Tuesday, 8 May 2018

Vibe Tickets goes under but bobs up again whilst Crowdcube shareholders have been left to drown.



Addenedum - 


Before reading this you should know that the founder Luke Lang has now agreed to give all Crowdcube investors free shares in Vibe Tickets, to the value of the ones they have lost in Thevibe. This is a bold move. We wait to see when these shares are issued and transferred. Of course there is still the matter of o/s creditors but we will have to wait and see what happens there. The query over the change in name has also been addressed - it now shows all ten of his companies uder the same name. We like to think that it was our pressure that has resulted in this offer - an offer which was not on the table when we wrote this piece.  

Evening all. TheVibe, run by Luke Anthony Massie,  raised £608k on Crowdcube in late 2016. Now we are told the company has gone into administration. But odder still, a newco Vibe Tickets Ltd, with sole owner and director being one Luke Massie, was formed in December 2017. It now appears in the footer as the owner of the ticket exchange website although the T&C still refers to TheVibe Ltd. Confusing eh?


I suppose the first Q is why would you use a different form of your name at CH? If you look Luke up under the Thevibe Ltd page, he has no other directorships. Cant CH and Gov see that this is just asking for trouble? He hasnt broken any laws but he certainly wouldnt get the Medal of Honesty, even under Trump's administration.

Crowdcube SHs own shares in TheVibe Ltd. Massie owns all the shares in Vibe Tickets. So what is going on?

We messaged Luke on Sunday to ask him what was up - this was his response on Sunday at 2pm -

Rob, Thanks for your message. I’m glad you’ve got in touch. I’ve wanted to communicate fully with everyone concerned after recent events but I’ve had to follow legal advice to protect all parties involved moving forward. Please believe me when I say it’s not in my nature to sit back while people look for answers and I am doing all I can behind the scenes to get permission to speak publicly and explain the situation. If you can bear with me for the next 24 hours I will be in touch directly, whether I have permission or not, to explain my position. I’m confident you will understand why and how we’ve reached the point we’re currently in. I apologise sincerely for not being able to be more pro-active with our communication. I’d hoped this would work out differently but, despite all the will in the world, I’ve just not managed it. I’ll be in touch again soon. Luke

What he hoped to achieve on a Barbadian style Bank Holiday weekend, is hard to fathom. Also you have to remember that the letter from the Administrator had already been received by SHs - so what is so secret?

Well now we know; he didnt message us but a SH did. 

Behind the scenes Luke has been cobbling together a phoenix. He claims the business got into trouble because backers didnt come through with £1.6m, although he later says these backers are still available to the newco. Apparently his shareholder agreement - the one he created, doesn't allow him, the major shareholder, to issue new shares without the consent of all the other SHs. That's odd. 

The whole thing reeks to me. 

In his email to SHs he says of the future - 


What's next?

My immediate focus now turns to ensuring that there is a smooth transition period for our colleagues, suppliers and all involved with Vibe. Once everything and everyone is safely across, my attention can return to approaching those supportive investors I have in raising capital to support the new vehicle. There are tens of thousands of users that rely on Vibe each month and millions more consumers out there I know Vibe can help. I am not willing to give up on this fight.


The mission has only just begun, what we set out to do has only just started to be realised, I am excited at this next chapter.

Yet even though he has bought the assets of Vibe for a price above other SHs, who also bid, he didnt have enough money to put into the existing business - £150k would have cleared immediate debts is what he says. This is all looking very dodgy. He makes no promises about Vibe SHs being given a part of the newco but does say all creditors will be paid off and that there will be some spare cash to pay back to SHs. You can deduce from this that he is paying more than £150k; stated above as the debt. So of course then the Q is why didnt he put this into the original Vibe? The answer is obvious - a falling out with his major SHs (see below)  -   which it would seem, has been ongoing for sometime as he set up the new Vibe in December 2017, when he hatched this plan - ? 

TheVibe has had some great press, talk of multi million pound deals litter the internet and in January this year Luke was featured in the Forbes Top 30 under 30 List of exceptional entrepreneurs. As you can imagine this information was supplied by Luke himself on the company blog. The Crowdcube pitch was filled with jam....tomorrow. Richard Branson as always makes an appearance with Luke in the pitch. The Virgin Start Up and Virgin Media brand is seriously tainted - wake up Ricardo. Come out of retirement and see the sort of cr1p you are promoting.

