Tuesday, 31 May 2016

Crowdcube were recommending Solar Cloth at the same time the company was going bust!!


We found this on the Crowdcube blog dated January 2016. (see below)

So this was after the CEO of Solar Cloth had jumped ship. Do Crowdcube take any interest in the companies they fund or the advice they give? For those of you who dont know, Solar Cloth has gone bust taking with it almost £1m of Crowdcube investors 'diversified' investment. A truly 'great start' from the Crowdcube out to lunch department............................
When diversifying a portfolio some investors may prefer to keep their investments to specific industries, technology for example and create their portfolio by investing in different stage companies within this sector. For example, an investor could have invested in:
Mindflood – a start-up tech company offering 12% for £100,000
Cell Guidance Systems – an early stage tech company offering 5% equity in return for £100,000 back in 2013
The Solar Cloth Company – a growth tech company offering 10% for £750,000.
These range of investments would be a great start to a diversified portfolio.
The picture shows a Crowdcube promo. All but ineed no longer exist!


Monday, 30 May 2016

This Crowdcube mess you are simply not going to believe

MEEM SL Ltd raised £700k on Crowdcube a year ago - see here 


We were initially contacted by a shareholder who had been sent a letter by Robert Brent the CEO. This letter dated 19 May stated that MEEM SL had been forced to close as of the 6th April. However the good news was that all shareholders were being offered free shares in a new company MEEM Memory, with a 30% increase in their holding. 

Bear with us, this one is a cracker!!

There was no explanation as to where the £700k had gone. According to the Crowdcube raise, the directors had stated they would not pay themselves a salary for the first year and the IP, the real value in the company, had already been paid for.

Further to this, MEEM SL had just completed a Kickstarter campaign, successfully raising over £50k on the 9th of March. 

Again further to this, one of the company directors had taken out a charge over the IP of the company, registered on 25 February 2016. There was no mention of this charge in the Crowdcube or Kickstarter pitches as far as we can see.

NOW IT GETS REALLY INTERESTING

As if all of this didnt already stink like the old Billingsgate market, we were contacted today by another MEEM SL shareholder (we'll call them OMG for clarity) - someone who had invested via Crowdcube. In fact they had invested in more than one company on the platform.

They wanted to know where we were getting our information from about MEEM SL and Memory, as they had had no correspondence from the company or Crowdcube. This shareholder had a holding considerably larger than the one owned by our first reader. They checked spam folders etc but nothing. 

How is that possible? How could both the company and Crowdcube miss an investor off the list when sending out such an important communication? How many more investors have been left in the dark? What in God;s name is going on here?

OMG had been asked to invest by Robert Brent, not once but twice, in the Kickstarter campaign only a couple of months ago - so he had the right email. In fact in the last email on this he sent out, he asked OMG to rally family and friends to put their money in as well. 

We are still attempting to understand how a company that was clearly on the verge of bankruptcy was able to pitch and raise money on Kickstarter or when the decision was made to scrap MEEM SL and create MEEM Memory. We are also trying see what happened to the £700k and answer the key question Robert Brent avoided, why was it necessary to close MEEM SL.

Of course Crowdcube will come out with their usual drivel but anyone with a brain has to be asking if they can allow this to happen what else are they making a total mess of. 


Upper Street does Equity Crowdfunding no favours


A recent article in The Times  - http://www.thetimes.co.uk/article/shoemaker-was-on-last-legs-but-crowdfund-investors-were-in-dark-3z5tn9zfz which we helped piece together, follows a number of posts we have here on this company.


It seems wholly unbelievable that Seedrs knew the real situation when they allowed the second pitch. The CEO of Upper Street, Julia Elliot Brown,  has a proven track record of being less than straight with her facts. Evidenced very clearly by her selfie as a successful business woman who now helps other companies go bust. How she can claim that she successfully exited Upper Street is incredible.

