Monday, 20 March 2017

100 Free tickets to Master Investor 2017.

If you would like to come to the 2017 Master Investor event on 25 March in London click here for your free ticket. Limited numbers on a FCFS basis.  We have a stand in the Blogger section.

Our discount code is FANTASYEQUITY

Hope to see y'all there.

Wednesday, 22 February 2017

Latest Beauhurst Report is debunked as fake news

We had an email today from Beauhurst -  you know Beuahurst the experts on Fintech News. It stated that Satago had been sold for an undisclosed sum to Oxygen.

We reported in this on this blog - Satago was funded via Seedrs. How often do we get the chance to report some good news about equity crowdfunding?

It was a Kellyannism.

Satago went into administration with Seedrs telling shareholders that they would receive nout back. Oxygen bought the company out for next to nout in a pre pack deal. 

Then all of sudden its a roaring bloody success - here is what they said........

What happened to the startups of yesteryear?

This week has been rewarding for investors in high-growth companies: Xafinity Consulting raised £190m in its IPO on the LSE; Ramsdens raised £15.6m with an IPO on AIM; and SatagoCustomadeRoot6, and SecretSales were all acquired.
So its all complete BS. Someone needs a grilling. You simply cant have fake news outlets trsuted with financially sensitive information in the public domain. Beauhurst are a total sham. 

Meanwhile on another ECF Platform some good news

Seedrs funded Satago have been bought by Oxygen Finance for an, as yet, undisclosed sum. 

First round investors via Seedrs bought in at a company value of just over £100k, so there is hope for healthy return after 4 years.

The last accounts filed by the company showed hefty losses but clearly the fit with Oxygen is a good one.

Gripit forced to slip on its fantasy valuation

We have been here before. A Crowdcube pitch forced to lower its valuation due to lack of interest.

You would have though that with the considerable backing of Dragon Meaden, that this fantasy valuing could be avoided.

Bragging about the fact that you are stocked in over 5000 UK stores and that you export to 32 countries when your entire turnover for 2016 was just over £1m is a little foolish. There has to something very wrong with the product or its pricing for sales per unit to be so very low. 

The value has now been dropped by £2.5m pre money. This is still high for a company that has so far completely failed to deliver on its potential or its projections from the previous raise. Still it has just succeeded with its US patent, so maybe things are on the up.

Depends really whether you believe the hype in the business plan. It still has a long way to go to get over its Crowdcube line - dont bet against a new valuation anytime soon.

Tuesday, 21 February 2017

Innovationmakers report further large losses



Innovation makers have raised around £600k on Crowdcube in two pitches.

The first pitch showed them making a profit for YE May 16 of £707k. Accounts just filed for the year have losses of £250k. By May of this year they projected annualised profits of over £1.5m.

It's a neat enough product, although the patent has been pending for a while. But why cant they produce projections that are at least on the same planet as their real figures? They made that elementary mistake on the first raise. 

Even allowing for the changed filing dates, the projections from just a year ago are way off the real figures for the last year. Its is really pretty pathetic unless it's being done on purpose. It must be a case of business naivity but it's one that has a habit of repetition.

Now they will almost certainly be raising more cash this year. Cant wait for the increased valuation and its accompanying legion of alternative facts. 


Crowdcube's UP Investments manages a sale.

UP Investments raised money on Crowdcube in 2014. Now the company is being sold.

But read on, as it's not really. 

Since 2014 the company has made cumulative losses of £734k against projected losses of £361k. So pretty standard for a Crowdcube company.

What is odd about this one is the line up of their management team. 

A quick glance at their website shows a large team - 20 of them.

A quick check on their CH page shows all but three of the company directors have resigned. And note they resigned well before the company was sold.

The company's General Counsel and Compliance Director states that ''This business has downscaled and has been engaged in finding a strategic partner due to funding constraints''  on his Linkedin page. Thats ok and must be true given that this guy is a lawyer. Incidentally he resigned as a director in June 2016.

