Thursday, 31 March 2016

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.


Monday, 28 March 2016

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.

Thursday, 24 March 2016

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.

Wednesday, 23 March 2016

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.

Tuesday, 22 March 2016

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?


Monday, 21 March 2016

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.

London Distillery Company punch drunk.

The London Distillery Co was one of Crowdcube's largest early raises. It raised 250k in 2012.

http://fantasyequitycrowdfunding.blogspot.co.uk/2015/10/gin-up-lads-results-are-not-everything.html

Since then it has constantly failed to get even close to the Crowdcube projections, used to sell this equity.

Isn't that a story we have all heard before?

Now the latest accounts show yet more heavy losses - £267k to YE March 2015 against a projected profit of £270k. The company is now technically insolvent and states in the accounts that it is raising more money.

Well it has not done so yet.


Where has Luxtripper Gone?


Luxtripper funded at the start of February this year - a second time on Crowdcube.

http://fantasyequitycrowdfunding.blogspot.co.uk/2016/02/luxtripper-completes-crowdcube-pitch.html
http://fantasyequitycrowdfunding.blogspot.co.uk/2016/01/luxtripper-is-back-on-crowdcube.html

However this pitch has now disappeared  - search for it on Crowdcube and only the 2014 raise comes up.

Anyone any clues? It might just be a delay but its normal for CC to keep the pitch on the site.

Sunday, 20 March 2016

The New Craftsmen going nowhere on Crowdbnk.

The New Craftsmen raised money on Crowdcube in 2014. We wrote about

http://fantasyequitycrowdfunding.blogspot.co.uk/2016/02/they-do-say-that-one-rotten-apple-will.html
http://fantasyequitycrowdfunding.blogspot.co.uk/2016/02/new-craftsmen-back-on-crowdbnk-having.html

It failed to get even close to the Crowdcube projections, as nearly all Crowdcube funded companies do.

At the start of February this year, it arrived for a new £1m pitch on the ECf platform Crowdbnk. PR issued stated that the NC had already raised just over 50% of its target.

Sadly more than 6 weeks later, NC has still raised just over 50% of its target.

Once again the company failed to take any advice on how to go about this second raise when they had so spectacularly missed their original projections. So like Pact, this one is doomed to fail.

Had they asked us for some advice we could have steered them to a successful pitch and completion of their campaign.


Friday, 18 March 2016

All packed and gone away. Oh Latte.


The company due to take over the world of coffee has closed its Crowdcube pitch; early and well short of its target..

We wrote about them before - http://fantasyequitycrowdfunding.blogspot.co.uk/2016/03/what-can-you-make-of-pact.html

Pact claimed it was on course to raise £30m in the next 3 years only to spend it all plus some on customer acquisition.

We dont get any explanation from the guys at Crowdcube as to why just a few days before this campaign was due to run out of time, they just disappear. A good guess would be that the plans are pretty good nonsense as is the Crowdcube pitch  - no one was really very keen to invest. Of their £1m target they had received around £200k.

Maybe investors are eventually waking up to the facts that we keep posting here?

It is good to see that the Crowdcube OTL department were out to coffee with Pact recently - http://blog.crowdcube.com/2016/03/08/pactcoffee/

We'd love to hear from anyone who has the inside story.

Thanks to our skinny friend for the tip off.

Again thanks for this tip off - https://vimeo.com/159219013 - this is an explanation (of sorts) as to why they have pulled the campaign. Its a little sad to watch and in the end just emphasises that The Plan was total caque.

Looking forward to seeing him in six months time.

Wednesday, 16 March 2016

Tidy Books increases value X3 - Crowdcube ecstatic!


Tidy Books are back on Crowdcube. In 2013 they were valued at £600k.

Now their pre money valuation is £2m.

So investors are holding street parties to celebrate their X3 return.

Progress has to have been very good then.

No.

Projected t/o for 2015 was £1.6m with a healthy profit of £170k. According to the new pitch the actual turnover was a mere £428k with a small loss. As ever, all the old projections have been consigned to waste paper.

According to the projections from the previous raise, the YE August 2013,  the actual T/o was £413k so growth over the period has been zero. Reading the current Crowdcube pitch you would think they had come in on budget since 2013.

If you really believe that this performance is worth £2m then good luck to you.  To back the new projections you are going to need a lot of faith.