What we actually said to the Times was '' 'It seems pretty clear that when Upper Street came back for a second time, the company was in considerable financial difficulty. This is certainly not how the pitch portrayed it. The company was valued at £3.2m in October 2015 but by halfway through this month the company was to be worth just £12k. That anomaly is difficult to understand. Investors and indeed Seedrs might well ask why they were not told of the company's real situation.'' 

The important difference is that The Times left out the reference to Seedrs not being fully up to speed on what was happening.

Equity Crowdfunding needs a few changes, one of which is recommended at the end of the article. But this is not a major change and will not really make much difference. It's playing around on the margins

What we really need is a system whereby companies wanting to use ECF have to have audited accounts for the previous year including a full P&L and then must use full accounts reporting, for 3 years after they have raised their money. 

In the case of Upper Street this would have helped prevent this mess. 

Platforms must also be held liable for this type of failure - where there is very clear evidence that the pitch, for whatever reason, did not reflect the true state of affairs.

Seedrs is one of the better platforms so this is a very disappointing outcome. You would expect and indeed do constantly find this type of situation with Crowdcube pitches but not on Seedrs. 

Beer52 up their customer service but are still way off targets


Beer52, set up by the same guy behind Superjam, used to get the most appalling reviews.

They seem to have fixed this over the last year.

However in their equity crowdfunding projections on Angels Den, they showed a profit for 2015 of just under £1m.

Actual filed accounts show a loss for the period of £114k.

So still some way to go!

What is happening at Superjam?



We wrote about Suparjam's odd pricing policy here

http://fantasyequitycrowdfunding.blogspot.co.uk/search?q=+superjam

The Special Offer has gone but the pricing is still nonsense. Or it would be if their two main trade accounts, Waitrose and Ocado had any stock. Which they dont. So how come the Superjam website is still pushing people to them to buy the jam at a price 50% lower than their own website?

That's all very odd, as are the accounts just filed. Whilst we have to applaud Superjam for being one of the only companies to ever exceed their Crowdcube projections, we suspect this is not the whole story. Low stock levels and lower than anticipated debtors suggests that the company may have been trading at a much lower level than projected. A we dont get to see the turnover, so this can only be conjecture. Certainly the bank is still full of the cash they raised on Crowdcube.

We are sure Doherty stated he would be closing down the old Eat Super company but this has not happened yet.

Another very odd aspect of all of this is their branding. The main reason for the Crowdcube pitch was to create a new look brand with top end gift packaging. But the very name Superjam suggests a Woolworth style product and the new packaging just reinforces this.

All in all a very mixed message.

Saturday, 28 May 2016

Sugru look to raise more money in the USA


Sugru raised £3.4m on Crowdcube only last year.


Now they are looking to raise the same again in the USA. Backers in the US were keen to get on board last year but couldnt, according to the company.

There is little to view at the moment by way of their progress but the filed 2014 accounts are, as usual , somewhat different to the historic figures vetted and published by Crowdcube. And as usual they are different in the sense that the Crowdcube version was dressed up. Still that really comes as no surprise.

What is slightly surprising is the fact that Sugru would need more cash now. Their Crowdcube projections showed them raising only £2.3m in total via equity before the end of 2017. As they have already received £3.4m, you would think that would be enough? To hold A shares and therefore be able to mitigate any further dilution from the first Crowdcube raise, you needed to invest £20k or more. So we suspect that many of the 2375 investors are about to find their holding shrunk.

Of course the 'value' will increase as it always does, but then we all know this is just fantasy until it is realised.

It will be interesting to see how they cope with the more stringent due diligence in the US.

We do love this product and backed it to be the first major success via ECF,

Just hope we are not wrong.

Thursday, 26 May 2016

Lovespace - the reality for small investors


Are Crowdcube and Lovespace giving us all the facts?

