Tuesday, 28 June 2016
More good news for those investors who put money into 'Salty' via Syndicate Room in 2014.
Olga Kruylenko is to play the main female role.
So despite some dealys in the schedule, the film crew is now in Chile (not Thailand as originally planned) and has started filming or almost started filming. Release date TBC
Wednesday, 22 June 2016
Droplet raised over £500k on Crowdcube in 2015 - valued at around £4m pre money.
This year they tried to raise more on Crowdcube but the pitch was pulled very early on - we wrote about it here. Now they have launched a new pitch, this time on SR raising £433,000 at a pre money valuation of just £3m.
Firstly hats off to SR for being the first platform to have a pitch where the value has reduced since its last round.
The pitch on SR bears little resemblance to the figures given on Crowdcube in the first raise and even less to those given in the pulled CC pitch only 3 months ago. Because SR have chosen not to compare like with like, its impossible to make any judgement but that in itself should ring some alarm bells. The pulled CC pitch had revenues for 2016 of £400k and the company said it was raising a total of over £3m in equity finance this year.
The name of Crowdcube is not mentioned although there is reference to crowdfunding - but not to the pulled campaign. we would certainly want answers to these points.
Monday, 20 June 2016
Crowdcube need revenues of over £6m just to cover their costs.
Crowdcube's last accounts, showed they are now spending over £6m a year on administration.
So if they are charging on average 8% per successful pitch (a figure which probably optimistic), this means they have to see around £75m of pitches funded through their site before they get close to making any money.
Just as a snapshot, the site today has an estimated £3.76m of successful pitches sitting on it - ones that are over funding and ones looking likely to succeed. Annualised, this would return revenues of just £3.6m. Way short of the required number.
You have to ask, how is it ever going to make a profit?
Friday, 17 June 2016
MEEM SL raised over £700k on Crowdcube only last year - we have already written about its strange demise on here.
Now we have had sight of the final Administrators proposals for its winding up - which as pre packs go makes for interesting reading.
This was a company that put itself into Administration and then offered to buy itself out of administration - nothing too unusual about that. However the figures involved give us cause for some concern.
According to the documents, MEEM SL had debts of -
Employee liabilities under TUPE £830,000
The agreed deal whereby MEEM Memory, as an associated party, is for MEEM Memory to buy all of the old company for £185,000 (used to pay off some creditors) and take on the liabilities listed above of just over £1m. apparently according to the administrator this is the best outcome for creditors.
So MEEM Memory starts its life with a over £1m of creditors. This, dont forget, is a company that could not as MEEM SL raise anymore capital (according to the Administrators) and had to go into Administration. As the Administrator's report states, it is pre revenue.
Ignoring the obviously ridiculous valuation that MEEM SL attached to their own IP when they raised money on Crowdcube, the loss of £700,000 in cash in 12 months, MEEM Memory appear to be starting with a large noose around their neck. Why if MEEM SL couldnt pay the creditors does the Administrator think MEEM Memory can?
The IP of this compnay was self valued at £855,000 by the management. In Administration the real value of the IP was put at between £30,000 and £140,000. How on god's earth is that possible?? And yes you have guessed it, this £800,000 valuation appears on the carefully checked pitch figures given on Crowdcube
Shareholders have been offered shares in the new co, which it seems reasonable to assume they will take up FOC. This will clearly also burden the new co with a shortage of usable equity to finance its precarious position.
All pretty odd.
Thursday, 16 June 2016
Vulpine raised over £1m on Crowdcube at a valuation of over £6m.
A little birdy has told us that the projections may now have turned out to be wildly optimistic.
Unfortunately we cant go any further as we cant verify the information - so is there anyone out there who wishes to tell us what is going on??
We have had a second very odd message which is about Vulpine - odder than the guy above even. But again totally unverifiable. Anyone out there with information??
Wednesday, 15 June 2016
Solar Cloth assets have been sold by the Administrators and shareholders will see no return
Crowdcube's largest failure to date, where £1m was invested, has been wound up by Administrators with the company assets being sold off. The buyer is as yet unknown.
A sad ending to very sad tale.
None of it Crowdcube's fault of course. Its ironic that it comes on the same day that someone else was in the news saying that whatever happened, he couldnt be sure that it did happen because he wasnt there and anyway it wasnt his fault if it did happen and he doesnt want to blame anyone, even if it did happen.......anyway. Right? Got that ?? Good. Lets move on shall we.
Tuesday, 14 June 2016
Tidy Books Europe Ltd raised £125k on Crowdcube in 2013
Last year they tried to raise another £150k but failed.
So we have a projections used for last year's attempt to compare to the real accounts just filed for YE August 2015. Needless to say the filed accounts bear absolutely no resemblance whatsoever to the 2013 projections. But you'd have guessed that already. You would also not be surprised to know that in 2013 they had no plans to raise more money and thereby dilute shareholders.
