Tuesday, 13 October 2015

Valuation c/o The School of Rock

Tigmus initially strikes you as a great idea - using the power of the internet to solve one of those really irritating problems - connectivity. As a concept it looks good.

However this is one hell of a punt. The business has not completed a years full trading and has certainly not been pressure tested. It has valued itself at £1.2m even so. Whats more it has ambitions to be turning over almost £10m in three years with no further fund raising and a marketing budget heading rapidly down the fret board in the wrong direction.

It states that one of its main selling points is the ability to link a band with its fans in a venue that suits both. But wait on there - you can easily do this for free on Facebook (the medium Tigmus say they will use) by creating a Facebook Event, linking it to the venue and away you go.  

From our rough calculations they have facilitated 52 shows to date with an average income of £800 per show. So to reach their Yr1 revenue targets they will need to put on another 147 shows in the next 5 months or more than 3 times what they have achieved over the summer. They currently have only 28 events listed to end November 2015. That isnt to say they cant do this but its worth looking into.

They have no track record of delivery when comes to GPM - the only figures they show have a negative GPM. So their assumptions may well be achievable but it certainly hasnt been tested. Again they have been trading for such a short time that they couldnt possibly have winkled out all the problems yet - like dealing with larger venues who want booking fees up front, having gigs which flop etc etc.

Where then does this valuation come from? Maybe the School of Rock?

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