This question was recently posted on the Lovespace pitch - we think it asks some very good questions not just of the company but also the way the platform has 'organised' the information it presents to investors - 

Ccube, a bit disingenuouly IMO, is referring to this a Lovespace's second round in its communications. In fact, as I think you have acknowledged, there have been at least 2 other rounds in between, so this effectively round 4+ since the first Ccube round. Acknowledging that most investors will have knowingly invested in B shares, I presume that there will again be no guarantees for investors who would otherwise wish to follow on their investment this time so material dilution should be expected/factored-in?
Having been shut out completely of the funding round which followed the first CCube raise In your communication to existing B shareholders at the time of the next funding round in November 2015 to raise £1m (with just over £500k committed at that point), Steve Folwell made it pretty clear that you were only interested in hearing from investors wishing to invest £25k+ for new A shares. If you were apparently so loathe to accept smaller investments of less than £25k from B existing shareholders in November 2015 why are you back now? Thanks.
We'll let you know the response.

I think it would not be unfair to say that all small investors under the CC model may suffer the same fate - or worse.


Wednesday, 25 May 2016

Caveat emptor with spiky knobs on - The Crowdcube School of Hard Knocks


Crowdcube's wrecking ball working overtime


Recently we found out that a company funded through Crowdcube had been dissolved but its product was still being made and sold - illegally as it happens under the old company name. None of the investors were informed of what was happening. It was left up to investors to chase Crowdcube for an answer

The response from Crowdcube to this revelation is educational. You might expect a certain degree of concern or even surprise.

You would be disappointed.

Basically they don't care. The company funded, applied to be struck off with the required notices and it seems sold its brand, paid off its creditors and maybe pocketed a nice sum. Crowdcube were paid their commission so the only losers were the Crowdcube members who invested. But hey that's their lookout, the silly mugs,

Life is a bar steward, but anyone over 25 knows this.

What is surprising is that Crowdcube are yet again able to walk away from a situation where their pitch allowed this company to lie about their sales figures - or to put it another way create its own mythical sales projections. There is no way for the public to check these projections. They have to rely on the platform doing some basic due diligence and taking a little responsibility.

Dont forget that this company was one of only 15% that passed muster to be allowed onto the Crowdcube platform. According to Crowdcube. What the other 85% look like is beyond imagination.

QED everything you read on the platform is bullshit. We mean everything.

If you start from this premise, then you just might see a return at some stage in the next 10 years. We doubt it, but you might.

Qu'est-il arrive a Monsieur Notebook?



Hide Stationary raised money for their notebooks - Monsieur Notebook, from 70 investors back in 2014 according to Crowdcube - https://www.crowdcube.com/companies/monsieur-notebook

But the latest AR for the company which has a list of shareholders as of July 2015, has only 4 shareholders. Of course the AR maybe wrong, as they so often are - but that is quite a lot wrong.

In the 2015 AR, it shows that the 4 shareholders own all of the issued shares, including those seemingly issued when the Crowdcube round completed.

In their Crowdcube pitch the company projected profits of over £800k for the 2015. The accounts for 2015, just filed, show a different picture. To be fair the accounts are so minimal as to make any accurate estimate of their profit or loss impossible, but they were not anyway close to £100k let alone £800k profit.

C'est la vie. Just another example of Crowdcube's mismanagement or is there another explanation?

Monday, 23 May 2016

Is Nicola Horlick having a laugh?


We cant make out Nicola Horlick.

She is apparently a director of a new jewellery company called Twelve London, which is raising money on Crowdcube.

Actually we might rephrase that. She is a director of Twelve, which is currently in the running for the wooden spoon when it comes to raising money on Crowdcube. Pretty well zero interest and only a few days to go.

In the pitch headline, Nicola is a major feature but what really does she know about retail or jewellery? Surely she cannot be brilliant at everything?

This company has no product, no trading record, no website and no support, Still it has been 'valued' at over £800k  - now that has to be a joke.

£100k will make its first range, build its website and get it sales. That also has to be a joke.

Oh and Nicola doesnt have any shares in the company, which doesnt appear to have had any investment at all to date.

By the way Nicola, whilst we are talking about you and ECF,  we are still awaiting news on the Glentham Film Fund, the one you funded through Seedrs..  How is that going?

Solar Cloth gets more mysterious

There is something very odd about the demise of Solar Cloth.

