Wednesday, 16 November 2016

Where are They Now Part 2 - More of the Same


As the results roll in, we get a better picture as to how equity crowdfunded companies have fared.

Property Moose 

Raised £160k on Crowdcube in 2014. In 2015 they made a profit - which is we think a first for a Crowdcube funded company. Before we all take off our clothes in celebration, this was a profit of £75k against a projected profit on Crowdcube of over £800k. When assessing their achievement you also have to take into account that 2014 saw a loss against a projceted profit of £400k and shareholders have been diluted several times - again no mention of this on the Crowdcube version of events.

You should also know that James Cadbury, who resigned as director of Moose, has opened a new chocolate (surprise surprise) venture Love Cocoa, which he intends to crowdfund (surprise surprise). He appeared in the Crowdcube Moose campaign as one of 3 key team members. Only one remains. 

Scaramouche and Fandango


UPDATE 22/11/2106

We have now received more information on S&F. They are in fact doing rather well and will most probably be ahead of the Crowdcube projections for 2016 - yes that was ahead. So firstly many congratulations on what will be a first for Crowdcube and apologies for not being up to speed  - although we cant take too much blame as we can only report on the information we have. Thanks to the SH who shared this info.

Now renamed the Galileo Group, they seem to gone off map. According to the Crowdcube projections (where have we heard that before?) 2015 saw the company make a small profit. 

Well, accounts filed for 2015 report a £150k loss, on top of accumulated losses of £250k, which means the bank was empty on their BS. S&F raised £150k on Crowdcube in 2014 and have raised more funding since, despite not forecasting this in the CC pitch.

Sorry the news is all the same but we can only report what actually happens  - we leave Crowdcube to make things up. 

Free Agent

Free Agent raised £1,2m on Seedrs in 2015 at a valuation of £30m. They have just completed an IPO on Aim at a  pre money valuation of £26m. But apparently at least now the shares are liquid. Maybe investors should wait for the IPO before investing in the future? Institutional investors seem to have benefited. Of coure what the management of Seedrs have ignored (we presume on purpose as they are not stupid) is that you cannot simply sell your shares now unless you want to make a net loss. EIS dictates that you must hang on to them for 3 years - so 2018 would be the earliest you could sell and keep the 30% rebate. So no Seedrs, these shares are not now liquid. Privately Seedrs have admitted that this is a down round. Hmmm.

5 comments:

  1. You could argue that with EIS (assuming it EIS qualifying) the effective price paid on the Seedrs £30M valuation will eventually have been £21M, and investors will eventually not have to pay CGT. However, it is not right if companies are inflating their ECF valuations just because they know the punters are going to get EIS rebates. IPO-ing at a lower level than the Seedrs raise doesn't reflect too well on Free Agent, Seedrs or the punters who invested.

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    1. Yes it was EIS = so you are right. However we just had this comment in an email from Jeff Lynne which strikes us as very odd - '' The company had raised £1 million through Seedrs from 695 investors in 2015. These investors now have the choice of continuing to hold their shares or seeking to sell them on AIM at any time.'' Clearly under EIS rules you have to hang onto your shares for 3 years, so this assertion that you can sell them at any time would seem to be a long way off the mark unless you are happy to make a loss?

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    2. https://twitter.com/shrock/status/801472866617147392

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  2. Little comfort especially when the AIM trading costs are high...

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  3. Its a bum deal for those that invested early,,,

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