Not many months ago, Vibe received endorsements from tech entrepreneurs Scott Fletcher and Matt Newing in the form of a further £750k investment. At that time Vibe told Insider Media that they had offers on the table to complete this £2m round - see here. Things were lined up to go stratospheric. This is in fact where the wheels came off.

When the last round funded a few months back, the valuation was on the rise, up from £5.5m on Crowdcube. So this is yet another example of how flawed the Beauhurst CAGR valuation measure is. The real value of Vibe would now appear to be near to zero. But on Beauhurst's measure Crowdcube would be claiming investors have increased their asset value in the company.

It really must be very frustrating for investors to put their money into a business like this and to end up here. Thanks to a lot of hard work one imagines, Vibe has received great PR. For anyone looking at it from a close distance, it and Luke Massie seemed to be blazing a trail. Shareholders then receive a letter from Cowgill Holloway, which tells them their company has gone into administration. Nothing from the company and nothing from Crowdcube. Meanwhile Luke the founder is busy forcing through what is his vision of the future and coming out with the newco and all the old co's assets.

Where did all that money go?

As Luke points out in his SH email, he was advised by his lawyers that he had to stop thinking of his SHs and start thinking of his creditors. So CC SHs really had no chance. Isnt it time this situation was reviewed if we are going to successfully grow ordinary people's access to equity stakes in SMEs? Maybe if more people realised that the tab for this mess is being picked up not by the investors and not by the founders but by your taxes, we might get some action?

Luke you didnt think this all through. Your name is now a target. Good luck trying to tap your investors again.

9 comments:

  1. Interesting and presumably the money was spent on attempting to make it work, but it didn't so far.

    Just FYI, I have seen shareholder agreements that do not allow the major shareholder to issue shares without approval from all the other shareholders. So that could very well be true.

    It can be very annoying for the founder / management, one shareholder can hold the whole thing up or even stop investment, I have experienced this personally and would be very careful next time. Sometimes its better to refuse investment if the terms are restrictive, but as a first time entrepeneur or if you have no legal advice its easy not to realise that.

    So I think that may well be true and reconciling existing shareholder blocking of new shares with the terms of the new investment could be impossible.

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    1. Yes agreed it is possible but only if the founder agrees to it - and to be brutally honest you would have to be a halfwit to do so. Whatever, he admits he had enough cash to buy the assets and that this cash was enough to keep the old co afloat. So QED he may have engineered this whole mess to off load investors. Maybe he isnt such a mug after all but he is certainly something else!

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    2. I think Seedrs have automatic right to approve / deny new share issues as a default in their shareholder's agreements!

      I think it's fairly common for new entrepreneurs to agree to this, I know I have nearly become unstuck in similar situations.

      Careful management of shareholders to make them understand what you are trying to achieve should help, but yes in future I certainly am on the lookout for these provisions and would try not to agree to them.

      But sometimes they have been necessary, either that, or no investment.

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  2. His first business was a company cold calling trying to sell people PPI .... what did you expect. Once a con man, always a con man.

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  3. You've all gone very quiet since Luke has done the right thing by the crowd.

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    1. Please enlighten us - what has he done for investors?

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    2. Ah - contacted Luke ad he sent me the article. SHs have not received anything yet so dont jump the gun. If all this money is slushing around just begging to go into the newco, then why couldnt it save the old co? There is more here for sure. But he's a slick operator.

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  4. I'm sure you'll be keen to point out to everyone how awful the founder is, but a lot of people feel this is classy:

    "I’d like to offer you equity in the new company I set up to carry on Vibe’s mission. The intention is to offer you ordinary share capital in Vibe Tickets Limited and your allocation will be proportionate, subject to rounding, to your original investment in TheVibe Limited. These shares are a gift from me personally and you will not be expected to pay for the shares themselves"

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    1. We cant really carry on this chat with you as anon - name yourself or we wont post more of your comments. We have told Luke that we will write this up if and when he comes good on this promise - a promise that in our opinion would never have seen the light of day without our pressure. Ask yourself this - why did he set Vibe Tickets Ltd - the company that is now to purchase the assets of the old Co, in December 2017? And what about the creditors - will he pay them as well?

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