Tech entrepreneur Luke Massie has insisted he’s got “nothing to hide” after he bought his business Vibe Tickets out of administration.
In an exclusive interview with BusinessCloud the 25-year-old said he was deeply hurt at suggestions on social media that he’s “planned” the outcome, insisting he’d done everything possible to save it.
Massie has now announced he is giving away shares in the new company to his original crowd investors who looked set to lose out as a result of the administration.
The award-winning businessman acquired Vibe Tickets last week after administrators were called in on 30th April, when plans to raise additional funds did not come to fruition.
Prior to entering administration, the Lancaster-based firm had raised a total of £1.7m from Matt Newing and his company Elite Telecom; ANS Group founder Scott Fletcher MBE; Vela Technologies Plc; and almost 300 investors on Crowdcube.
Massie said he was “backed into a corner” and had no choice but to place the company in administration – and dismissed claims that it was planned as “ridiculous”.
“It couldn’t have been planned because I had an agreement that £1.6m of funding was coming from shareholders – that’s where all my energy and focus was.
“The suggestion was that I planned on the company running out of cash to close it down and then buy it back at a fraction of the price of what it’s worth so that I can get rid of all the shareholders so that I’d have 100 per cent of the pie and have a go again.
“No one in their right mind would want to go down this route and to have it portrayed that this was planned…it was anything other than that,” he said. “I’m not hiding and I’ve got nothing to hide.”
As a result of the administration process, Matt Newing and Elite Telecom, Vela Technologies Plc and Scott Fletcher have lost £600,000, £400,000 and approximately £500,000 respectively. Both Vela Technologies and Fletcher have agreed to invest in the new business.
Massie said he sought independent legal advice before calling an emergency board meeting, during which he asked investors to inject £150,000 into the business to keep it afloat.
But due to a “very restrictive” shareholder agreement that was in place, the existing backers refused to provide any additional funds until new legal documents were drawn up to give them equal rights on the board.
News of Vibe Tickets’ administration sparked a row on LinkedIn over the weekend with Newing criticising the way the situation was dealt with as “disgusting” and claiming “the company could have easily kept going but at the end there was only me who was willing to support it”.
Fletcher posted on LinkedIn: “I was a large investor in Vibe and continue to back Luke – I can say with 100 per cent certainty this wasn’t Luke’s fault other than being naive when he was just 20 and signing up to ridiculous terms via an investment agreement.”
Massie told BusinessCloud: “The fact that some people think I planned this to rip people off…that’s what I think has hurt the most.
“I honestly believe that in this world the only thing you have is your name… and to have that publicly questioned when no one knew what went on and no one had the facts. One person even mentioned that I am young and naïve. What’s age got to do with this? At the end of the day, I’ve probably brought in a lot more investment to the region than many other people have.”
Massie did not reveal how much he paid to buy the start-up back but told BusinessCloud that he resorted to borrowing and selling personal assets – including Bitcoin – to help foot the bill.
“I had 24 hours to try and find the cash – I wasn’t willing to give up on it,” he says, insisting that the move secured 22 jobs.
“We have an amazing community, an amazing product and an amazing team and I knew if I bought the company back that I’d be able to raise more money.”
Although the entrepreneur admits he’s “extremely gutted” to have gone through an administration process, he says he doesn’t see it as a failure.
“At the end of the day, Vibe never failed,” he said. “The product is in the best place it’s ever been, the team is stronger than ever, the market opportunity is still there and I’ve got funding moving forward.
“It just so happens that because of a conflict, we had to go through an administration process which wasn’t nice but we’re through it. In any other country I don’t think this would have been seen as a big story.”
Massie said Vela Technologies Plc and Scott Fletcher have both agreed to inject £200,000 and £500,000 respectively in the new business – and that he’s close to closing a new investment round.
“I’m in the final talks now with an investor in London and I’m hoping to get that over the line in the next month or two,” he said.
“The new vehicle has got no shareholder conflicts and it’s well funded. The future looks good; we’re continuing to expand and recruit and we’re going to continue growing the community.”