Sunday, 21 January 2018

Berrywhite are making a mockery of the FCA

Berrywhite have been trying to raise £150k on Crowdcube for ages. Now looks they will succeed thanks to some highly dubious marketing on Crowdcube's platform.

Berrywhite were never going to make it. they have rasied money before and delivered nothing close to what they have promised - this blog is full of them. They have extended the campaign at least once and reduced their valuation but it was stuck. Until they came up with this - posted yesterday

Bonus shares for the next five investors who invest £5K or more

awmjennings 1 day ago
7 Replies
So far we have raised £126,140, so we are still short of our target by £23,860 and our deadline is midnight tonight.
So the next five people to invest £5K or more up to a combined total of £25K, I will double your shareholding by gifting you some of my personal shares.
Please note that the shares that I gift you if you invest will not be EIS shares.
Andrew Jennings
Managing Director
Berrywhite Limited

Some of the responses - 
You should have listen to investors feedback weeks ago on having a justifyable valuation to avoid this last minute incentives.
Best wishes
Dear Mr Bean, We listened to you actually and we did reduce the valuation:
New update from Berrywhite Natural Drinks raising investment on Crowdcube. Capital at Risk.
Is this allowed and is it legally binding?
This essentially creates a two-tier pitch. Those paying more are buying at half price. I never saw this on crowdcube before.
Finally, what about investors who already invested over 5K before this point. It would be unfair not to give them the same deal as this would be the same as changing the valuation of a pitch halfway through but only applying it to new investors.
I think we need a crowdcube ruling on this offer.
Moreover I am none the wiser as to why and on what basis second extension was granted.
I have cancelled my token investment.
Best wishes and good luck.
Dear Charles,
Thank you for your comments. We will contact Crowdcube on Monday and raise your concerns.
Best regards,
I will pull my investment if its not confirmed that all investor in the same round are "pari passu".
I agree with comments above the right valuation from the start would have gone a long way to getting this round funded quickly. Focus on revenue growth and EBTIDA ... valuation will follow along.
Same thought as cube_charles_murphy
Are there any learned friends, with expert knowledge, who are able to comment ?
Similarly I trust the CrowdCube compliance people had a say BEFORE the bonus offer was put onto the site and formally concurred it.
Crowdcube Capital Ltd is, as it says on the website footer, authorised and regulated by the FCA.
So it seems that despite the total having shot up to 92%(from 80%), people are not happy. Do Crowdcube really think this is a sensible way to carry an FCA regulated trade? Surely not - even they must see this for what it is. 
Monday will tell....................

Friday, 19 January 2018

Having your Cake but not able to eat it? Crowdcube land another dud.

Cake has now agreed sales terms with a US organisation, returning shareholders $1.40 per share. This price, which is not yet guaranteed as it is subject to the buyers future approval, represents a substantial loss for Crowdcube shareholders.

Cake took £1m off Crowdcube investors in 2015. Now the founders, Charlotte and Michelle, have agreed a deal where they get a substantial return but investors are losers. But at least they can laugh about it.

This is a deal that gave shareholders no choice - they were not even asked; just told to sign away their shares. So much for the rights of A, B, C or any minor shareholder when founders decide it's time to cash in. And of course the poor old shareholders have to take another big hit as their EIS relief is now invalid and will have to be repaid. Thanks girls.

The US purchaser is unnamed. But the price agreed is around £9.7m or $13.2m. Back in the summer of 17 Crowdcube and the founders backed a valuation of £11.5m. The £9.7m has also to cover some outstanding debts. We had something to say about that then - here 

I know people who used Cake and loved it.

The founders are smiling as the investors, who allowed them to make their profits, sit with large losses. Oh well, caveat emptor or you could take our advice in future. Worth remembering these two as we think they will be back for more!

Thursday, 18 January 2018

Crowdcube companies' results are serious cause for concern

Meet on VC raised £200k on Crowdcube in £2014. Their projected profit for the last year was over £3m. They recently filed losses of £330k and their balance sheet is short of almost £400k. They have no function.

Apparently they changed their name to Close, according to the Crowdcube webiste. Which is almost appropriate.

Their website is 'coming soon' but we doubt that. They have 72 followers on Twitter and last tweeted in 2015.

