Kath Jones – £100k debt from funding that fell through

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Julie Wilkinson  00:03

Hi, I’m Judy Wilkinson, and I’m a chartered management accountant. And I’m excited to be launching the build and exit podcast. This podcast is for business owners and entrepreneurs who are looking to expand their business portfolio by acquisition, or at some point in the future, when to exit their business. We’re going to bring real life stories and experiences of people who have grown by acquisition, who have exited their businesses, and other areas of business such as funding and cash flows. So there’ll be lots of opportunity to learn different areas of business and how you can in the end, transition your business from a lifestyle to an asset to look forward to seeing you soon. Hi, and welcome to the build and exit Podcast. I’m Judy Wilkerson, and I’m the owner and founder of orcas and accounting solutions. I started the podcast off the back of the work we do in my firm, we specialise in mergers and acquisitions. And we have guests on the show that talk about business growth, Exit Planning acquisitions, and really just talking about how we can develop or grow a business. So I’m really excited today to have Catherine Jones. She’s the founder and director of the think wine group. And it’s a really interesting topic today a little bit different to what we normally do, but I think it’s really good to have a bit of variety. So Katherine’s owned the sink and wine group for four years, and had a bit of a, we could say, mishap effectively, and we will go into it more in the podcast, but effectively lost about 60k from surpised agent who stole some money. She subsequently then went on to get some funding, which we’ll talk about went on a little bit and then the funding didn’t materialise. And that ended up her in 100k. of debt. However, Catherine is still here with a successful company. So it’s going to be a really interesting story. And I think, positive one for a lot of people to say yes, things go wrong, but we can still make it. So I just want to say thanks for coming on. Catherine,


Kath Jones  01:58

though. Thank you for having me. I appreciate it. And yeah,


Julie Wilkinson  02:02

tell us a bit about a background and why you came on the show, you know,


Kath Jones  02:07

yeah. So I actually have two businesses. We’re here primarily today to speak about think buying group Bob. And the whole reason think wine group started was due to my influence and marketing background. So I have another company called we are social nation. We manage people with really large social media following and primarily Instagram and Tiktok. So most of our clients have between 500,000 followers up to say 10 million followers, and the whole reason think wine was ever founded. So think just so you know, is it it’s a premium, it’s a low sugar, low calorie, it’s vegan, it’s organic, it’s low sulphate, it’s basically as good as you could make a wine but without removing the alcohol. And because it wants to keep the fun part quartz, but it’s just you know, as healthy as you could get it without removing alcohol basically. And the whole reason I found to do it was because I was working with E commerce businesses. And we were growing then rapidly through the use of influencer marketing. And I realised that I wanted my own product to utilise this model on and obviously sell wine direct to customer via influences. Also my influences were all really health conscious. So they were turning vegan, and they were big on sustainability. They were doing a keto diet. So now we’re even diabetic. So it raised the question of, you know, what, what are we missing? And it is like a low sugar low calorie, globally branded. So that’s, that’s why we launched so I still have social nation. It’s influencer marketing. And then I have thin client as well, which, obviously is the story with, with all the tales to tell.


Julie Wilkinson  03:51

Yeah, they really thank you. So we’ll get into the nitty gritty then. So the other you mentioned to me that you had this third party agent, I suppose the end result was you lost 60k from this partnership, so maybe you could just tell a bit of background about how that why that formed and sort of how that came to fruition.