In their Crowdcube raise of £960k they had one investment of £500k by a person named as Charles Shale at CH. Who is he? Why would anyone invest £500k in this venture without at least taking a seat on the board?

Recent announcements show that SC had been reorganising. There were press releases about a merger with Base Structures and the original CEO stood down to be replaced by a new one as recently as February this year. Why?

RBS had given them an award - but then that's RBS for you.

To spend all the money they raised, which was £210k more than they needed, in just over 12 months is all a little odd.  

Solar Cloth promise the world and deliver nout. Crowdcube stand by and allow it.


When Corwdcube promoted Solar Cloth with the following, did they really think allowing this sort of hype was sensible?

The Exit Strategy
Exit strategy 
Our aim is to sell The Solar Cloth Company for £100 million in three years' time. This is based upon our target of achieving a turnover of £40 million/year, giving an EBITDA of £6 million, This equates to an investor IRR of 440%, and a 2.5 earnings multiple, which we believe is in line with the Renewable Energy Services & Equipment Industry IPOs such as First Solar, Inc and SolarCity, Inc. Potential buyers of The Solar Cloth Company could be from three sectors:
- Upstream Solar cell manufacturers 
- Power generation and operation companies

- Construction companies
The Financials
These notes should be read alongside the Financial Snapshot
SALES:
We plan to invest heavily in sales and marketing, with over £100k spent on lead generation and branding in the first 12 months.
Key drivers: Sales will benefit from a combination of a higher company profile, increased install base, and intense lead generation activity from an enlarged sales team.
Sales estimates: Sales forecasts of £7.5m, £40m and £48m over the next three years are in line with other new entrants to the photovoltaic industry. A B2C installer of solar panels demonstrated a similar rapid growth over three years of £0.2m, £7.5m and £26m.
Basis of modelling: The company sales forecast has been modelled on industry averages. Sales projections are conservative and within reach of the company structure. A current pipeline of over £4.5m has been achieved with only one full-time sales professional.

Its plain BS and a lot of so called sophisticated investors (Crowdcube's term not ours) were taken in, hook line and sinker. One guy, Charles Shale (is that name a joke?), invested £500k. What a clutz.

The guy behind the pitch, Perry Carol, an industry expert according to the fully vetted Crowdcube pitch, clearly saw this coming and jumped ship in December last year. How is that possible?

Surely time to put away the wrecking ball that is Crowdcube and let professional people get on with using and promoting ECF responsibly. It is possible but certainly not the way they do it. 

Is this the start of the avalanche?


Crowdcube's biggest disaster to date 


Rumour is that The Solar Cloth Company, which raised £960k on Crowdcube in March 2015 has closed.

This is not public knowledge as its not yet up on the CH website but a little birdy told us a letter from the administrators had just arrived. Or was it a mole, sorry cant remember!

If true it will make the previous winner of the biggest disaster prize, Rebus, take second place.

We are waiting for Crowdcube to trot out their usual PRing. Surely at some stage they will have to take some responsibility for this carnage?

More to follow.

PS just called and spoke to Solar Cloth and yes they went into administration last week. They say the changes in government funding for renewables made it impossible to survive.

Sunday, 22 May 2016

Crowdbnk make themselves look very foolish

The New Craftsmen (NC) has been a subject of several posts here - rather too many in fact.


Crowdbnk purports to be a serious platform for serious investors - not the Woolworth type offer you get from Crowdcube.


So we have ask, why are they making such an ass of themselves over this company?

NC raised money on Crowdcube then decided to switch horses and raise another round on Crowdbnk. Having delivered figures some way off their Crowdcube projections, the original raise of £1m to £1.5m on Crowdbnk, which launched in February this year, was very slow. In fact it was so slow that, despite Crowdbnk emails promoting its success at 'over 50% completed', it has never moved from its initial 14 investors. A cunning rouse was for Crowdbnk to reduce the target - to £750k so that now the same 14 investors have achieved 75% of said target.