Crowdcube's Wild Trail closes



Wild Trail has finally been dissolved. The company raised £157k on Crowdcube in 2013, from 147 investors. We predicted their demise last year - http://fantasyequitycrowdfunding.blogspot.co.uk/2015/09/when-did-ceo-start-to-stand-for-chief.html

It is just another example of the Crowdcube out to lunch department being way below par when it comes to performing. Crowdcube thoroughly vetted the projections used to sell the equity, which had Wild Trail with a turnover of £4m and profits of £500k in 2015.

Move along there, queue forming. Now, who's next?

Tuesday, 15 March 2016

Pull the other one


Pull'd raised £100k last year on Crowdcube. They are back again this time for £350k, which is double what they said they would need last year.

The 2015 projections have, as usual, been discarded as a load of old trotters and now the business is apparently worth just a fraction more than it was then - even though the numbers say it should be worth a lot less.

Of course existing shareholders will see their real investment value fall if this round is a success - given that it is twice the size they were told it would be only a year ago.

So here are the comparisons

2015 projected T/o         £291k actual £230k

2015 projected loss        £(54k) actual £(106k)

The most alarming figure is the GPM.

The company projected a figure of 69% rising to 70% but has come in with only 56%. This 56% is far closer to the actual 62% from the 2015 actual figures.  The difference in such a key metric is enormous and is hard to explain.  However being a company presenting on Crowdcube, the margin rockets back up to 70% in 2016/17/18. They dont have any evidence to prove this will happen. But who needs that? This is Crowdcube where the due diligence is robust. Although looks like someone has made a right pig's ear of this one.

The projections now end with a T/o of only £552k and a loss for all 4 years. In 2015 they painted a much happier picture with 2017 T/o of over £736k and a small profit.

So we ask again how is this company worth more than it was a year ago?


.

Thursday, 10 March 2016

What sort of people do Crowdcube employ Part 2



You have to ask if it is surprising that so many Crowdcube pitches have exaggerated claims in them, when the staff at Crowdcube cannot resist bigging themselves up.

We wrote a blog about one instance recently. Now by accident we have come across one far worse.

The Head of Tupperware at Crowdcube, states in his Linkedin profile that he founded C...... Entertainment Ltd. So far so good. But reading the story of C ..... reveals some oddities. According to this guy, he was only there until December 2013. And according to him the company was closed by part trade sale and liquidation.

Records at CH show this guy is still a Director of C....., which has as yet not been dissolved. C.... realised only £1,500 in total from its liquidation with debts of over £100,000. Maybe the £1,500 was the trade sale? Maybe this guy forgot to post the resignation forms back in 2013 because in 2016 he is still there in the filings. Who knows, he works for Crowdcube, so it's all possible.

In his Crowdcube big up, C..... is a success story. Just for the record, in the 5 years it has been a registered limited company, it has only filed one set of accounts showing a loss of £100k. Apparently Crowdcube think this means he knows about building up SMEs and start ups. His only other 'job' outside Crowdcube has been a short 6 month stay at a marketing company - where he was sure he ran everything brilliantly.

When Darren Westlake's own self appraisal is not exactly accurate, I suppose the rest of his team are only following his example. However this guy is apparently in charge of something for which, from all the evidence we see, he is not even remotely qualified. He gave a Crowdcube presentation at the Business Show in London last December.

Should we be worried? Most certainly.

Still it helps to explain all the anomalies. Looking good there Ron.

Monday, 7 March 2016

Renovagen now versus Renovagen in 2014 - fudging the valuation.





Renovagen are back on Crowdcube raising £600k at a company value of £3m

They raised £220k in late 2014 at a value of £1.5m. So happy Corwdcube investors have yet again made a small fortune.

Here is a direct comparison between what they predicted in 2014 and what they are predicting now. The blue figures are the new actuals (2015) and projections in the live pitch.

2015              Turnover £900,000      EBITDA    -£  34,000  
2015 MkII     Turnover £  85,000      EBITDA     -£137,000     

2016              Turnover £4.5m           EBITDA     £454,000
2016 MkII     Turnover £1.48m         EBITDA      £155,000

2017              Turnover £15m            EBITDA     £1.34m
2017 MkII     Turnover £9.95m         EBITDA      £ 852,000

2018              Turnover £42m            EBITDA     £4.93m
2018 MkII     Turnover £25m            EBITDA      £1.73m


So a company expected to be making only 35% of the EBITDA in the 2014 projections, is now worth twice as much as it was then. How is that possible? Well quite simply it is only possible because all of these figure are complete and utter fantasy  - they are meaningless. If they had any meaning a company halving its projections, would logically have to be worth less than it was before.

