Easy Property create new world record for the worst projections ever.

In what is becoming a boringly repetitive story, yet another Crowdcube funded company, Easy Property, has crashed its projections. The results are quite spectacular. 

Easy Property raised £1.36m in 2014, from 376 Crowdcube investors. 

The company admits in its latest accounts that its progress has been a little slower than expected. They also say that they will have to raise even more money (they have already blown the 2014 forecasts) this year.

Here is a comparison between what they told people would happen (and what they both valued the company on and sold the shares using) and what has actually come about -

2015 - Revenues £  144k ...................Projected £6.8m

           P&L         -£6.77m..................               -£4.99m

2016   Revenues £ 874k.....................               £23.7m

           P&L         -£10.94m................               £2.67m profit

This creates a gap for the last 12 months, between what they told investors would happen and what they have actually delivered, of a world beating £13.5m in the P&L. 

Since 2014 they have raised over £24m in equity finance, when they predicted only £12m in total. As we know, they are about to have another go. This new new round is not in the projections, mind you, nor was the last £12m.

Since 2014 they have delivered next to no revenues but the administration costs to achieve this have come in at over £18.6m, when the projected figure for healthy revenues was only £16m.

All of this according to Seedrs' Jeff Lynn is perfectly normal and to be expected. We beg to differ.

The company was valued at £68m in 2014 when it appeared on Crowdcube. What value now? 

We wish all 376 investors (who are according to the Directors are going to finance the next round) the best of luck.   

Ethos Founder resigns and still no accounts filed.

Ethos Global, who raised £709k on Crowdcube less than 12 months ago, are now 6 months overdue with their accounts and AR. Now the co founder, Ms Hersch, has resigned.

The company's 2016 Crowdcube pitch talked a great game about their existing and highly successful Cambridge studio and the plans to open many more. Shortly after raising the funding, the Cambridge studio closed with the property being put on the market by Bidwells. They then opened another first studio in their chain, in London. So far that's it.

We have written about them before here.

When contacted, the company pretended to have a PR department, who unsurprisingly refused to answer any of our queries. Readers may remember that the Solar Cloth Company also came from Cambridge........perhaps something to do with the waters of the River Cam being a little murky?

As some one below has very kindly pointed out - this is not the full story. Hersch has just joined a company called Ethos London England, which was incorporated in February this year and is in turn wholly owned by Ethos Enterprise Holdings  - also set this February and wholly owned by the other founder of Ethos Global, Dr Theo. Of course this all be for very good reasons but it seesm a little odd that shareholders in Ethos Global, who are waiting for accounts, have to watch as these two play pass the company. The music will surely stop soon? 

The reason we didnt see this connection before, is that these two both have names that lend themselves to multiple entries at Company House; a feature which you may remember was prominent in Solar Cloth Co fiasco.

We wonder if this could have anything to do with the Cambridge lease? The property is still vacant and if their lease was a long term one with no break clause, ditching Ethos Global might be a solution in a pre pack deal. Wait and see.

Julia Elliot Brown's Upper St Liquidation

I have to start by confessing a very considerable dislike for Julia Elliot Brown and all those like her. Her Upper Street company liquidation reveals a trail of debts of almost £500k after the collapse of her Seedrs ECF funded shambles. It's best summed up by the liquidator who stated that he couldnt give the remaining stock away, let alone sell it.

Now there is nothing wrong with a failure, or two even. In fact you can learn far more from them than success. But to fail with such large debts and then promote yourself, as she has, as a guru of small business and start ups, whilst the corpse is still wriggling towards its final resting place, is just a little too much. And yes, you guessed it, she is in our space, promoting herself as someone to make your equity crowdfunding campaign a success. Clearly not for the right reasons!  Who needs Julia Elliot Brown when we have Seedrs and Crowdcube screwing up the sector already.

Wisealpha prove our point

The art of alternative facts is alive and kicking. Wisealpha just filed accounts showing us how it's done.

Wisealpha raised over £570k on Crowdcube in April 2016. Their YE is June and the June 2016 accounts have just been filed.

These accounts show a considerable difference to the actuals/projections published by Crowdcube. This is even stranger when you consider the difference of over £90k in losses comes about with a projected turnover of just £11k. 

It means that the projections for 2016, which were all but actuals by April 16, must have had costs that were almost half the real figures. Given that this increase has been achieved in 2 months that is some manipulation. 

