Iâm saying nothing??
Thatâs actually quite a good thing 
But you seem to have something to say so letâs hear it, not like you to be shyâŚ
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https://www.crowdcube.com/companies/honest-burgers/pitches/qaEe8q
Iâve not paid much interest to companies raising on Crowdcube in a while since the change in fee structure, but Honest Burgers is an intriguing one.
The brand seems to have staying power in London, quality food and building to an integrated supply chain.
Need to do a deeper dive into the numbers, but a clear growth story ahead
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Stay clear??
Valued input as ever from the oracle of Crowdcube. Whatâs your logic behind this robust statement?
- Statistically youâll be more right than wrong with this blanket statement (regarding to successful start-up exists), but itâs not making anyone any money
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Several of their stores have closed down, even in affluent areas. Pretty certain that most crowdfund campaigns for restaurants and breweries have mainly failed.
I think Juno might be right.
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Restaurants and breweries that raise on CC do have a terrible track record of insolvency.
Iâve only found a report on the St Albans closure, but if some of the more flagship London locations have been closed thatâs worrying times. Footfall can be low but delivery orders are usually a constant.
With the macro outlook in the UK and the number of US chains trying to establish on the high street, I have my doubts with this as viable investment
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Thank you for expanding on my reply
A target of ÂŁ1m achieved before the campaign even started. Hope the burgers are more âhonestâ than they are.
I like Honest Burgers and the fact that theyâve been able to survive as a restaurant group for over a decade speaks to something positive but their campaign is full of red flags. For example, youâre led to believe that theyâre a profitable business because they literally say that (âWe have a track record of consistent sales & profit growthâ) and yet thatâs just not true, their operating losses last year were north of ÂŁ5m which was an increase of 100% over the year prior. Theyâre growing turnover, great, but theyâre growing their operating losses at a higher rate.
Another laughable aspect of the campaign is the front-and-center claim that this is a âRound led by Active Partners (Finisterre, Rapha, LEON, Soho House)â but what they donât mention is that Honestâs majority owner is⌠Active Partners. A more Honest headline would be âour business is losing millions each year so we are shoveling another million in to keep the lights on and would like yâall to shovel money in too because at some point we are going to stop funding this money pit.â.
The good news for fans of Honest Burgers, like myself, is that when the company collapses, the restaurants will be rescued out of administration and the food will live on, so while every investor will lose their shirt, at least theyâll still be able to drown their sorrows with a delicious Honest Burger (and maybe itâll be good they donât have a shirt, 'cause itâs easier to clean ketchup off your naked chest than get a ketchup stain out of a shirt).
Of all the restaurants and breweries that crowdfund, Honest is certainly a stand-out restaurant that is far ahead of the rest of the field⌠which says a lot about crowdfunding and not a lot about whether anyone would be wise to invest in Honest. Remember, youâre investing in the corporate entity, not the restaurants.
12 Likes
Is anyone looking at Kroo - theyâre raising on Crowdcube now at a ÂŁ120M valuation? Overfunded I see already.
https://www.crowdcube.com/companies/kroo-bank-ltd/pitches/by9eYb
Madness⌠they have been around since 2016⌠they already lost ÂŁ70m before getting the bank licenseâŚ
Unclear cash situationâŚ
Smell bad
I did take a look at them because it looked tempting, but Iâll probably give it a miss. I donât like the fact that they seem to double their losses annually (-ÂŁ7m last year, -ÂŁ14m this year). I wouldnât have put more than ÂŁ10 in, tend to agree with SonnyP sadly.
Another one that just keeps raising with no end in sight, investors in round 1 up 815% while market cap is up 35x 
. The dilution is real. Now theyâre saying existing investors may be able to cash out to a âstrategic investorâ, Iâll believe it when I see it. Sunk cost fallacy at this point.
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Not a fan of Chip, but the growth of the last 12 months has been impressive. ÂŁ20m Revenues and breakeven
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Iâve talked a lot of shit about Chip and I stand by most of it, but it is impressive that theyâve been able to achieve such a turnaround. I do not think it speaks to the brilliance of the leadership, considering they were wasting so much time and money on ridiculous activities like car investments and crypto, I think they were in the right place at the right time⌠but surviving long enough to be in the right place at the right time is most of the battle, and so credit is due for that, even if it was by accident and they were months away from bankruptcy.
I remain skeptical about their long-term success because I do not think this speaks to the leadershipâs brilliance. The campaign theyâre running now further proves that what they said in the past was a misrepresentation at best (and a lie at worst) because theyâre now acknowledging that at the start of this year, they had less than ÂŁ300m AUA despite their previous campaigns shouting about over ÂŁ1bn in deposits (which was intentionally worded to mislead people)[1].
Maybe my view of Chip is too cynical because of the past, but⌠their success this year has been by virtue of being at the top of the Money Saving Expert list for savings accounts that pay the highest interest. However, as of about 2 months ago, they stopped pursuing being the best and fell behind so much that they havenât even been listed by MSE. The revenue they generate from AUA will trail deposits so the revenue they generated most recently could be based on deposits from a time when they were top of the MSE list. The choice to stay at 4.84% instead of competing with the top offered rate of 5.22% may explain why theyâre now making a profit this month: theyâre banking profit at the expense of growth for the crowdfunding narrative.
What really matters is whether the deposits theyâve had are sticky: whatâs their churn like now that theyâre no longer the highest-paying savings account? Have they built a sustainable business that doesnât rely on this abnormally high-interest environment? Does the profit this month represent the beginning of an upward trend⌠or the peak?
Considering their history of having a tenuous grip on the truth, I am very suspicious about their choice to raise now. If youâve gone from losing ÂŁ1m/month to profiting ÂŁ500k/month why would you waste time crowdfunding, why wouldnât you spend all of your time focused on your money printing machine, why would you give away equity at the same valuation as when you were hemorrhaging money⌠but hey, what do I know, I would never have predicted this 12 months ago.
[1] 1 year ago â500k+ savers across the UK with ÂŁ1bn+ saved through the platformâ, today âGrowth: Deposits increased 10X to ÂŁ3bn & customers 2X to 219k in 2023â.
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Iâm a bit torn on this one as well.
I invested a small amount in Chipâs first crowdfunding round.
I have not invested in this round, as the much higher valuation (ÂŁ167M) will mean only a small dilution on my holding.
The crowdfunding raise does make sense from the perspective that they are targeting their customers who may want to invest, and that may make them stickier for the Chip app. Freetrade has taken a similar approach over the years, and it appears to have been beneficial to the business.