Of course you will not get this comparison anywhere else but here, certainly not on Crowdcube's site. This is happening time and time again. We are not saying that Renovagen are a poor investment or that they might not go on to be very successful. The point is the platform is clearly misleading people by fudging the valuations. As clear as night follows day.

So what sort of people does Crowdcube employ?


We have long wondered just how it is possible for Crowdcube to be getting things so wrong.

Maybe the answer lies in the quality of their staff?

Take for example a guy who describes himself as Senior Business Development Manager at Crowdcube. He goes on to claim that he has been responsible for funding £135m of deals in debt and equity, £80m since Jan 2015. He joined Crowdcube in July 2014. 

He is clearly one of their senior people  - so what experience of setting up companies, advising on company valuations etc, does this whiz kid have?

He worked for a year and a half at Cavendish Corporate Finance, a company founded by a possible uncle who now sits in Ermine. Before that he did odd jobs as a runner, intern and tea boy etc having left university with a degree in Art History. The standard run of jobs for an ex Harrovian with some very useful pedigree.

So at the tender age of 26 he is now a lead man at Crowdcube, having had what you could only describe as zero experience in this field.  

Say what though, he has bloody useful connections and is a super guy. Yah. Go Crowdcube.

What can you make of Pact?

Pact is aiming high - it's plan is to be supplying 1% of the world's coffee.

In order to achieve this, it has to raise £30m over 3 years, which it then loses on customer acquisition. Then we dont know what happens. Brave or plain daft, it's hard to know.

The Crowdcube pitch for the first £1m has been slow - only raising £165k so far from over 750 investors. They had a meet the founder day today and this coming Saturday (clearly not Rugby fans) but only 10 out of 24 slots were taken up.

The company is up and running, has an excellent team and its turnover for last month was £450k. This is impressive until you realise that the turnover for this year is projected at £11m rising to £95m in 2018. They call the plans ambitious.

It is possible that the style is that of the ubiquitous Unicorn - where ever increasing valuations on new funding rounds drive up company value like a game of hot potato. The companies never make profits and eventually the game ends and the one holding the spud is the loser.

We really havent got a clue if they can do what they say they will and it's clear from the reaction on Crowdcube that many people feel the same way.

In our opinion it would have been wiser to raise at least a good slug of the rest of this year's £8m before offering this to the Crowd. One thing that ECf investors should have learnt by now,  is that plans that show future funding rounds are wholly unreliable. For whatever reasons, there are numerous examples of companies stating that they will raise X after their ECF campaign and this never happens.

Mix into this, the sort of unpredictable factors that a natural product based company faces and maybe this doesnt amount to whole hill of beans. As an example how many investors or indeed members of the company, expected winter cauliflowers to hate the Cauli Rice process - none. So when they found that winter caulis reacted to being packaged as rice, they had to close down production for two months. Luckily they have found a solution, but it could have been curtains. It has certainly been a costly setback.

The valuation doesnt seem to acknowledge any of these possibilities - which it should.  

Sunday, 6 March 2016

Inspiral posts further losses



Inspiral Visionary Products raised £250k on Crowdcube in 2013.

According to the Crowdcube projections, the company would make a net profit of £1.5m for YE October 2014 and a net profit of £3m for YE October 2015. The filed loss for YE March 2015 was £260k, of which £127k was from a write off from their sister company Ekopia, which went into liquidation recently - see here -
http://fantasyequitycrowdfunding.blogspot.co.uk/search?q=+ekopia

Inspiral make a good product and have a goodly number of stockists listed on their website. However they dont seem very good with figures and do not always tell it as it is. The gap above between actual performance and the Crowdcube projections is just one illustration. These projections were never going to be met. They are a pure fantasy used to to gain £250k worth of funding.

In the original pitch they made various comments about likely contracts with M&S and Pret, both of which would have clearly led to much improved sales figures. We dont think these contracts were ever signed. They are not stocked in either now.