In the long list we are compiling, of companies filing accounts recently, that have failed to come close to expectations, they are close to the top of the flops.

The Crowdcube pitch tells us that they aim to have revenues of £18m by 2017 and a value of £35m. Philip Marshman, who headed the pitch, left two years ago - once he had spent the cash. How can you have what Marshman describes as a software platform without a website or any SM presence?

Just add the D and be done with it.

Crowdcube start 2018 as they intend to go on; with yet another sad story of failure

Angelberry have been defrosted. The took £200k off Crowdcube investors in 2014. Now they have for first time since, communicated with those investors to say Goodbye, Cheerio, So Long Suckers.

This is another one we called - see here

Here is the full text of the first and final communication from the Angelberry founders - the opening line is quite brilliant! The rest is quite sad and just shows what an utter load of kack the idea these guys had, was. The sums mentioned are highly doubtful!

Before you get stuck in, we will have some good news in the next few days about a pitch that we have been helping and that we feel is worth taking a look at. So watch this space. One thing for sure is that it doesnt include any fraud.

This a summary of what follows -

Hi Suckers -

We have spent all your money and so will closing down now.

Your money helped us travel around the word for 2 years and have a ball.

None of the plans we mentioned to you on Crowdcube worked. They all came to shit.

So until the next time, so long Suckers. 

Hi All,

Sorry for the delay in this update, it’s been a tough couple of years and we have unfortunately had to take the decision to close AngelBerry ltd due to a lack of growth and profitability.

To give you an overall view of what we have been up to please see below.

What did we use our CrowdCube Raise on?
- Used our CrowdCube raise to buy our trade show stand, which we then shipped to Trade shows in Mumbai, Paris, Johannesburg. These shows were planned to recruit and sign up new Master Developers after our initial success in Dubai
- We had several strong leads, but we could not find anyone to take on the Master Developer licence for anywhere in Europe or India, which was our main avenue for growth as per our business plan
- In Johannesburg we signed up one franchisee for Richards Bay (North of Durban). No one wanted to take on the Development rights for any other African countries. We had hoped to find developers for Mozambique, Botswana, Kenya and Nigeria
- Our new office staff hires that we took on pre-funding were eventually let go once the shows had taken place and we had not secured any MD’s. Without the planned income from the sale of new territories, or cash flow and funding was massively decreased

- When we raised, we had contracts in place for stores across the GCC – 80 stores in the coming years. We were expecting big growth and store numbers from our UAE developers, however they did not stick to the agreed store schedule, nor did the expansion into Saudi Arabia or the rest of the GCC happen as promised and contractually agreed upon
- This lack of growth hit our potential to grow further as development overall was slow and showed a slow return to potential franchisees. Our master developer was not keeping to their agreed schedule because of a poor return on their investment from the first two stores
- Due to their failure to open more stores and deliver on their promises, including payment for stock and royalties, a level of distrust built up between us and our UAE MD’s – they stopped all communication in 2016

South Africa
- Our franchisee signed from the Johannesburg trade show opened her store in Richards Bay in October 2015, and was then closed by our MD’s in March 2016 due to repeated breaches of her agreement, failure to pay royalties, failure to pay for stock, failure to maintain correct and true records and repeated failure in food hygiene standards
- The expected NuMetro cinema expansion did not take off due to low sales volume, they currently have one location open in Pretoria. James met with the directors to discuss continued growth and roll out of the kiosk, but due to low sales and a relatively high build cost per kiosk they did not want to continue the roll out
- We put a lot of effort into trying to secure the Food Lovers Market deal with our SA MD’s, after running 5 trial stores across different demographics and store layouts (Cape Town Food Lovers Eatery / Food Lovers Market Nelspruit / Caltex Cryildene / Caltex Fresh Stop / Caltex Louis Trichardt ) the sales were not strong enough after our 6 month trial and did not return the required level to warrant a roll out across their stores for the footprint we needed. Even running smaller kiosks in the Caltex stores did not get us to the right level. We also tried to increase revenue through diversified products including freakshakes, waffles and donuts
- Because of this, our planned partnership with FLM did not transpire and there was no national roll out. Our plan for an AngelBerry hard pack product on their shelves did not come off either due to the unsuccessful trial stores