This reduction came in March, but as of today the same 14 lonely souls are still the only takers. Apparently the pitch has only 9 days left. Given that this must be the nth time it has had only 9 days left I think we can ignore this prompt.

This manipulation and nonsense just makes your platform look worse than Crowdcube's. Either take off the time limit or stick to it - I'm sure the FCA would have something to say about this being highly misleading. Mind you, they might think the same about bringing the target much closer without telling punters that this is what you have done. Reliance on the overfunding button is an issue the FCA needs to address.  




Lovespace struggle to fill up second time around


Lovespace raised a shed load of money on Crowdcube and now they have spent it, they are back for more.

We are not going to bother with figures for this post - what is the point?

Lovespace's explanation for their very poor performance and their very large losses is that they are evolving. Funny that, for the first raise they were very positive that their projections were conservative and more than doable. Nothing wrong with evolving but you cant have it both ways.

If you want to have a laugh just read the responses to the questions in their current forum - they are certainly not short of strategy, business school BS.

This time around the investors are being far more cautious with only a few days to go the total raised is well short of the target. But our money is on a this one completing - it's too large a punt for Crowdcube to let fail. Either extensions, increased equity or a large sum will suddenly materialise and the hey presto the box will be full.

We have seen it all before.  

Typical Crowdcube skullduggery

We have written several posts on Wild Trail. They raised £160k on Crowdcube in 2013 and then failed on their second attempt. They also tried and failed on Asset Match.

In March of this year they ceased to exist - neatly dissolved like an asprin, using a simple voluntary strike off at CH.

However the empty glass is showing considerable signs of residue.

One of their shareholders contacted us to see if we could get some answers - Crowdcube were not interested and the owners had vanished.

The residue comes by way of a site here , which is actively trading under the name of Wild Trail Ltd - the dissolved company. They are selling off the site - the same branded health food bars packed in the same wrappers as before.

So what is going on?

Well firstly the site is in breach of all of the UK's regulations on web trading. It has falsely presented itself as a Limited Company - Wild Trail Ltd - that does not exist and it has no T&Cs. They are also in breach of all the EU regulations (Directives) for on-line selling.

Secondly a little research reveals that this is being operated by a company based in Wales called Brighter Foods Ltd. None of the directors of Brighter Foods were involved in Wild Trail as far as we can see and vice versa.

As far as we know none of the shareholders (via Crowdcube) know a thing about Brighter Foods Ltd. We assume they bought the IP off Wild Trail and maybe that money went to creditors to allow the company to close voluntarily. So now someone is making money out the shareholders capital and the shareholders don't even know about it.

Where are Crowdcube in all of this? As usual , out to lunch.

Despite requests for information they have been left in the dark - not only losing their investment but seeing the brand they invested in in good faith, still 'trading'. One comment on the Crowdcube forum illustrates how ill informed some investors are when it comes to companies. They talk about Wild Trial's administrator selling the IP  - the company was never in Administration. There is talk about this new company as if these shareholders have a stake in it!

What is genuinely disgusting in all of this is that Crowdcube have just turned their backs - they dont want to know. A company that spends £6.3m on its own administration costs pa (2015) cannot take 30 minutes to look after its own investors. They are far too busy preening themselves for the next awards ceremony.  Get a grip boys and sort this out.

Saturday, 21 May 2016

Crowdcube are some way off their own very well vetted targets!



If you ever wondered why it is that Crowdcube never manage to get their pitches' projections even close to what actually happens, then you should take a look at their own development.

Now this projection was a while ago - when they first raised money through their own site, so you might forgive them. Unfortunately their ability to publish realistic projections has probably got worse in the last 3 years - it has to end somewhere.

So the projection for 2014 by Crowdcube on its own pitch, on its own website - clearly fully vetted and verified by the Crowdcube out to lunch department was as follows -

Sales £4.4m with net profits of 3.7m which if I was an investor and I believed a word of it, would be a truly excellent result  - Well Done Lads.

