Pick a number

Someone made the excellent point today that Bird Cycleworks is currently valued at £0 by Seedrs if their ‘fair-value’ model is to be believed. Yep, that’s the same Bird Cycleworks who posted their company accounts a week or two ago highlighting a modest profit.

“We calculate fair value by looking at two share prices: the share price at which the investor invested; and the most up-to-date fair value of the shares (which we calculate when we obtain relevant information about the company in question).”

Bird Cycleworks fail to receive any value because they didn’t do their initial raise in the last three years, they haven’t had subsequent raises in the last three years. They have presumably produced a zero valuation because they “have conducted a substantive valuation analysis with a presumption of decline in value” . I’m not sure what this substantive analysis is based on or when it was performed – I presume it was around September 2016 when Seedrs produced their extensive valuation report and started publishing these valuations alongside the IRR.

This issue highlights a few more important points about the Seedrs valuation model.

How is ‘relevant’ information being used to determine a valuation when a company doesn’t meet the 3-year criteria? With the 3-year rules, at least the valuation method is transparent, regardless of whether it is accurate.

Are Seedrs actively seeking information from companies who’ve raised money on the site, particularly from those who fall outside the 3-year rules?

If Seedrs are using CH filings to determine valuations, this raises yet more points. How can accounts that are up to 9 months out of date when published possibly indicate the value of a company particularly when they are more than likely in the form of micro accounts that contain only a simple balance sheet?

If all companies who fall outside the 3-year rules received zero valuations I don’t think I’d mind so much, but there are other companies with positive valuations whose only raise(s) took place more than three years ago, here’re the first two I could find, there are many more:

  • Daredevil Project – Raised in Feb 2014, nothing on their Twitter feed since March 2016, nothing on Facebook since 2015, a website under ‘re-design’, recently filed accounts showing mounting losses. Shares currently available on the secondary market @ £0.61 per share.
  • Times Place Brasserie – Raised in Jan 2014, (still) unclear ownership, mounting losses. Shares currently available on secondary market @ £10 per share.

A couple of final points.

Does a successful trade on the secondary market constitute validation of the valuation and effectively override the 3-year rules?

Are the rules of valuation helping or hampering the ECF arena? At the moment you can sell a company you bought last week, but you can’t sell one that you bought more than three years ago if Seedrs’ opaque valuation model says it’s worthless… Go figure.

A Final Flourish

Tonight sees the close of the first secondary market trading window on Seedrs – I presume the absolute deadline is midnight but given Seedrs reputation for removing pages that show them in anything but a positive light and my lack of interest in staying up that late I thought I’d do a quick round-up now before anything disappears (10pm Monday 12th June).

If you read my last update you’ll know things stagnated after the opening day with only a handful of new transactions. Things look to have picked up a little over the closing weekend, with another £4k worth of transactions between 8th and 12th bringing the total to approximately £14,700 representing an overall take-up of 37% in monetary terms.

The main takeaways from the final figures suggest both Glentham Capital and Torch should be avoided at all cost, they had the highest value of shares on offer (£3,804 and £3,600 respectively) with the lowest take-up in percentage terms (0% for both).

At the other end of the scale we have seen some movement over the course of the 7 day window. At the end of the first day, just £154.20 of the £3,153 available Wriggle shares (split over 6 lots of varying sizes) had been snapped up, take-up increased as the week progressed, with an additional lots being reserved on both 7th and 8th. As of this evening, all lots in Wriggle have sold making them the biggest seller in value terms. Wriggle have raised three times on Seedrs between February 2014 and April 2016, I’m guessing with an ever-increasing valuation – I suspect this is a case of early investors cashing out and later investors seeing a degree of potential in the underlying company. I’ll have to do some more in-depth research on this one!

As mentioned in my first article, bother Swogo and Adludio F.KA Future Ad Labs proved popular. Perhaps a little more surprisingly a single lot valued at £1,000 in Times Place Brasserie went through in the final days – As a (very small) holder I can’t really see the attraction, my recent article called into question the makeup of the shareholders and whether Nicola Horlick was still involved, the company provides naff all in terms of updates and I see little in the way of opportunity for positive returns – I feel only Seedrs are going to make any money on this one.

It’ll be interesting to see what happens next month… There’ll almost certainly be more lots available now that people have had a chance to test the water. Hopefully, Seedrs will do something about the platform to improve things for buyers and sellers – in its current form, it’s little more than a minimum viable product. As a minimum, we need:

  • The ability to bid on partial lots.
  • The ability set bid/offer prices.
  • The ability to buy/sell outside our current holdings.
  • The ability to see full prior campaign details, forum posts and communications for all lots on offer.

I feel the last two are wishful thinking at the moment, the issue transparency still remains. I very much doubt Seedrs will offer us a chance to buy outside existing holdings without some very big caveats.