What is more alarming and if you read this blog you will know it is becoming almost an everyday occurrence, is the fact that the historic accounts to YE 08/15 produced by Crowdcube in last year's pitch, are not the figures that have just been filed at CH.
So here we are again - yet another pitch with figures that are purported to be 'actuals' and that have a material bearing on the investment pitch - where the figures are wrong. If some figures were wrong one way and then others the opposite way, then you could just put this down to either stupidity or laziness. But no, the differences are ALWAYS making the companies' positions better .....never worse.
Monday, 13 June 2016
Shopwave stated it would raise an extra £1.4m in 2015, as part of the Crowdcube pitch.
In a typical outcome for Crowdcube investors, Shopwave, which raised £340k on Crowdcube at the end of 2014, has not raised the required extra capital.
So a business plan that was dependent on this working capital has proved total nonsense.
Clearly promises of cash that do not materialise have a very serious detrimental affect on the business and its profitability. Why do Crowdcube continue to allow this practice of companies promising new capital, when all the proof shows its just made up to entice CC investors now.
Wake up everyone. You are acting like complete mugs.
We are trying to find some good news for Crowdcube's massive army of supporters.
It's proving very very difficult.
Hubbub raised £400k last year on the platform. Both their historic accounts, as published by Crowdcube and the infamous Crowdcube projections have proved to be fantasy.
You can sort of forgive the projections - hell you'd have to have been asleep for the past 5 years not to know that all CC projections are a joke.
However historic projections - what the pitch calls 'actuals' should be there or there abouts. Well not in this case.
Retained earnings on the CC pitch were stated at £(164,000) ie losses accumulated to YE July 2014. Yet the filed accounts at CH show this figure to be £(603,000) - that my friends is a truly whoppingly large difference.
Is there an explanation - Hmmm we have no idea. Any investors who know the answer please let us know. Of course the real accounts were not filed when Hubbub launched its Crowdcube pitch, so there was absolutely no way to verify this figure. Crowdcube clearly didnt bother to check it.
The projected profit/loss for the YE July 2015 was given by CC as a small loss of £1,500. But the actual losses for the year were £250,000 - which is pretty good by Crowdcube standards.
So the difference in the bottom line from the Crowdcube pitch to the real accounts stands at a handsome £230k.
This is yet another great example of why we are calling for all ECF campaigns to be forced to produce audited accounts for the past 12 months before they can pitch. And further, these must be full accounts not the ridiculous minimalist nonsense we see now. This is the only way to prevent this type of manipulation and give investors a real chance of making money. the evidence ios crystal clear that Crowdcube simply cannot be trysted to propduce correct 'actual' accounts.
FourEX raised £670k on Crowdcube in the summer of 2015.
(Note - some of the facts in this blog have been challenged - see comments. Annon is quite right on both scores but it makes little material difference to the post)
This was two and half times their original target and they said the money was to establish the first 10 of their foreign currency exchange machines.
So how have they got on?
Well you could say not too well. Their websites shows just 3 machines - two of which were already negotiated before the CC raise. the news section on the website has no news for 2016(see comments). The accounts filed recently show an odd picture compared to the projections on CC.
They have made a slightly larger loss than predicted but for CC projections these are almost a miracle. Whats odd is that the shareholder figure in the projections shows investment of £1.375m by September 2015 and the actual filed figure is only £670k ie the CC raise. So somewhere new predicted investment has vanished. In the pitch the company identifies the need to scale up and states that another £3m will be raised ( no ifs or buts) before the end of 2015. There is no filed record of this money (see comments). Which might explain the lack of units?
Technically the company is insolvent and only being held up by what CC showed as LT directors loans but which are now filed as current liabilities. In the CC projections this figure was £1.2m but the filed figure is only £570k. So between the missing equity and debt finance, the bottom line is £780k worse off than the Crowdcube projections showed.
That is one large hole. There is also the anomaly of the cash balance - over £800k in the bank according to Crowdcube but in reality just £51 in the real accounts. So where did £670k go?
450 investors put money into this company so if any of you read this blog and have news on this company - let us know. Of course all new companies are subject to delays in their role out etc but we think its time for claims about phantom future investments to be stopped. We see time and time again companies promising new money but then it never arrives. It seems to be a way of legitimately lying.
Friday, 10 June 2016
Chilango lose case for £700k VAT refund.
The food chain Chilango which raised millions recently on Crowdcube, has had its VAT reclaim for almost £700k rejected.
Their food was considered served hot by the judge and with changes in 2012 to the vat regulation regarding hot and cold takeaways, they are not eligible to be zero rated.
Investors will just have to hope that this money was not an important part of their business plan!