The actual filed accounts to September 2015 show turnover way down at £2.6m and losses for the year of £4.8m. Their GPM has fallen considerably and their running costs have gone from just over £2m to £6.3m. The company has made ever increasing losses, which was certainly not in any of their projections. Unless of course they have put the wrong figures in the wrong boxes. Yes that would explain it.

Another year like that and the Board will be returning to its own trough for a refill. They currently have enough cash (from the last raise) to get through this year to September 2016 if they don't increase their losses like they have year on year to date. Any vultures circling?

So you see it really should come as no surprise that as they cant get their own figures to align, they cant prevent anyone else making them up as well. It's what happens when a couple of marketing guys try to run a business.

Friday, 20 May 2016

MEEM get their cables crossed



MEEM SL Ltd raised just over £700k on Crowdcube in June 2015


Now they have gone into administration. 

This has to be one of Crowdcube's fastest success to failure stories?

Ah but there is a twist. 

A letter sent to shareholders explains that the company had to go into administration, it doesn't say why. But a new company MEEM Memory has galloped into the void to buy the assets of the old one. All the creditors have been paid off, according to the letter, although there is no report yet from the Administrator. MEEM Memory now owns all the IP of the deceased MEEM SL.

Shareholders in MEEM SL are being offered the equivalent shareholding in the new company at no charge, plus apparently a 30% bonus holding. How that works is anyone's guess.

There is no talk of funding or what happened to the £700k put into the old company only months ago.

As you would expect the Crowdcube vetted financial projections bear very little resemblance to the accounts now filed at CH. They never do.

All a little odd. 

Thursday, 19 May 2016

Big slap on the back for ECF Solutions


This what Arena Partners in New York think of working with us - 


''ECf Solutions provided invaluable counsel through every stage of the equity crowdfunding effort we recently helped develop for a major UK client. While equity crowdfunding is simple in theory, it can be difficult to know what will work and what won’t for your specific raise, and how to handle specific aspects of the total ecf campaign. 

That’s where ECf Director Rob Murray Brown's unique expertise and guidance come in. They made all the difference in ensuring a focused and compelling ecf submission.” 

Peter DePasquale, Partner, Arena Partners – a New York based brand development firm that works with numerous SME’s


Wednesday, 18 May 2016

ECF Solutions launches its first client on Seedrs!





ECF Solutions helps businesses create equity crowdfunding campaigns

We are very pleased to tell you that as of a few minutes ago we have launched our first client on the Seedrs platform.

You see we can be positive!

Anyone who would like to know more should contact us via this site or via the ECF Solutions website. We will then send them the link and they can view the campaign at their leisure.

This is not a recommendation or investment advice  - its just a heads up about what is happening.

Tuesday, 17 May 2016

Crowdcube figures are not accurate



Here is yet another example of the information supplied by Crowdcube being inaccurate.

Beara Beara raised £203k at the beginning of 2015.

In the historic accounts given by Crowdcube for YE September 2014, they claimed that the balance sheet had retained earnings of £83,023. This was generated by a year's profit of over £73k plus the previous years profit. 

Since they raised their money, they have filed the actual accounts for this period with CH. This shows a retained earnings figure of only £34,614 - so well under half the claimed figure. So one assumes the profit figure was also wrong. Small company accounts don't allow confirmation but its seems unlikely that a small business just funded would pay out dividends??

The overall state of the balance sheet was around half what they had declared it to be only months earlier.

This is no criticism of the business per se but it does call into question Crowdcube's ability to get the right information to potential investors. They say they are trying but the evidence does not show this.

 

Why some businesses don't draw a crowd


Poor business advice is hindering small companies from raising Equity Crowdfunding


We looked at two examples recently of pitches that are not looking likely to get past their targets.

Why were they doing so poorly?

Dassie Artisan is on Crowdcube and has only  few days left to get to £225k - it has not got halfway yet.

Its a small business importing handicrafts and has sales of over £500k in the last year. It has an enthusiastic team, a reasonable list of large stockists and clear plans about the next 3 years.

They have simply been very very badly advised.

Under the section 'Use of funds', the main reason for raising this capital is listed as increasing the stock holding.