In the initial Statement of Affairs for the liquidation of Ekopia dated 27 January 2016, the director of Ekopia (also a founding director of IVP), stated that Ekopia owed IVP £227,527.99 - a very precise and accurate number. According to the accounts just filed for IVP, the debt is in fact only £162,457. You can see this in the Ekopia post above. How is it possible to be so wrong?

So the lesson here has to be the same as most lessons that we post - when it comes to Crowdcube, you really cannot believe any of the information in any of the pitches. Looking back over the IVP pitch there are many instances where they claimed one thing on the forum which has now turned out to be not strictly correct, both about IVP and Ekopia. Future contracts not already signed up should not be used to con people out of their money.  

Saturday, 5 March 2016

Solarmass provides a profit!

On the surface Solarmass produces what should be a world beating product - a solar roof tile. We all have roofs and we all need more solar power.

Back in December 2013 Solarmass raised £120k, in just 10 days from 96 investors. The company was valued at around £1m. The CEO had interest in the product from two roofing manufacturers and overseas enquiries from Australia and Canada. So the pitch read.

Luke Lang, one of the founders of Crowdcube, who is never short when it comes to PRing, let us know that 

“Solarmass not only hit and overachieved on it targets but in record time.  It’s a fascinating product and one that will go global as the demand for solar energy increases year on year, both domestically and in the commercial sector.  The renewables market is a great opportunity and we’re delighted to support a new entrant into the market.”

That was over two years ago and Solarmass have just filed accounts to December 2015 - early again like Wrap it Up - must be Spring in the air.

These accounts show a profit - well it is hard to be sure as they are so sparse but it would appear the company made £9k.  - having filed losses in 2013 and 2014. Oddly for a manufacturing company, the fixed assets are only £8k. When they raised their funding, one for the uses of the money was to buy machinery. This appears never to have been bought. 

With so little in the way of fixed assets and  net assets of only £19k, its hard to see how they can make progress without raising more capital.

To be 'going global' maybe a little ambitious at this stage, so Lang's crystal balls may need dusting. Still they have not closed yet which for Crowdcube is a massive success story.

Anyone out there with news on Solarmass please do get in touch. 

Friday, 4 March 2016

Droplet evaporates


Droplet's second visit to Crowdcube was very short lived.

All references to it have been removed by Crowdcube. This was the result of a Google search -

blog.crowdcube.com/2016/02/23/droplet-returned-for-round-2/

23 Feb 2016 - In April last year, Droplet raised £549,020 from 298 investors in order to grow its ambassador network, reduce the cost of acquisition of ...


But when you follow the link all you get is - 404 Not Found!

However we have been able to find some of Mr Lang's usual PRing on the subject, kindly reproduced two weeks ago by His Masters Voice, Crowdcubefund Insider - 

Luke Lang, co-founder of Crowdcube, commented:
“Tech businesses, like Droplet, are always popular with our crowd of 245,000 members who have invested £45.5m in the sector, so it’s great to see the business return for a second round of funding on Crowdcube.”
And Amen to that came the cry from the 245,000 Crowd.

So - the obvious question is, where has it gone? They were a long way off their projections, even by Crowdcube standards, so maybe they have been cut adrift to sink slowly like so many of Crowdcube's success stories. Ah well, another one bites the dust. Better luck next time everyone. Jesus only walked on water once you know and he was God's son.

Is it a Wrap?


Wrap it Up raised £760k on Crowdcube only 7 months ago. The company was valued at over £6m.

Accounts to YE Dec 2015 are now filed - very early which is always helpful.

They are quite tricky these ones. We wrote about this company when they were pitching

  - http://fantasyequitycrowdfunding.blogspot.co.uk/search?q=wrap+it+up+

As far as we can tell they made a small loss for the year. The Crowdcube projections had them making a profit of £235k.

What is more worrying, for them at any rate, is the cash position. The Crowdcube projections show cash at the year end of £136k. Its a cash business so there are no debtors as such.

In the real world the cash position filed stands at £600  - yes six hundred pounds. So out by a factor of 226 times.

The real position is quite hard to fathom as there are odd debtor entries in current assets, for monies not due for 12 months and an accrued income with no explanation. Best guess is that the real situation is they have current liabilities of around £70k and have less than £1k to pay to cover them.

Of course in the projections they had current asset/liability cover at this time of 3 times. Given that this projection was based on them raising only £400k, you have to wonder what's happened.

Due to the crazy accounting rules we have here, we may never know.

Is Gripit really worth £13.5m?


