Hello
I last posted at the end of last year on the high number of crowdcube funders that have failed in my so-called portfolio. I’m now adding cornerstone to that which was supposed to be an expanding shaving company already in operation when i invested and apparently doing well. I received received some documents it’s from a company and it is all in legalese I can’t understand it. basically it sounds as if they. are buying a financial company and I have the option to buy shares in this new company but I do not have the option to vote on what’s going on on and it sounds like they are going to liquidate the company. However I have not been able to understand this is anyone able to help please? Cornerstone stated ad a shaving brand… then got into vitamins by post… and has for a long time now been sending out regular emails for me to stock up on erectile dysfunction products… obviously i wad worried by that stage… not a great way to keep customers. . by the way I’m a female. Up the only benefits I got from cornerstone required a generous supply of of their shaving blades and products which I have more than enough of. Up but I didn’t intend to spend 1000s o
The document was sent from a company saying they are happy to answer any questions I might have but when I contacted them they seem to avoid giving me any helpful advice and told me they couldn’t give legal or financial advice or translate what was in the document ?
I got into crowdfunding because of a positive newspaper article in one of the the papers either it was the Telegraph or the Observer or something praising crowdcube and big Returns it could bring. At that time ISA interest rates at an all-time low and I thought I would get better Returns. By the way I was also under a lot of stress in my marriage so maybe that’s why I was so desperate. I really regret it and would never invest in crowdfunding again it’s like a Dragon’s Den except that it’s open to anybody. I agree with other posters who say you must really question why are companies asking for money?
Sorry for the long post. how are these companies allowed to state that they expect 5 to 10 times Returns? there’s no analysis by crowdcube or way to prove this?
I almost invested a little bit in this when they first raised but i pulled out of the round. It was a very highly polished pitch with an extremely investable founder (Founder was Tom Blomfield but for razor blades), however there were a few red flags which put me off as an investor with moderate experience at the time.
The main flag for me was their response to a very concise and informed Q&A question accusing them of being a cheap rip off of Harry’s and asking what they would do if Harry’s entered the UK or they get sued. Their response was along the lines of “Harry’s probably aren’t interested in the UK market as they are doing so well in the US and we can’t get sued as the product is a generic razor from the same manufacturer as Harry’s in Germany”… that made me grab my money right off the table and I have since seen loads of UK ads for Harry’s, dollarshaveclub, even Gillette subscriptions on tv and not really heard much from cornerstone apart from seeing a poster for their razors in a urinal in Shoreditch in 2016 (no joke!).
It sounds like you invested a lot and this has hit you pretty bad. From your language it feels like you are suggesting you were missold the investment. Crowdcube have treaded along a dangerous path by marketing extremely risky investments to novice investors, however their legal work is “extensive” and they are “highly regulated” ie. I think you will find that you have agreed to every bit of legalese under the sun when making the investnent and the regulators have got their back.
It’s un unfortunate situation and while I can’t relate directly on this one there are others where the outcome has gone the same way… Lots of hype and projections of 5x growth and exit in 3-5 years, and then they blow all the money and disappear off the map after a year. All we can do is learn from our mistakes and be more skeptical about future opportunities.
Sorry I couldn’t answer the question about what the letter means etc…
Thanks for your reply. At their investment pitch they stated that they were advertising and I did see adverts but at the time they were giving away free free good quality stainless steel metal razor heads but I guess the problem was when people wanted to rebuy them. I’m great disillusioned I think a lot of companies are just winging it for a few years at other people’s expense. I think there needs to be more regulation rather than saying you invest at your own risk. I wish I could remember which newspaper article it was which encourage me to join. Last time I posted people were worse saying I could claim against tax loss I don’t really understand this I thought I’d claim back all the tax I could in the years I invested everytime I think the last bad apple has fallen off the tree another one starts looking like it’s going bad
I think this one was particularly unlucky. It was hit by a number of external factors which, for one reason or another, led to the brand being unable to continue its trajectory of customer acquisition and growth. The budget that DSC and Harrys came over with was enormous (and much bigger than Cornerstone anticipated) meaning their cost of customer acquisition was ludicrously high…as a result this pushed up Cornerstones to an unsustainable level given they hadn’t done a Series A. I don’t think either of them have been particularly successful and managed to crack the UK market. COVID seems to have been the last straw … unfortunately it has been for a lot of companies