Silence..................................guillotine.....................................head.

No one is going to invest via ECf in piles of stock - unless you are Sir Terence Orby Conran and even then its still unlikely.

I remember the old Global Village, a pioneer in importing the most fantastic artisan made products in the 1980's and I remember its demise. In the end the company had years worth of unsold, useless, rotting stock as each year the buyers piled new lines on top of old ones. For so long as sales flourished, the company was a great success but any fractional downturn meant revenues decreased and new stock couldn't be purchased and the old stock wouldnt sell. Curtains. Guessing future trends is almost impossible and guessing future economics is even harder.

The second company struggling is BlakeLDN. 

A perfectly well thought through plan with albeit small sales has been totally ruined by the most ludicrous valuation, backed up by the most flawed reasoning.

When your sales are £66k and projected to be £99k, why bother talking about revenue multipliers for companies that are raising over $100m, as if they are on the same planet as you. Likewise talking about a previous 'investment round' as an example of the validity of the valuation method, when this round raised just £15k is simply nonsense. It confirms what the initial valuation shows; a complete lack of any understanding of how a business works. This in turn makes the business univestible with a capital U.

So where in both of these instances is the advice these companies need? Clearly it is not coming from the platform. Its a great shame as these two could have raised money with a sensible plan and sensible valuation.

Thursday, 12 May 2016

Syndicate Room raise their own funding



So here we are - Syndicate Room have raised £2.6m of their £2.3m target. On Syndicate Room.


What are we to make of this?

We have a VC investor putting in £1m and turning around the enhanced due diligence its investment criteria stipulates in just 24 hours - according to the site. Some achievement for both SR and Unicorn AIM VCT's.

For some reason SR are not allowed (again from the site) to publish financial data on their pitch. So questions about profitability go unanswered. You can be sure that SR is not in profit - none of the ECf platforms are.

So a valuation of £25m now must be based on what?

Maybe the new development that they are so keen on  - their launch into IPO's. But then the attempts to actually get involved in IPO's to date have been flops. So it cant be that. Must be a belief that they can deliver what so far has been undeliverable -  a large ROI.

I like their Salty the Movie pitch best. How long does it take to make a film? Still waiting for news on this one!

220 investors clearly believe they can.

Crowdcube's masterclass in PRing


Bereft of good news, Crowdcube have managed to spin a negative story into positve PRing.


This is a masterclass in shadow boxing and when Crowdcube go bust, Luke Lang is guaranteed a job in front line politics.

So here's what they have done. 

A while back they made a lot of noise about being the leader when it came to developing the use of ECF for IPOs. Now they have pulled this idea or possibly the LSE has chosen not to grant them a licence. Either way, Luke Lang is to be found telling anyone who will listen how Crowdcube have chosen to avoid IPO's because there is no money in it and the IPO market is sluggish. 

You can accept the second point as being cyclical but the first point just shows that previously Lang was, as usual, just shooting the breeze to catch attention. The fundamental mechanics of IPOs have not changed so Crowdcube clearly got their sums wrong - if they did any.

In the same article, http://uk.businessinsider.com/crowdcube-shelves-plans-ipo-market-economics-god-awful-2016-5, you can find Syndicate Room's CEO rejoicing in the fact that Crowdcube have missed 'his vision'. Luke Lang jabs back that he is afraid for his competitors - what a nice thought! Round 1 to Crowdcube

We think that it would be a nightmare for Crowdcueb to be allowed near IPOs. With their simply appalling record on due diligence and their reputation as the Woolworths of the ECF sector, it would be asking for serious trouble to allow them anywhere near to the official markets. 

So well done Luke for finally getting something right. 

Wednesday, 4 May 2016

Steve Smith leaves Estatesdirect

Estatesdirect funded via Crowdcube in 2014 and then in 2015 claimed it had raised £1.25m on Crowdube


Well it seems that the 2015 raise, although completed on the platform never went through.

The main man behind this fund raising, Poundland's Steve Smith, has now resigned along with another key director. 