Although to be fair, it doesnt amount to a hill of beans when you consider what Crowdcube and Kelly Anne normally achieve. 

How many times can Sugru promise the earth and deliver a teaspoon? Endlessly it seems.

Sugru are back - not once but twice. Having raised over £3m on Crowdcube in 2015, they then raised over £1m on Envestors in 2016 and are now looking for loads more on Crowdcube. They just love spending investors money.

The really good news for investors is that the valuation on the current pitch is around £34m, up from £27m back in 2015 and also up by £30m from last year. All of this on the back of vastly reduced revenues and vastly increased losses. But wait; growth is just around the corner to be sure. Is someone taking the Michael.

If you care how they are really doing or are wondering where they come on our scale of missed projections; they are winners. Projected revenues for 2016 were over £8m. The actual delivered revenue was just over £4m. Whats more worrying is that the overheads to deliver just £4m where the same as to deliver £8m and the inventory has actually increased on halved revenues. Long term debt has ballooned. Similarly, the crucial GPM was a sorry 48% against the projected figure of 60% and its progress rapidly north in 2017 to 64% is now projected to be a mere 55%. Of course given their record so far, it would be amazing if they get even close to these reduced figures.

In a helpful explanation of the current valuation, the management come up the usual. However if we sure to believe this valuation, then we have to believe the projections. History dictates that this is not sensible. Reasons given in the forum (there is no mention of this in the pitch) for the 2016 £4m revenue shortfall in no way cover this shortfall.....QED the £8m 2016 projection was nonsense and if you extrapolate this, the current projections are nonsense. So the valuation is nonsense.....so you are paying too much for your shares even if this company does make it. 

The glue maybe good but by heck the management stinks.

In the in-between round on Envestors, in 2016 and not mentioned in the current pitch, they projected revenues for that year, that they now appear to have failed to meet. It is a constant story of making up some figures which they never get near to. 

Sure they might get bought by other larger sniffers, but where is the upside on £34m when they always fail to deliver those crucial sales. With an advertised 2m plus users, it doesnt say much for repeat business when they are only buying less than one product each pa! The claim that it's used in over 170 countries is also an odd one - how could they know that? 

The Crowdcube pitch says they are poised for growth - an awkward position they have been holding for 2 years. Profitability is due next year......of course it is. If you are into a little self flagellation, this one might be for you.  

Estatesdirect Crowdcube shambles rumbles on

Estates direct raised £500k on Crowdcube in 2014. Just in time for the SEIS allowances to be covered (3 years), the company has been sold to a newco backed by the Pels Family office. 

B shareholders have been issued a final warning to accept this deal or be forced to by the Crowdcube drag along clause.

The newco have bought the equity in the company for £125k and taken on its debts. The company was valued by Crowdcube at £5m 3 years ago. You do the maths. Here's a clue - Crowdcube shareholders who invested £1000 will receive £7. So they will lose £993 if you ignore SEIS.

You have to ask the question. If Crowdcube are going to facilitate this kind of transaction, where the taxpayer is essentially helping investors make a return via this move (SEIS gives them a 50% rebate on their investment and no CGT on sale), how is this building sustainable SMEs for UK plc?

We were under the impression that the main reason for the Goverment's S/EIS scheme, was the creation of successful SME's. Apparently we were wrong.

We have written a few times about this outfit - here.

How stupid can Altfi journalists be?

This article came out recently on Altfi about the move by Revolut from Crowdcube to Seedrs for their next round of funding.

http://www.altfi.com/article/2811_app_bank_revolut_launches_4m_equity_crowdfunding_campaign

It's amusing for once to see Luke Lang caught with both feet firmly in his large mouth. But the journalist, who is either an idiot or just plain lazy, fails to notice the glaringly obvious 'fake fact' is Lukes comments below -  

From the article -  

''Crowdcube co-founder Luke Lang said that he was "very surprised and disappointed" at Revolut's decision, given Crowdcube's "proven track record of funding VC-backed businesses". He also noted that some firms have gone the other way, switching from Seedrs to Crowdcube. POD Point – which recently raised £1.5m as part of a larger £9m round, led by Draper Esprit – is one such example.''

Anyone who has any knowledge of ECF and its 6 year history, knows that Draper Esprit are now major backers of Crowdcube. Do you think this might explain this particular switch?