Crowdbnk have rewritten the rules for Equity Crowdfunding - making it into a comedy.
Crowdbnk have decided to pull out of ECF - concentrating instead on P2P lending. That is fine, but as its parting shot it has made a total mockery of the sector.
We have written several posts on The New Cratfsmen - how they failed to raise a second tranche on Crowdcube then appeared on Crowdbnk to raise the same £1m - without telling anyone about the failure. Then they cut this figure to £750k as they had had no interest. The same 14 investors who put in £565k at the start, were the only ones to invest - yet the pitch remained on the site for months. No new investors.
So what do you do with a flop like this as a platform? Simple solution - you move the target.
So guess what - now the platform can show the same 14 investors and the same £565k as a SUCCESS. The target they were looking for was only £500k all along - or half the original target. No mention of this slight of hand anywhere on the site of course.
This has clearly been assessed by the FCA as a viable way for the UK to run its ECf platforms. So we need never see another pitch fail. You raise whatever you feel like or whatever people are willing to give you. So there is now no point in any business plan with projections, or any valuations, In fact there is not point full stop. Its just a massive free for all.
Haven't we been here before??
Wednesday, 8 June 2016
Ineed have raised several rounds on Crowdcube - we believe the total is in excess of £250k to date.
Accounts just out for 2015 show losses of around £400k and no fuel left in the tank.
We dont know if this is a good idea or not but after 5 years its making ever increasing losses.
Tuesday, 7 June 2016
This story reveals the true nature of the Crowdcube platform.
It is a story of incompetence, greed, fraud and 88 Delicious. It is a story that we have exclusively from an impeccable primary source. We will call them Alfie in this.
Lets begin at the beginning.
Alan Colton contacted Crowdcube in the early summer of 2013, to raise funding for his venture 88 Delicious - a drinks brand company. Crowdcube carried out their rigorous due diligence and accepted Alan Colton and 88 Delicious as a bona fide business. The business launched its campaign in July 2013 and by August 2013 it had raised the full amount of £290k.
Then in September 2013, as investors expected to receive the final paperwork, they received a brief email from Crowdcube saying that the 88 Delicious campaign had been cancelled. There was no explanation. Below is the email sent to investors -
Drat! We need to let you know that 88 Delicious Brands Ltd has expired or been cancelled and is no longer on Crowdcube and as such no money will be debited from your account.
The reason for this is: #REASON_CANCEL#
But fear not! There are plenty of other great ideas for you to invest in.
You can view the latest pitches here.
The Crowdcube Team
You can view the latest pitches here.
The Crowdcube Team
PS: Follow us on Twitter for the latest news @Crowdcube
Alfie was not happy with this and responded to CC that he would like to know what ''REASON CANCEL' meant. This is the reply CC sent him -
Thanks for your mail alerting me that the mail did not work again - I can only apologise and I have escalated the issue.
We have been unable to complete our post funding due diligence in 88 Delicious Brands. As a result we have taken the difficult decision to cancel the pitch. Your investment via Crowdcube will automatically be cancelled and no money will be debited from your bank account.
I would like to take this opportunity to apologise for any inconvenience this may have caused.
Please don’t hesitate to contact me if you have any questions
Crowdcube is authorised and regulated by the Financial Conduct Authority (No. 572026)
So even after asking directly, CC gave no reason.
That month Alan Colton wrote to the list of investors that Crowdcube had given him, saying that the cancellation had been the result of CC asking for sensitive commercial information which the company was unwilling to give them. And Alan Colton continued, investors could now invest direct with him in the exciting new brand. What's more, he upped the investor rewards to include tickets for the imminent Football World Cup in Brazil.
Alan also included a new clause in the shareholder agreement that allowed investors to get their money back in a period up to September 2014 if they were not happy with the company's performance.
At this stage Alan handed over day to day communications to a Sara Hinge - see below -
88 Delicious Update
Good Morning 88 Investors,
Please see the new updated brochures for you're viewing, we believe they are coming along great and we have tested with the american distributors this weekend that have seen a huge response rate.
Alan is in the USA now for the next few days at the Distillery meeting with the Brazilian Importers for the world cup distribution and meeting with P. F. Changs buying director to close the supply chain to them.
** We understand to the third eye some times little mistakes can be picked up so i ask if any of you see anything in the brochures that could be worded better we would like your input **
I have so far received over half of the agreements back which I thank you for, if the remaining could come back to me ASAP that would be great, remember you are not obliged to sign the agreement and this would not effect your investment.
I will be compiling a list this week of all of your rewards, bottles of 88delicious, bottles of champagne, seats at Chelsea/Arsenal and Brazil tickets, Also I will be sending a list of how many tickets you have allocated to you for the Launch event that will be publicised this week.