Well the answer according to the Crowd is yes - it has fully funded and is now in over drive.

So how do we get to £13.5m when it was worth just £320k in 2014 when it funded on Dragons Den?

Meaden has put in more cash as a convertible loan which takes the input up to around £1m. Sales are yet to get going but it is believed that they will. Predictions show turnover of almost £20m in 2018 with profits of £8.5m.

If they achieve this, can we say the business would be worth 6 times EDITDA or £51m? This would give investors now a return of almost  X4 - good but not stella.

What are the risks?

The business has never been stress tested - £20m is along way from £300k in revenue and will take a total sea change in management and skill levels.

The marketing budget, which last year was just over 10%, peaks at  15% of revenue next year and then falls to just over 5% in 2017 and 3.5% in 2018. Is this realistic for a trade and consumer product that has to sell in volume? As a yardstick Sugru, which raised £3.38m on Crowdcube at a value of around £27m last year, anticipates spending 18% of its revenue to achieve sales of £14m in 2017. That's over 5 times Gripits estimate for a far larger turnover and interestingly Sugru projects a lower growth rate year on year.

Market changes - what happens to gripits when the planet decides that plaster board is out dated and not eco and that producing massive numbers of plastic disks is not good for the environment?

Taking into account the estimated return if things go well and the risks that might mean they dont, hasn't the value for investors at this price already been stripped out?

One final thought. Meaden had a twitter chat with us over this and proclaimed that the reason she didn't invest in this round is because she wanted the democratic benefits of ECf to spill over onto the people who 'buy, use and love ' gripits.

We just wonder about that.

At this valuation most of the up side has been cleaned up and is ECF really meant for the types of people who will be using plaster board day in and day out?

She didnt like our points, calling them cynical and declined to continue. Cynical is possibly using the average persons money to make loads of money for yourself. We will have to wait and see.

 

Meaden sacrifices herself for the sake of the Crowd.



We tweeted Meaden to ask if this was such a great deal for the Crowd, why she had resisted investing this time herself. This was her respeonse -

i would have done whole thing but idea is for others to get involved who use, buy, sell and love

They will have to change the name of the TV programme to Pussies Den  - these Dragons are so nice and thoughtful. It is a wonderful world.

Thursday, 3 March 2016

This should not be allowed.


Crowdcube have a new pitch from the Yorkshire Meatball Company. We love Yorkshire and we love meatballs.

However.

This company has a subsidiary in liquidation and the body is still warm. This company never filed any accounts, even though it was incorporated in November 2013. It used the old trick of moving the filing date to avoid doing this, before liquidating. What's more, the company pitching is due to file accounts in just over 3 weeks time.

So firstly how can we have a company in liquidation, with albeit small debts of only £120k but which never filed any accounts, doing a pre packed deal with itself, now punting for cash on Crowdcube? Surely common sense dictates that this liquidation must be put to rest before any new business can be promoted on a FCA regulated platform, selling its equity to the public.

Secondly why, if there is nothing to hide, does this company choose not to publish its accounts at CH a few weeks early?

With the well catalogued, very poor standard of DD in the Crowdcube out to lunch department, it is almost certain that the information provided will not turn out to be accurate. That is one thing we can be certain of.

Just imagine, you all invest and the company hits 'unpredicted' problems in 18 months time  - nice easy way out is to close said company and then do another pre packed deal. Its worked once. A good example of exactly this is another Crowdcube success story Crumpet Cashmere, featured here. They did a pre packed and then launched Crumpet Cashmere, which funded on Crowdcube. A year later they hit the rocks and are in the process of setting up another pre packed deal. It could go on forever! Serial pre packers they should be called.

Mr Atkinson of YMC had Broker 4 Broker liquidated, so its not new to him.

It's all load of balls in our opinion. Order the chicken.

Wednesday, 2 March 2016

Ignore the hype GripIT is overpriced.


We found this from a large article in the Telegraph -

Grip It is now exporting to Germany and Belgium and a full European roll-out is planned for the end of the year, followed by an expansion into the US in 2015.
Grip It fixings are currently stocked in more than 1,400 stores.
The cash raised in the Den has been used to help Mr Daykin move out of his family's garage into dedicated premises. The investment will also be used for new machinery, and to ramp up production.
Revenues were forecast to hit £750,000 next year, but following his appearance on the Den, the figure is "likely to more than double," said the young entrepreneur.