Last updated: April 26, 2017 at 22:23 pm

After spending far too long looking at confirmation statements I asked ‘Fund Manager’ Nicola Horlick if she still owned shares in Times Place Brasserie via Twitter, her response:

“My family have shares in TPB.”

That leaves us with four two one possibility:

  1. She is somehow related to Nathan Engelbrecht.
  2. She is somehow related to Timothy James Whyte.
  3. Someone in her family invested via Seedrs when they initially raised.
  4. The CH confirmation statement and annual return is wrong.

I asked for clarification: – It’s been radio silence thus far.

Update (24th April): Nicola’s responded again to confirm her mother is a shareholder. Still not sure if she invested through the Seedrs platform or if the confirmation statement is wrong. 

Update (26th April): After our conversation on Twitter went nowhere, Nicola and I took to email to try and clarify what’s going on. The upshot:

  • Nicola’s mother still holds shares.
  • The latest confirmation statement appears to be incorrect, Nicola will speak to Nathan in an attempt to find out why her mother isn’t included in the statement. 
  • Shares were transferred from other holders (including Nicola and her daughter Alice) to Timothy James Whyte at no cost because Seedrs would not allow new shares to be issued – I presume because us Seedrs investors cannot be diluted because we collectively hold pre-emption rights). 

Times are Changing

Times are Changing

I’ve been away on business for the last couple of weeks so haven’t had the time to post or even do much at all when it comes to crowd funding research, so I’m basically two weeks behind.

In my time away I did receive a few company updates and begging bowl emails from companies I’ve previously invested in – I shall leave some of these for future posts. No, today I’m going to dig into a comment I spotted on the Seedrs discussion board for Times Place Brasserie

“Hi there Nicola and Nathan.
Is there any update to the site’s trading and results in 2016?
Also, in the latest confirmation statement issued on the companies house site, I can’t see Nicola as a shareholder anymore. Any news to report?
Thanks and best regards,

A little background for those who don’t remember. Times Place Brasserie pitched on Seedrs back in 2013 and gained funding of £150,000 in November of the same year, the campaign was fronted by Nicola Horlick, at the time of the raise she held 100% of the company. At around the same time as the raise a second Nicola, Nicola Higgins was appointed as director but I can find no record of her holding shares. The raise effectively resulted in Nicola H owning 22,500 (£0.01) shares and Seedrs with 15,000 (£1.00) (a 60/40 split in terms of rights) and a called up share capital of .

The campaign closed, many months passed and much fun was had on the discussion board (worth my £20 investment alone) and the original plan of taking over a restaurant in Chiswick eventually resulted in the opening of a bar in Clapham called the Walrus Room in June 2015. Between which time Nicola Higgins director appointment was terminated in December 2014.

As investors we got sporadic updates usually posted in reaction to comments on the discussion board. Then in November 2015 a document was posted on CH detailing all shareholders in the company. Nicola Horlick’s holding dropped to 4,500 shares (12%), the next biggest named share holders became Alice Horlick (daughter?) and Nathan Engelbrecht both with 10% – Interestingly there is a single annonymous shareholder on Seedrs who invested £38,000 who was really the second biggest shareholder at this time with just over 10%. At this point there are now 43 separate shareholders listed all with holdings under 5%.

Next things were filed on CH in slightly the wrong order, Nicola Horlick was terminated as director on 31st March 2016 and Timothy James Whyte was appointed on 20th April 2016. This spooked a few people on the discussion board and we were assured by Nicola Horlick that she was still a shareholder at about the same time as the appointment/termination filings were made. I hope you are keeping up at the back!?

Then, in December 2016 someone on the discussion board asks if Nicola remains a shareholder as the latest Annual Return filed and made up to 21st June 2016 doesn’t list her as a shareholder. Horlick responds that she is both a shareholder and guarantor for the rent of the premises but a new investor came in but didn’t want her or Alice on the board, the post goes on to talk about the licence on the premises and selling the business. The return tells a different story, it shows both Nicola and Alice Horlick are no longer shareholders and we have a new shareholder in Timothy James Whyte who now holds 8,250 shares, all other holdings remain the same.

Next the accounts made up to 31st December 2015 are filed in September 2016, they suggest the company is out of money with just £2,655 in the bank and a PnL account well in the red at -£166,142, perhaps the new investor injected some much needed cash, we have no idea of how much Timothy James Whyte might have invested, just Nicola’s passing comment about a ‘new investor’.

Finally we come to the filing that prompted the comment made last week, a confirmation statement with what is apparently a full list of shareholders. This statement puts the total number of shares in issue still at 37,500. Horlick is gone, there’s no mention of her name in the document whatsoever, the shares are now split between just 3 parties Seedrs (still with 15,000), Nathan Engelbrecht (now with 14,250) and Timothy James Whyte (now with 8,250).

What has happened here, is Horlick still a shareholder or not!? – I’ll try asking a few people, let’s see if I get a response.