Thursday, 23 February 2017

Epic Equity Crowdfunding veteran Red Advertising struggles on

Red have raised 4 times on Crowdcube - that has to be a record. On all four occasions the projections they have presented have proved to be pure fantasy

According to the latest projections that they used to raise money on Thincats, their last YE May 2016 would show a small loss of £45k - a turning point with the following year in profit. 

Reality has set in.

The losses for 2015/16 were 10 times the projected figure presented on Thincats. If you look back over the Crowdcube projections, they should be making profits already of well over £2m PA.

During the 2015/16 Thincats negotiation this message was supplied by Ben-Hur to a query about the company always missing its projections - dated Dec 2015 -

This loan is also alongside an equity round and helps us reduce existing shareholder dilution whilst reaching the objectives.

The situation now is very different in that we are in a very strong position. Our technologies are tried and tested and we are securing major blue chip accounts.  You would be very impressed, we have come along way.

            In relation to forward projections, we are already ahead of budget and they represent realistic               figures including recurring revenues. 

So even heroes can get it wrong. The sentiments here are echoed in various Crowdcube forum answers over the years.

Insolvency would seem to be on the cards despite the statement made by the Company Director on the accounts under Going Concern. The recent capital raise of just around £210k only covers half of the YE accounts shortfall. Its is certainly getting squeaky time tight.  

You have to admire the perseverance. Lets hope that as in all great epics, the hero evenetually wins through. But then again those are just films and very far divorced from reality.

1 comment:

  1. Jesus, their website is terrible. That after all that equity? Shameful. The deluge of information on the home page is a sure fire way to turn interested parties away. This is a company that specialises in PPC and hopefully advert optimisation yet they fail the basics themselves.