Jim Milby who is listed on the company's website as the Chairman makes no mention of UP in his Linkedin page.

The Finance Director resigned in May 2016.

Several Directors talk about the sale including the founder. Like it was a success.

The company somehow managed to be included in a list of the World's Top 25 Fintech companies published in the Sunday Times. Crowdcube were not on the list. In fact not one of the UK's equity Crowdfunding sites made the list. How UP got on to it is anyone's guess. 

We asked the company for a comment. They responded that the company had been or was in the process of being sold for an undisclosed amount with the agreement of the shareholders. Only one of the stated management team is actually working for the company. The company runs a FCA regulated platform.

So this has to go down as a Crowdcube success - doesnt it?


Below is the full text of the email from UP to shareholders last October. As you can see claims made by most of the company's directors (on their Linkedin pages) that the company was sold is a a trumpism. Watching the salesmens' (UP directors) videos it is now clear that this company was far from a good bet. A couple of points to note -

1. Their advice on claiming negligible value is contrary to HMRC EIS rules and HMRC have refused applications. Useful advice from a FCA licensed platform!!

2. There was no agreement from shareholders as the CEO James has claimed to us - that is a Kellyannism.

3. White Label Crowdfunding Ltd is a hollow company with very little capital as we write. What they do have is a close relationship with Rebuilding Society, which, not surprisingly, is a main contributor to the investment opportunities listed on the failed UP platform. Ignoring the poor grade of investments they offer, we hardly think that this will pass FCA approval; if they are awake. By way of an example, the CEO of White Label is also the CEO and founder of Rebuilding and on his Linkedin page, White Label give Rebuilding as their main client. Some achievement that!

 Crowdcube DD as usual nowhere to be seen...............

Dear Shareholder

As per my recent email, the Board has concluded that there is no prospect of UP Investments Holdings (UK) Limited (“UIH”) raising further funding to put our platform onto a commercial footing.

The Board has thus reached an agreement for the sale of UP Investments Holdings (UK) Limited (“UIH”) to White Label Crowdfunding Limited (“WLCF”).

The Board recommends the sale of UIH to WCLF

The Board has performed an exhaustive search for potential buyers over the past six months, and is confident that the offer from WLCF represents the best available value for shareholders. The owners of WLCF have impressed the Board with their development plans for the Platform.

The Board has agreed that to put UIH on a commercial footing requires further development work. This work will need substantial further funding, and WCLF have a better chance of  raising the capital needed to achieve this.

Both parties have agreed to structure the Deal as a simple Share-for-share exchange, with each of you receiving 17 WLCF Shares for every 30 newly consolidated UIH Shares that you hold.

The sole asset of UIH is its investment in UP Investments Limited (“UIL”), and UIL has made significant trading losses in the two accounting periods that ended on 31/05/2016.

Enterprise Investment Scheme (“EIS”) shareholder considerations

The Board’s financial advisors believe that UIH shares do not currently have any financial value, and the Board urges you to seek to file Negligible Value Claims on your shares as soon as possible. Filing a Negligible Value Claim will allow you to make Share Loss Relief Claims against your total income of the current and prior tax years.

For those of you who are waiting for your EIS claim forms, please note that our accountants have submitted the EIS1 form to HMRC. Therefore you should expect to receive your EIS3 claim forms shortly.

Any Income Tax Relief you have claimed to date under the provisions of either the EIS or the SEIS Scheme will not be reclaimed, but instead, will be deducted from the initial cost of the shares when calculating the Share Loss Relief.

The Board hopes that the WLCF shares that you receive in exchange for your UIH shares will appreciate in value once the Platform begins full commercial operation.

Please bear in mind that any gains you realise on the WLCF Shares in the future will be subject to standard Capital Gains Tax.

Shareholders are advised to take professional advice on all the above tax matters and the Agreement itself before taking the steps set out below.

