Tuesday, 9 August 2016

Crowdcube's due diligence just keeps on piling up

Sorry for the repetition. But checking back over our records, we keep finding yet more examples of Crowdcube's incompetence. Is this another case of fraud?

Here is just one of many examples. Orsto raised over £70k on Crowdcube in May 2014. The previous year on Crowdcube, Orsto had failed to raise £120k. In this 2013 campaign,  pitch documents declared the company had invested £1.2m in the previous 9 months. This appeared on the balance sheet as fixed assets. 2013/ 2014 was a time when Crowdcube were claiming they had ironed out any wrinkles from their 2011/12 start up and had rigorous due diligence.  

Well surprise surprise when the real accounts are filed, the fixed assets for the company are £3k. The investment which appeared in the pitch as real and historic never took place. Needless to say all the other figures in the pitch financials are also totally wrong, both historic and projected. 

Are there any investors in the company asking what the hell happened here?

As the money ran out, Orsto reappeared on Angels Den and tried to raise another slug there and has also been on Kickstarter. This blog has some very unfavourable information about him! http://www.eevblog.com/forum/crowd-funded-projects/the-orsto-watch-is-back!/ which suggests that the founder is a serial scammer. Confirmation of this can be found here   - a piece about how the Orsto CEO was flushed out on the Kickstarter campaign and the campaign was closed down. At least KS have a degree of due diligence.

We spoke with the company and they confirmed that the 'smart' watch for which they had taken people's investment, no longer existed. They now sell analogue watches. So yet another case of investors being led very easily up the garden path.

Crowdcube - should be re-branded as The Criminal's Friend. 

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