|Triumph Wine Group Crowdfunded Financial Offering Marred by Serious Errors, Inadequate Disclosure | January 15, 2018
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From editor & publisher, Lewis Perdue
January 15, 2018
Triumph Wine Group Crowdfunded Financial Offering Marred by Serious Errors, Inadequate Disclosure, Misleading Language, Flawed Business Plan
Triumph Wine Group makes some pretty good wine, but its online, crowdfund offering fails investor scrutiny.
Key among the issues is the fact that TWG is asking people to buy a winery, but it doesn't own a winery to sell. In addition, the online crowdfunding site suffers from:
- failing to include a visible offering statement on the page,
- deliberately hiding offering statement links on the crowdfunding site so that they are not visible to web site visitors
- discrepancies between the crowdfunding page and the offering statement filed with the Securities and Exchange Commission,
- lack of wine business experience among several key executive functions,
- extremely over-optimistic financial projections,
- misleading (or easily misunderstood) language,
- reliance on out-of-date industry information,
- misinterpretation of market data,
- mistakes in implementing key sales and marketing strategies,
- clear evidence of impending failure in their Direct to Consumer marketing, and
- No evidence of a distributor network.
Triumph Wine Group declines to respond to WII request for comments, corrections.
Wine Industry Insight emailed Triumph Wine Group on Friday, January 12 asking for comments and any corrections.
A copy of the draft article was enclosed in the email. TWG refused to refused to address any of the issues. Comments, corrections and other information will be added when or if it is received.
What is Regulated crowdfunding?
First of all, it's necessary to know that the Triumph Wine Group (TWG) is a "regulated" crowdfunding, which TWG says is the first Title III in the wine industry:
Title III Regulations resulted in the creation of regulation crowdfunding offerings which are regulated by the Securities and Exchange Commission (SEC). The funding portals that host these sorts of crowdfundings are regulated by a non-profit securities industry organization FINRA, the Financial Industry Regulatory Authority.
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Also in this issue:
"Own a winery?" That's not what TWG is selling (because they don't own one to sell).
Misleading confusion in the difference between "winery" and "winery"
Will the Securities and Exchange Commission be amused at being confused?
Winery and winery: Crowdfunding site dances a fine line
No winery, but TWG's name is on a California's Type 02 Winegrower license, but not primary owner
Web of people and LLCs obscures actual corporate governance
No offering statement visible or linked to from crowdfunding page
Offering statement absence puzzling
The Triumph code. Invisible links to offering statement deliberately hidden and inaccessible to site visitors
SEC-filed Offering Statement Offers Serious Cautions for crowdfunders
Securities buy a sort of wine club, but not ownership of a winery
Looming deadline (Jan. 31) and lagging investments
$545,000.00 under a Regulation D offering? Nope. Not TWG
Serious weaknesses in marketing sales & distribution + vague and/or overstated and outdated assertions
Big Mistake #1: Over-estimating sales growth
Big Mistake #2: Betting the farm on Millennials
Direct-to-consumer sales DOA without quick refocus
Shipping charges kill DtC. TWG not competitive
Sales & distribution not as rosy as presented
TWG sales history misrepresented
No wine distributors specified
A shortage of management wine experience
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