Crowdfunding investors who backed Emoov ‘threatening to take legal action’

Investors who backed Emoov to the tune of almost £2m in its last crowdfunding campaign are threatening to take legal action.

The Times reported at the weekend that the investors are claiming that they were misled over the financial position of Emoov, which had said it was planning a flotation early next year.

Instead, Emoov went into administration a week ago, saying it had run out of money because funds promised during its merger with Tepilo and Urban had not materialised.

Emoov raised £1.84m – way over the original target of £1m – on Crowdcube this summer from 1,067 investors. They had been told that the merger had “attracted an additional £6m from existing shareholders”.

Emoov founder Russell Quirk told The Times that the funding that had not come through was separate from the £6m referred to in the crowdfunding campaign.

The Times quotes one backer who put £5,000 into Emoov who said that it had not been made clear that the company was “at risk of failure in a matter of months if it did not immediately raise further finance”.

Crowdcube told The Times that it has received over 20 complaints.

The crowdfunding sector has come under fire because of claims of poor due diligence before campaigns are allowed to launch, and because crowdfunding is generally not authorised by the Financial Conduct Authority.

However, Quirk said that while he sympathised with investors, everything had been done “in absolute good faith”.

The Times also says that the value of Emoov was cut by over half after the crowdfunding round was meant to have closed.

The value was downgraded from £104m to £51m. Investors were then given four days to decide whether or not to go ahead.

Quirk said that the lower valuation reflected concerns about the slowing property market.

This summer’s campaign was the second on Crowdcube for Emoov. In 2015, it raised some £2.62m.

Crowdfunding has also proved popular with other online/hybrid players.

This autumn Doorsteps returned to Crowdcube for the second time in just over a year, raising a total of around £1.1m.

Also this autumn, 99home raised £313,100 from 191 investors, valuing itself pre-money at £9.8m. Its original target was £295,000.

Crowdcube told The Times: “As we underline on our platform, investing in start-ups and growth companies is high-risk.”

The FCA warns potential crowdfunding investors: “You should only invest money you can afford to lose.”

x

Email the story to a friend

28 Comments

  1. AgencyInsider

    Chickens. Home. Roost.

    Report
    1. Moveaside01

      ‘Fool, money, parted!’…….

      Report
      1. MartinMass53

        I think you mean “Fooled, Money, Parted”

        Report
        1. Moveaside01

          No, that could be deemed slanderous? I just came up with three random words?

          Report
    2. Bless You

      Amazing really. Steal a tenner off a granny in the street you’d get prison. Steal a million and your a disruptor.

      Report
      1. 1TB

        Agents do just that daily…

        Report
  2. Ric

    If they want to take em to court, the timing could not be better…. I have just set up a Crowdfunding Page…..

    http://www.sueTheCrowdfunder@crowdfunder.con

    I am confident in it being a Crowdfunding Company suing a Crowdfunding Idea, as I have been completely honest with the extra small print. (Enlarged below for clarity)

    Your money will not be safe, your investment is at risk, and why the **** did you not think we went to the bank or just found one wealthy investor to back this idea. Nobody shares the next best thing i.e. New company valued at £300m with 20,000 investors. Honestly… come on.

    PS – The above company also helps with overseas scams http://www.YouDontHaveAnUncleInNigeria.Con set up for those confused about the inheritance emails they receive. You know the ones… that split second you think…. erm… £40m dollars, someone must be his relative.

    Report
  3. ArthurHouse02

    Was it ever revealed why the £6million pound investment was withdrawn?

    Report
    1. NotAdoctor32

      I think they probably just decided to not pour £6m down the drain.

      Report
  4. Property Poke In The Eye

    I just can’t believe a RISK warning is enough to protect an investor.
     
    These types of investments should be an advised sale.
     
    If the platform is regulated by the FCA then that’s where I would go first and see if the sale was conducted in line with the regulators guide lines.
     
    This could possibly be the first test case for the regulator.      

    Report
  5. J1

    Is “good faith” a legitimate defence ????

     

    Report
  6. J1

    I thought about approaching their local stock when this happened but guess what?

    They only have one listing in a 100 sq mile area.

     

    Report
  7. Thomas Flowers

    Bet Axel Springer are non-too pleased to see their £125 million investment in PB collapse from 360 per share to 166 today either or was that in good faith also?

    Report
    1. Moveaside01

      Their investors must be delighted, by my maths they’ve basically halved what they invested? So at what stage do you bail out because I don’t see that share price recovering much, especially with how PB are fairing in the US………………….?

      Report
      1. JVSOZ

        Anyone who invested in PB and didn’t listen to the warnings about the mess in Australia, shouldn’t be too surprised. How they handle one thing is generally how they handle everything. It’s fun watching it unfold.

        Report
    2. Property Pundit

      155.40 at 14.30pm

      Report
  8. smile please

    I find it hard to sympathise with anybody, if i am being honest.

    There is enough information out their for investor, employees and sellers to make an educated guess if investing, being employed or using to sell a property is a wise idea.

    It comes down to greed.

    Investors, employees, sellers did not see the obvious because they did not want to. Now i have my own thoughts on Quirk as an individual but as I have been censored in the past not point posting again. All i will ask is “How does he sleep at night?”

     

    Report
    1. JVSOZ

      Yes, I’ve found myself being censored even though I mentioned the truth too.

      Report
  9. JVSOZ

    From 1,067 investors only 20 Complained. Amazing.

    I might conjure up something tonight, make a nice video etc…

    Report
    1. J1

      Must be like horse racing then……

      Report
  10. mrtickle

    “However, Quirk said that while he sympathised with investors, everything had been done “in absolute good faith”.”

     

    Disgraceful justification.

     

    Did he take his family and friends’ money on good faith, too? Or did he throw in a box of cornflakes as a Thank You.

     

    Good faith is worth precisely 0.

     

    0 GBP, 0 Eur, 0 USD.

     

    Who’s more foolish? The fool or the fool who follows him? Both parties are to blame… but only one party has kept its pockets full…

    Report
  11. Woodentop

    The Times also says that the value of Emoov was cut by over half after the crowdfunding round was meant to have closed. The value was downgraded from £104m to £51m. Investors were then given four days to decide whether or not to go ahead.  
     
    True, but so many things wrong with these statements!

    Report
  12. PepeM

    Big question. Which ones next to go ?

    Report
    1. gardenflat

      PB down to £1.55 a share, watch this space 🙂

      Report
  13. smile please

    Anyone else remember the loud Mal whathisface from Rater Agent?

    Telling how amazing and game changing the review site was ….

    Think Eye ran a story on him leaving the firm.

    What Eye has not run a story on (as far as i am aware) is the collapse of rater agent.

    All these disruptors, game changers ……..

    Report
    1. Stillgame

      Has it collapsed, I didn’t know, just looked for it and can’t find website so it must have, looked on crowdcube and it raised £134,050. 3 years ago from 133 investors. Why hadn’t PIE reported this ?. Mal Macallion was mixed up with CREAM, that’s enough for me to steer well clear of anything he is involved in.

      Report
  14. 40yearvetran08

    A room without a view with restricted space for recreation, questionable ensuite arrangements and communal showers is awaiting. You do not get the option of a break clause if you are accepted and you do not need to worry about the deposit or reference fees. When people are mislead they seek recourse.

    Report
X

You must be logged in to report this comment!

Leave a Reply

Thank you for signing up to our newsletter, we have sent you an email asking you to confirm your subscription. Additionally if you would like to create a free EYE account which allows you to comment on news stories and manage your email subscriptions please enter a password below.