WCLF's vision for UIH

Attached to this email is an overview, written by the prospective buyers, of their vision for UIH. Please have a look at this before the formal offer is made later this week.

The next steps in the process

In the coming days, the prospective buyer will be emailing you with the following the documents via an online signing service. As of tomorrow, the directors - including myself - will sign the agreement in advance of other shareholders.

A copy of the Share Sale Agreement
A share indemnity letter
A stock transfer form with your details

When you receive these documents, please give them your consideration  before making a decision to sign. Your signature will state to the buyer that you are willing to accept the terms of the Deal.

A final thank you from myself

The last twelve months have been difficult at times. They have taught me that a new injection of funding and enthusiasm is needed in order to realise my vision for UP.

The people behind WLCF share both my vision and my approach, so I am pleased to recommend this deal.

I have agreed to stay on with the company as a non-executive director. I will look to help smooth the transition and assist the new owners with progressing their plans to reimagine and restore UP.

Yours sincerely,

Sunday, 19 February 2017

As Crowdcube celebrate 6 years of Alternative Facts, Pod Point takes the Piss

Podpoint raised £1.8m just 11 months ago on Crowdcube. Now they are back for more and proclaim that they are one of the UK's fastest growing tech companies.

However it is not quite that simple. 

In their 2016 pitch, the company gave investors incorrect historic financial data for 2014/15. They, along with the FCA regulated Crowdcube, published so called historic figures for that year, showing a profit. In fact once the accounts were filed (after the pitch) they reported a loss. That is pretty shabby.

In the projections for 2015/16 they showed a small loss of £70k. Remember this 'projection' was published when well over half of the year had been completed. It is now clear, from the new Crowdcube pitch, that the real loss for the year was £3.226m. The chasm is mainly made up from a turnover that was barely more than 50% of the projection and costs that were much higher. Future years are now completely different to the projections presented just 11 months ago. Makes the claim to be such a fast growing company look a little trumpish.

The turnover for 2014/15 was according to the historic figures given, £6.4m. The turnover given in the latest pitch for the 2015/16 was just £5m. So this incredibly fast growing company slowed down in 2015/16 by a whopping 28%. That's clever for a fast growing entity. 

Nowhere in the 2016 Crowdcube  pitch did they mention raising more cash. 

Despite their dismal performance, the company has miraculously increased it's pre money valuation from £26m to £35m in 11 months. 

Now we have this new pitch coming just weeks before they are due to publish the 2015/16 accounts, which on past history will be worse than the Crowdcube stated figures. If I was interested in this company, Id certainly want to see the filed accounts now - not just after this round of funding.

This is not about whether this company can go on to make it - it has considerable backing from some serious sources. It is about the use of what now appears to be intentionally highly over optimistic projections and a total lack of regard for accuracy in reporting the historic figures, inflamed by a crazy system where valuations always go up - not matter what happened to the profits and turnover. Kellyanne Conway must be in the room.  Can you have any faith in their new projections, given the extraordinary gap in the last set?

The company says the undershoot in revenues is down to a change in tactics. Larger corporate deals with revenues pushed out by a few years, have taken over the place of smaller cash generating deals. Well that is a surprise given this 'revelation' occurred in 2016 before July(YE in June) but after March (when they completed the CC raise based on small deals). If the smaller deals where in fact there to be done, why would you reject them? Why not do both? Who's to say what they will be doing this year. 

It could just be a case of their new backers Draper Esprit wanting to use Crowdcube for some free exposure and useful PR. It would not be the first time Crowdcube investors have been cannon fodder. An interesting idea when you consider that Draper Esprit are backers of guess who as well.

Although as someone has pointed out below - the US firm Charge Point have raised between $50m and $100m for expansion - some of it in Europe. So maybe they could look at a short cut buy Pod Point and give the poor backers of Crowdcube businesses a hard ear,ned return. Then again maybe not.