- Our MD sold to someone local 2 years or and left the country to focus on the South African development

- We didn’t get the required number of master developer sign up during our initial trade shows which stunted out growth projection, causing us to pivot and look for commercial opportunities instead
- Without MD’s or franchisees signing up, we didn’t have the required cash flow to move forward and as a result we needed to take on more investment, this enabled us to keep the company afloat whilst we tried to secure the FLM deal
- We had to sell our city centre location to help keep the company going, in additional we raised an extra £170,000 internally
- In September 2016 we had to close our Imperial Park store due to the rent review resulting in a rental increase from £17 per sqft up to £35 per sqft making the store unprofitable, and as a result we executed our break clause
- Despite extra funding, new product launches, new menus and new branding, we could not increase the franchised store revenues enough due to the seasonality of the product
- We focused on growth which required funding to keep us going, and as repeated deals did not come off and the funding ran out, we are left with no option but to close AngelBerry Ltd

We put everything into growing the brand and company, expanded into overseas territories, negotiated with supermarkets, cinemas and service stations and gave it our best shot. We are extremely proud of what we achieved, unfortunately the required deals did not materialise and after 5 years of trying the planned development and growth of AngelBerry did not come to fruition.

We apologise to all of our investors but thank you for your support and belief in us.

Kind Regards,
James and Ryan

Wednesday, 17 January 2018

Rushmore results give little clue as to what they are up to.

The Rushmore Group was suppose to run a chain of night clubs. Seven years after taking £2m of Crowdcube investors we are still waiting.

We have written about them here.

Their latest accounts just filed, show all of their assets sitting as debtors - most of this figure being amounts owed by group undertakings. Over £2m is accounted for here.

Of course if Group undertakings dont repay this debt, then the money is gone as is the company. 

We couldnt find any group undertakings and like the night clubs it all seems a bit of a mystery. 

Crowdcube embarrass us all with their latest update.

Crowdcube's new headline figure of £130m is the amount of money that people might have invested on their platform. Not what they actually invested.

Crowdcube's latest PRing fest takes the use of fake news down into the swamp. £130m invested in companies using the Crowdcube platform are the headlines. It is simply not true.

Well that all depends what you mean by the word 'invested'. We would have said that was pretty obvious but Crowdcube have reinvented its meaning. When they use it, it means 'pledged' for a short time. In our book the two are a long way apart unless you wish to purposefully mislead. Something that would clearly not be acceptable on a FCA regulated platform. 

The real amount invested or in other words, the real amount that pitching companies took away with them to use in their businesses was (according to a not headline figure from Crowdcube) only £90m. This £90m was only up by 10% on 2016, whereas the headline figure of £130m was up by 19%. You can see why they do it. 

So what is this £130m? Well it's the same as say Carillion issuing a statement (a bit late now) stating that their total revenues were XXXXm, for us only to find out that this figure represents the total amount of business they pitched for. Only 75% was in fact real income generating business. Crowdcube have added up all of the money pledged on all of their pitches - successful or not. To look at it another way, we know we are right as Crowdcube's revenues from their successful pitches were only £4m and that did not come via £130m invested. On what is now a commission of 7%, this 4.4% for the last year seems an extremely poor return.

It is highly misleading and idiots in the press like Crowdfund Insider just lap it up. Sadly it proves that despite all the claims and the new CEO, Crowdcube are still embellishing the facts and using whatever it takes to make money and mislead.

The only good news for Crowdcube investors here is that the figures for 2017 were marginally better than 2016 and that the company will only have lost another £4m - unless they have let the costs slip. After all their PRing, it has not been the year they promised 12 months ago. But they are still open for business unlike so many of the companies that have funded via them. 

Monday, 15 January 2018

Good news for Tandem

Tandem Money (ex Bank) has regained its banking licence by buying up the Harrods Bank.

Tandem Bank raised £2.34m on Seedrs in 2016 - alongside £22m million from an investor network. Unfortunately last year the company lost its banking licence when the deal they thought they had with House of Fraser fell through. Then they removed the word bank from their title and replaced it with money.

So now that they own a loss making bank, what's up? 

Progress apparently. Well, we will just have to wait and see.