Now the interesting thing is that this piece was written in August 2014.
So the progress promised has been just that, promised - not delivered. Revenues for the year in the final paragraph were in fact only £335k, making his final remark slightly ridiculous.
The hype on Crowdcube is understandable - that's what they do best. But dont be fooled, the valuation of £13.5m is based entirely on future contracts not yet signed for push sales overseas. These may or may not get signed and may or may not result in further pull through sales. The evidence from 2015 is that the pull through is sloooooooooow. 
There was no expansion in 2015 into the USA, that is earmarked for 2016 now. 
Be careful what you believe.

Later - 

Well it's two days since we posted this and the pitch has completed its £1.5m and is now in over funding. Guess we will just have to wait and see what happens. If it was such a great deal we wonder why Meaden decided not to invest in it herself this time? 

Yet another Crowdcube funded business goes under with dubious figures in the platform's pitch.


Compare and Share funded via Crowdcube in 2014. It was intended to be an on line car sharing facility; we think.

There was much hullabaloo over the pitch as it was the first to raise 3 times its target -. in the end it finished with £157k from 151 investors.

Now the company has closed. It would appear from the letter sent around to investors that the departure of the CTO, combined with critical cash shortages, has put paid to it.

The last filed accounts to YE March 15 showed equity funds were way short of the figure given in the Crowdcube pitch, £170k filed against the Crowdcube figure of £241k. According to Crowdcube, fresh equity funding totalling £227k was due in in 2014; the £157k above and then more.

The more never arrived.

This would explain the cash crisis.

But why again do we have figures in a Crowdcube pitch which are blatantly incorrect? The losses for the year were higher than predicted but yet again Crowdcube have allowed a pitch to use dates in their pitch that do not match up to the filing date at CH - so a direct comparison is difficult.

Oddly in the closure letter from 'The Board' there is no mention of this equity shortfall - someone should ask them about it.

This is hot news in that it's not yet registered as closed at CH. Thanks go to our friend for forwarding the closure email.

Tuesday, 1 March 2016

New Beauhurst report on UK funding is out

It makes for interesting reading and is free to download here http://about.beauhurst.com/report-the-deal-2015-16

Some of the ECf highlights - showing the numbers of deals done in 2015 from the different funding sources.

Seed Round

Investor Type    No of Deals
ECF                    228
PE                       116
PIV                      114
Incubator              80
Government         45

Venture Round

Investor Type    No of Deals
PE                       150
PIV                        90
ECF                      89
Government          68
Angel Network       64

Growth Round

Investor Type    No of Deals
PE                       175
Government          30
PIV                         30
Corporate              23
ECF                       17

Get a Grip said Daddy Bear


GripIt Fixings is an intoxicating story of boy dun good. Trouble is it has all clearly gone to his head.

There is no doubt the product has been a success but the hype is overdone. The business is now on Crowdcube valued at £13.5m.

If you check back over the last couple of years there is a trail of media crumbs that leads straight to Debs Meaden's door - the Dragon who put £80k into the business in 2014 for 25%.

Articles are rife -

http://www.mirror.co.uk/tv/tv-news/dragons-den-contestant-becomes-one-4066626

http://www.dailymail.co.uk/news/article-3459388/From-Pitches-Riches-Entrepreneur-10million-business-20-youngest-person-funding-Dragon-s-Den-appears-new-featuring-biggest-winners-losers.html

The problem is that the figures are not matched by the hype and the Crowdcube valuation is way ahead of the headlines claiming this business is now worth £10m.

Sales for YE Dec 2015 were only £335k with losses of £179k  - from a claimed distribution network of over 2000 UK stores. As you would expect the projected turnover rockets this year to by a factor of 9 - well it had to, to be worth over £13m. Future sales overseas are due to be epic - but they are for the future.

This business is a success, there is no doubt about that. At what level a success with a view to investment - well that is another matter. It seems to us that it is following in the Crowdcube tradition of being grossly overvalued at £13.5m.  

Someone is being very greedy and I think we all know who that is, Mummy Bear.

An interesting aside from this story is just how much money is needed to get a small business off the ground. Meaden has put in over £1m since her equity investment in 2014 - which may explain why she is so keen to see it back. Most small businesses raise £150k on here expecting that to be the end of their capital requirement, when in fact it is only the beginning.