We would also bring to your attention we are due to be in the Daily Mail this week, so keep an eye out.
In the first of many quirks in this story, it turns out that Sara Hinge doesnt exist and never did.
88 Delicious received around £80k in investment and for a few months, things appeared normal.
Alan had arranged a grand brand launch for December but when the time came it was suddenly cancelled. Alan started to make (through his pen pal Sara Hinge) some statements about his stock being impounded by Customs. He then claimed to be critically ill, terminal indeed. This claim was rather ruined by his Twitter feed which showed him enjoying the sun in the South of France. But hell if you are going to die anywhere that's a pretty good choice.
At this stage some investors tried to activate the refund which had been so carefully included in the investors document. However Alan stalled on this.
Alfie decided to do some checking. Here is the incredible list of facts he found -
Alan Colton was at the time Crowdcube accepted him onto their platform an undischarged bankrupt. This related to a fraud case involving Alan Colton in January 2013. He was undischarged because the authortities were not satisfied with his conduct post sentence. The police have stated that they had also investigated Alan Colton's wife but had not been able to bring any charges.
The Alan Colton listed as the company director had a DOB making him 70 years old. The Alan Colton who ran 88 Delicious was 32 in 2013.
We already know about Sara Hinge. Alan told investors that she went on maternity leave in January 2014; where she remains.
Alan Colton is not terminally ill. He is awaiting sentence.
Wetherspoons were the first people to report 88 Delicious to the police as they were owed money. The police contacted Crowdcube in early 2014 as part of their subsequent enquiries and found that the platform had no full time in house lawyer.
At least one of the investors is an elderly lady who purchased the shares on the back of the offer of World Cup tickets.
So where does this leave us?
Crowdcube claim that it was the investors who chose to invest - '' Unfortunately we understand that some of those people invested in the business outside of Crowdcube’s regulated environment.''
This investment was only facilitated because CC allowed Alan Colton, a bankrupt with a record for fraud, to use their platform and then allowed him direct access to their contact details.
Furthermore, despite Alfie's attempt to find out why the pitch had been cancelled, CC chose not to give out this vital information. If investors had known that CC knew the company had fraudulent orders in the pitch then they would clearly not have invested? Our best guess is that they didnt want this getting out. Investors were therefore sacrificed to save CC's image.
All the investors we have spoken to, admit they were foolish but they are angered by CC's arrogant attitude. Surely CC had a duty of care to their members? Then you also have to ask how the out to lunch department missed the glaringly obvious fact that
1. Alan Colton was not the old man at CH and
2. Was and still is an undischarged bankrupt.
We believe that Crowdcube should apologise and should reimburse all shareholders - without the platform and its gross incompetence, none of this would have been possible. So come on Crowdcube, do the decent thing. Just this once.
Monday, 6 June 2016
Saturday, 4 June 2016
We wrote quite a few articles about 88 Delicious, their Crowdcube raise, subsequent Crowdcube rub out and eventual collapse.
We removed them all when we were contacted by Alan Colton, the man who ran the company. He had a story to tell which seemed to be worth listening to about Crowdcube having his company closed down.
A few days ago Alan Colton pleaded guilty to two counts of Fraud at Basildon Magistrates Court - sentencing pending.
So we now know for sure that what he was offering through Crowdcube and what was in fact funded by them but then taken down, was fraudulent. We think that says a lot about Crowdcube's claims to carry out any due diligence.
What is still unexplained is how Mr Colton managed, after Crowdcube had deleted him, to contact all the investors privately. Many of them invested. They all lost all their money.
Its interesting that Crowdcube have managed so far to keep this quiet. Wonder why?
It's a slightly sordid, rather sorry tale and we are pretty sure that Sherlock would have moved heaven and earth to avoid having anything to do with either the Coltons or indeed Crowdcube.
Friday, 3 June 2016
Interesting piece here about Solar Cloth potential sale to ex director - our guess is Perry and ex backer, again our guess is the guy who put in the £500k, Charles Shale. As Crowdcube shareholders dont have any position here, they will most likely be shut out - the administrator's job being to rescue money for preferential creditors.
All a little too obvious we think!
Wednesday, 1 June 2016
Well it turns out that MEEM SL HAD to close and then re open as MEEM Memory because the major shareholder who invested £250k via Crowdcube was being such a pest.
This might explain why one of the Directors took out a charge over the IP of the original MEEM just months before they chose to close?
Is that in anyway legal?
MEEM SL (the now defunct MEEM) which was happy to take Mr Goel's £250k when they needed it to complete their pitch, is now offering all Crowdcube shareholders the same size of holding in the new MEEM Memory, which seemingly now owns the IP. They are also offering a very generous 30% bonus.
Do you suppose this is coming from Mr Goel's holding?
All fairly incredible.