Would people have invested in this company if they knew Steve Smith was going to leave?

Probably not.

Where does this leave investors - who knows? Accounts due in August.

So the next time some big mover promotes a pitch on Crowdcube, just remember that they wont hang around if the going gets tough. 

Lovespace boxes may have dodgy bottoms


Lovespace smashed their first raise on Crowdcube in 2014

They raised over £1.5m against an ask of just £600k.

Now they are back for more - only this amount was not scheduled the last time they appeared.

The good news for Crowdcube investors is that the value of the company has increased almost 4 times in just over a year. 

The bad news for Crowdcube investors is that this value is total myth. The company projected sales revenues of almost £2m for YE December 2015. It has delivered just over £1m.

The company projected losses just over £300k for YE December 2015. It has delivered losses of over £1.5m. No wonder they are back for more. 

All this has been achieved using up the pile of extra cash they were given.

We cant see any reason to believe a single figure Crowdcube produce. The only certainty is that whatever the projections,  the company will fall way short of them. 

This box comes with a warning - HANDLE WITH CARE


Early Bird's worm gets caught in late frost

We have written quite a few posts on Early Bird. They have raised around £500k on Crowdcube in two seperate tranches.


The second Crowdcube raise at the end of 2015 was a memorable one. They had to change the offer several times to get over the £300k line, including moving the line closer (use our search facility to see other posts). This was mainly as a result of missing their original Crowdcube targets by many miles. At the same time they were punting their wares on Angels Den. They are one of flightier tarts on the circuit.

In this last Crowdcube pitch - projections to YE May 2016 showed an annual revenue of over £1m. Now a little birdy tells us that revenues for April this year were under £20k for the month. Yes a total of under £20k for the month.

Do the math.

The company claim that all their KPI's are tracking towards or are on target - eh? Someone must have stolen the original goal posts.  

The same birdy tells us that these guys are now moving on from Crowdcube and Angels Den and will be launching a funding round on the not quite crowdfunding platform Envestors....... soon. This new £500k capital raise was never mentioned in the last Crowdcube raise only a few months ago.

All we can say is good luck!


Tuesday, 3 May 2016

Superjam pricing a very sticky mess.


We have been following Superjam since they raised over £300k on Crowdcube. 


Their accounts are due out by the end of this month.

Meanwhile they have a very special special offer currently on their website. Their Blueberry and Blackcurrent Jam has, according to the site, been reduced from £35.88 a jar to just £2.99.

OK so this is obviously a typo. Forgiven.

However if you click through to Ocado or Waitrose you can buy the exact same jar of jam for £1.69.

Maybe someone at Superjam needs to take at a look at their pricing policy - if they have one. This just makes them look pretty foolish.

Waterbabies is finally laid to rest as the winner of Crowdcube's largest flop to date



Waterbabies The Musical easily surpasses Crowdcube's Rebus debacle 


Following the demise of Rebus recently, most papers reported that the loss to Crowdcube investors at around the £800k mark, was the largest loss in the short history of equity crowdfunding. As we pointed out at the time, this was incorrect.

Waterbabies raised £1m on Crowdcube, according to the platform. There has been some debate as to whether they did in fact raise all £1m, but Crowdcube claimed they did.

The liquidation has rumbled on but has now completed its final meeting and the company will be dissolved in two months time. Total debts £1.25m  Some way better than Rebus.

The only winner here has been the liquidator, emptying the bank account of the company's only asset, its £12,000 in cash.

Flavourly reviews are still appalling

Flavourly have funded on at least two ECf sites in the past 3 years.


In the interests of fair play, we wanted to give Flavourly a chance to get some good reviews - previously as reported here they have been very poor.

So it came aa a shock to look at Trustpilot's opening page for them and to find that 12 out of the 20 most recent reviews are 3 star or less. With comments like 'Do Not Use' the one star ratings are numerous.

What is it about customer service that this company simply cannot understand? Shareholders really should stick their oars in the get rid of the current management. Good reviewers like the idea and the main complaint is not about the concept but the atrocious customer care.