wish to make this mistake can contact us for free advice in the first instance and then some genuine guidance in how to go about raising money via ECF.