is it on private view ? as I cannot see it on my CC investments opportunitiesā¦
1 Like
How many of you have invested in Zoe?
I passed. The valuation is over 17x revenues and the company is losing Ā£10m per year.
2 Likes
EIS/SEIS is the only thing makes me invest in startups but this one dont have any. So passed as well!
2 Likes
ZOE is expensive I agree, but youĀ“ve got Balderton Capital in, and the founder and C team have very strong enterprenurial and exit credentials.
Interesting project from a diversification point of view as well. I donĀ“t have anything in portfolio that has to do with nutrition or healthtech.
@SonnyP in regards to your note around revenue multiple, very strong point against investing. However, note thereĀ“s a 250k user waiting list ready (or close to ready) to be monetised.
1 Like
Typical red flags of crowdfunding on Zoe:
- Crowdcube investors will get ordinary shares while Vc that invested 3 months ago got pref shares;
- deck very opaque;
- no financial details about P&L structure;
- overall the company burnt Ā£25m so far generating jail Ā£10m of annual revenues.
6 Likes
Like most start ups, ZOE is a money-losing machine for now and it will be until it reaches a decent size and market share. Frankly, I wouldnĀ“t worry too much about the financial statements and the specific figure theyĀ“ve lost this year, the important thing is the potential future cash flows.
Regarding the opaqueness of pitch, yes yourāre right, theyĀ“ve disclosed the very minumum. However, I am pretty sure Balderton & Co have crunched the numbers properly before investing a fraction of those Ā£25m.
VCĀ“s are getting a better share class than retail investors, but theyĀ“ve also done the due diligence and assessed the potential growth of the company for us.
I invested in 1 company on Crowdcube in 2016, another in 2017.
Both still trading.
Thought Iād dip my toe in the water again, had a look at Seedrs. Only thing to really grab my attention was a āLaunching Soonā pitch for a vehicle valuation platform.
Within a few minutes of performing due diligence I find that the sole director of that business, Sellthiscar, which was registered in just June 2022, was jailed in March 2018 for eight years for being the ringleader of a major drug smuggling operation, which would mean on early release for good behaviour (50% of sentence served) heās come out in 2022.
This is incredibly easy for anybody to verify.
That will be me retiring from Equity Crowdfunding forever. If stuff like this is still happening in 2023 then its time to close all the platforms down.
14 Likes
You did DD, they things are relying on people who donāt, much like many xcammers
2 Likes
1 Like
That is absolutely wild that the platform is not doing the most basic referencing on the directors of the companies they are essentially promoting on their platform. Excellent spot and flag @semisophisticatedinvestor!
The FT/This is Money should be all over this, as should the FCA.
4 Likes
I would call your reaction a tad unforgiving? The guy committed a crime was punished and has served his time,you donāt know his story,maybe the 4 years in prison gave him time to reflect and he is now a different person,even more honest than many?
Why not engage with him when the pitch opens for investment and then decide.
I must say,at first impressions it looks not too bad and the name is very catchy.
1 Like
Iām all for second chances in life etc, although wouldnāt get through vetting if he applied to work for my employer (a bank), but Iām not handing my hard earned cash to somebody who just come out of prison for a serious crime. It is Seedrs Iām angry with, not the entrepreneur.
How do you suggest they implement this as a policy, though? If he is able to start a business and raise capital legally, then surely he should be allowed to participate in crowd funding too?
Not saying you are in the wrong, and excellent work with the DD, but Seedrs running CRCs on founding members does seem like overkill a bit.
1 Like
If this is the case then surely he would still be subject to some sort of licence agreement/probation so would need to be on his best behavior to avoid recall.
If heās a ring leader of a drug ring, theyāre probably hiding money somehow, so again, would you hand over money for it to be hidden from tax etc?
Those accounts are to December 2021. I wonder how theyāve done in 2022, more people back in offices, and more strike action.
Citymapper should ramp up an ads team. Stop showing generic Google ads and start delivering discounts on your route or destination.
1 Like
I work for an impact investment firm, we invest about $2bn annually. Objectively, I can tell you that no serious investor in their right mind would fund a business where it was known that the sole director and presume sole person of significant control has been convicted of a serious criminal offence where integrity, ethics and judgement are called into question to such an extent. It would be ripped apart by any credible investment committee, and tbf doubt it would even get that far. We walk away from potential investments for far far less serious issues related to conduct and reputation.
I am also a huge believer in giving people a fair second chance (and first chances for many who are excluded by virtue of their circumstances which are beyond their control) but given how accessible these āopportunities (!)ā are, itās bonkers that Seedrs et al. donāt conduct basic screening.
Itās huge rep risk to their business and as you can see from @semisophisticatedinvestor reaction, a threat to the entire sector model. I understand the current regulation around crowdfunding, and I think it is inadequate. I donāt know the Seedrs policy on directors with unspent convictions but it would be very simple for them to carry out a red flag review on all directors/shareholders with significant control.
A snappy name does not make a good investment, and worse still, in an environment where the inexperienced (and experienced) are squeezed and looking for big returns the risk of unaffordable losses is off the charts.
Maybe the pitch will fully disclose this conviction, and will be beyond compelling with plenty of mitigants and a stellar management team, but again if not disclosed, sound the klaxons. And of course, if itās a case of mistaken identity, someone with the same name, happy days, but the principle still stands.
Sorry for the long one, just feel very strongly on this.
15 Likes
It definitely isnāt a case of mistaken identity. Can ascertain this via his directorship history on Companies House and comparing it with the street of his address given in articles about his conviction. It is beyond doubt. First thing I check is directors + ownership via confirmation statement. Takes a few minutes.
1 Like