Sunday, 26 November 2017

We team up with Syndicate Room The Due Diligence Guide for Investors - out now for free

Well here it is - the new and only guide for investors in the SME market, explaining how best to carry out Due Diligence before you part with your cash. Download it for free here

The guide, written by this blogger and updated on line as new information comes to light, is a very quick but comprehensive help to carrying out DD. If you dont bother with the DD, then you are a fool. And you are not helping anyone. In doing a good job on DD you can help the company you are interested in and that in turn that will be a help to UK plc. The last thing we need is a whole raft of useless companies soaking up the investment offered by ECF. Anyone familiar with this blog will be aware of that!

We have called many of the failures that we now see - when they were pitching for your cash. Read this guide and it will help you do the same. Filled with examples (anon but real cases) it's a quick overview reflecting 35 years of business experience alongside one the UK's best ECF platforms.

Thursday, 16 November 2017

One Rebel raise £4.8m causing Crowdcube investors considerable dilution

One Rebel - a company trying to set up a chain of health and fitness studios, has saved itself in the short term with an injection £4.8m of equity capital. At a valuation of around £11m, this round is well below the Crowdcube valuation from 2015. 

One Rebel has taken £4.5m off Crowdcube investors to date in two separate rounds, in 2014 and 2015. They have never come close to any of their projections or planned openings. 

Apart from this being a down round, the dilution that Crowdcube shareholders will endure will not be much of a Christmas Gift.

This sector has been swimming in cash recently with Piper backing the Frame studios (2 currently) with £6m. 

Yet another Crowdcube success blows up

Universal Fuels took £50k off Crowdcube investors in 2012. Now it has gone into Administration owing creditors over £600k with little hope of paying any of it off.

We just tell the facts - we dont make them up. 

This company, which we warned investors about during their pitch in 2012, has run up large debts. It may not have taken much off the 2012 investors but it has off trade creditors. 

When the administrator looked into selling off the company assets, they found the company in a bit of mess, with worthless contaminated oil and false debtor lists.

So as we have been saying all along, Crowdcube are, by helping this type of outfit fund, helping to ruin UKplc. How many other companies will be forced into administration because of these bad debts and how many laid off staff will suffer depression and soak up NHS funds, we may never know.

One thing we all know, Crowdcube are responsible despite their lawyer's claim that nothing is their fault. Without Crowdcube and the fake financials their platform promotes, this company would not have been able to rip off £600k worth of creditors. 

Wednesday, 15 November 2017

Rentify finally file accounts showing they are blushed with 'success'

Rentify helped themselves to £1.3m on Crowdcube, at a valuation of around £20m, last year. Their latest accounts to YE DEC16, filed late, have them technically insolvent with a large hole where projected further investment was promised.

We read recently that this blog is primarily for bashing Crowdcube. Well that only tells part of the story. All we do is follow the pitches that fund on Crowdcube - the news here is only 'bashing' because those are the real results these companies are producing. Unlike some others, we dont manipulate the numbers.

Back to Rentify. They made a £2m loss for the year, which is in fact better than the projected £3m loss. However the problem starts when you look at their funding. The £6m of new equity investments shown as coming in 2016 has not appeared and the company has so far in 2017 managed to raise not a penny.

We have warned about this type of thing on numerous occasions. Promises of future large funding events are more often than not a smoke screen for something well worth avoiding. The future of any business is entirely reliant on its liquidity. Rentify dont have any. The company has lost 4 of its Directors this year - another big red sign to stay away. One of them was Simon Grice who founded Ineed - another failed Crowdcube company.

Rentify is backed by Balderton Capital, one of Crowdcube's main backers. Any patterns appearing? Maybe they will shake their money tree once again.

Crowdcube's handling of Ethos Global Fiasco is a disgrace

Crowdcube have hung their Ethos Global investors out to dry with a deal that benefits nobody apart from the founders.

Crowdcube investors put over £700k into Ethos Global - a Cambridge based yoga studio. Now Ethos is being liquidated, the founders have come up with a cunning plan. They set up Soma London England, to run the new London studio. This new studio was paid for and opened by Ethos. The liquidator has yet to rule on this sleight of hand but Crowdcube seem to have accepted it. Ethos owed over £7m, around £6m of which was shareholder capital. Their only assets were in London.

In the original CC pitch, Ethos sold 15% for the £700k, valuing itself at around £4m pre money. Now shareholders have been offered a take it or leave it deal by Crowdcube and Ethos - shares in Soma to replace those of the liquidated Ethos company. The deal is only open for a short time to pressure investors. They are offering 7% of Soma, a company with little trading history, no accounts, no capital and a potential court case hanging over it's founders, in place of the 15% they owned in Ethos. So Crowdcube have agreed with the founders that Soma is worth over £8m. Sure.

The deal is, you either accept this total nonsense or you get nothing. Meanwhile the founders walk off with the assets paid for by Crowdcube investors. As the shares are held in a Crowdcube nominee account - they owe a duty of care to act on behalf of their clients - the investors. Well the investors are not paying them anything but are Soma?

In the email from Dr Theo, one of the founders, he talks glibly of raising £200k in the next few days and then raising VC money next year. What is he smoking? Why would any sane investor give him a penny?

We would be amazed if the founders are not handed out a banning order by HMRC and also bemused if something isn't done by the FCA about Crowdcube's part in all of this. The reason that Ethos failed was because their Cambridge landlord was owed a large sum by the company and put them into liquidation. A sum that at least in part we estimate, dated back to before the Crowdcube pitch but which was not revealed to investors in the pitch. Essentially the company never had a pray.

Hung out to dry with brass knobs on.

Tuesday, 14 November 2017

Has Crowdcube's Oval Sound gone pear shaped?

Oval Sound were on Crowdcube trying to raise £500k. The campaign is (was) a disaster with only £5k invested (a CC term)  and has now vanished, with 16 days on the clock.

See here -

This may or may not have something to do with the fact that Oval raised a whole load cash on Kickstarter and have yet to deliver anything to most of its supporters. The KS page makes for interesting reading. Here is one from 3 November - excuse the language!

Bunch of thieves can’t even deliver after two years their promise useless company and crowd founding again your having a fxxcking laugh hope it flops and that you end up bankrupt useless useless

Whatever, the Crowdcube campaign is now in private mode, although its not private due to some glitch within the CC system.

I suppose with the laughable attempts to sort out Brexit, we shouldnt really be surprised that we get ourselves in such muddles. This is yet another Crowdcube farce. A transparent one. 

Twenty Something London appears to be nothing

Twenty Somthing London raised £156k on Crowdcube two years ago. A donkey in a boat would have been a better bet.

It's timely that just as we launch our DD guide with Syndicate Room here, yet another Crowdcube disaster is sinking or is sunk. 

TSL have failed to file accounts due in June 17 and are now 2 months into a compulsory strike off - hell they cant even close in an orderly fashion. 

They are one in a growing number of late filers but we feel given the inaction to stop the GAZ1, the lack of any filings for 12 months and a FB page with no posts for over a year, this one is a goner. 

Question is, can donkeys swim?