Kath Jones  04:14

Yeah, clubs. So when I was starting the company, I knew that I wanted the business to be it was going to be a bespoke product, it was made specifically for me it was my recipe, I would create a I didn’t want a wine that was off the shelf that I would just put my label on and call my because effectively that’s what most wine brands are that you see inside you know Tesco ads that Aldi that probably three of them and the exact same product but people are going to different reblogged from a different brands. So when I was originally trying to create think why I needed to find a winery that was ready to become like my partner. And so you know, they’d work alongside me. It was really difficult because I don’t speak Italian, I guess find and you Go and visit these wineries without any pre existing relationships. So I went online and I found a wine agents and this guy called Giuseppe. And I met him in Italy. When I went, we got on life, a house on fire. And he was amazing. And he’s worked in wine for many, many years, he drove me to Well, I went back to and forth to Italy about five to 10 times. So every time I would go, he’d meet me at the airport, he take you out, and he checked me into my hotel, he was really, really great. And in the end, working alongside him from once we found our winery, and then we, you know, we were able to create this specific wine. And we were able to negotiate on the price as well, because obviously, it just spoke the language, he got the pre existing relationships, it went really well as a partnership for I mean, bearing in mind, I worked for him for two years prior to launch. And so we knew each other for four or five years, by the way, this actually happened. And one day, I paid him for the why. And he just didn’t pay the winery, and he just dropped off the base there, you know, the emails were bounced, and the phone number never answered or was off. Nobody knew where he gone, the winery couldn’t find it was just crazy. And like, at one point, the winery actually called the police. And the police would just say, we wouldn’t do anything about this, like this is, you know, not of interest to us, like take them to court if you want to. But the amount of money it will cost you to take someone to court in Italy or something like this, you know, the math isn’t Martin. So it’s not something that I could really have done, because it would have been a risk, and it would have been a risk of me losing another 50 grand and just try and together. And so, you know, we tried our auctions, we sent a couple of legal letters, we contacted everyone we knew who knew him. Basically, nobody wants to to pick it up, no one wants to help. And in the end, I realised so UPS court is like this, Modi is not coming back. And he’s this further for the face of the earth. So I had to kind of admit defeat and just be like, right, I’m gonna have to find a way to, to move on, which is when I am, as I said to you, when we spoke, I never really wanted to look at an investor yet because I was bootstrapped. And, you know, cash was tight, but I always had that kind of 50 grand buffer in the bank. And so I knew I could carry on for a little bit longer without needing to onboard. So when I wanted to wait it out as long as possible before, so that when it didn’t get someone you know, I was gonna get the correct price and stuff on the shares. So I went out and started looking for investments and, and just put myself out there really I was, I guess, networking with a lot of people and gotten introduced. Do you want me to get into this point? Yeah. Well,


Julie Wilkinson  08:01

I just think if you’re just if you go to the so the agent, then that took the money when you signed up with the agent. Did you have that disease? Or did you have contracts and things in place?


Kath Jones  08:11

Yeah. Yeah. Yeah. So since that doesn’t matter in Italy. And self? Well,


Julie Wilkinson  08:19

I think we have a similar thing. You really in the UK? I think it’s hard, especially through companies. But how many times did you ordered through? And then is it because it was couple of years? Most of the


Kath Jones  08:31

really, I’d been ordering V IDs, it was multiple times I’d say we would usually ordered at least twice a year. So voted at least eight times off and everything’s always been fine. And bearing in mind the relationships great, because I’ve met him so much over the years that we’ve got up for dinner and we’ve had you know, we’ve grown a friendship if anything, which is why you know, it was so you just just hard to accept and heartbreaking really.


Julie Wilkinson  08:58

But ended and so do you have a new agent? Now now?


Kath Jones  09:03

Why go direct now?


Julie Wilkinson  09:04

You go direct to the factories yourself now, for each route


Kath Jones  09:08

trusting anyone again? No unfortunate. Yeah, no, no, it works like that. He’s given all agents a bad name. Only in my mind, of course. But yeah, I


Julie Wilkinson  09:17

wouldn’t. I wouldn’t do that again. No, because I suppose paying anyone up front this exposes that ends up being a bit of a risk, doesn’t it? If you’re always paid up front, so yeah. So you went out to find the investor. There’s your networking, and then I know you had a bit of a difficulty with the investor because in the end, it didn’t materialise. So how did you end up finding the investor? I was actually introduced by


Kath Jones  09:42

a friend so I think that is where my defences were down right away. You know, if someone you know and you trust is introducing you to someone, then naturally, you’re a little less against cautious also I don’t think I mean, I’ve I’ve obviously experienced like theft, which from Giuseppe, but also they trump a member of staff previously, they’ve stolen from me. So I’ve, I guess I’ve, I’ve experienced that, but I’ve never really experienced, like, reward as such. And, and so I can’t say that like, I ever even like considered that an investor could be like fraudulent or a fraudster, I know, there’s fraud. When I think of fraud, I’m thinking of very new people for an in houses and saying like, Oh, hi, I’m your bank, give me some money or, like, watch your login, you know, when you get the text, and it’s like, oh, where the real mail. That’s what I think of when I think of fraud. I’ve never really got one and literally pretending to be someone they are not. That seems like it’s just the movie. But that’s basically what happened to me, I got introduced to an investor, buyer, a friend, that’s where I really, you know, kind of trusted that he was legit. And we got we went through the whole process. I met with him in America, who is an American, and we met in the US, you know, it was all great. He taught a great game, and told us that he had an island in Australia that he just bought the ad, all the press releases to prove it, you know, I Googled, the islands Googled his name, it’s all there is by owners island. So he was very, very, very good. And fraudulent one way, or not the only one who has been talked to since since this happened to me, I actually posted all about it on LinkedIn. And I’ve had about 15 people message me saying, I’m going through this team, so we still at it, despite like, you know, we’ve done everything we found, like, tell them, please tell the FBI who fought and it’s forward. And you know, and I’m on LinkedIn, all of that. And yet, he is still out there. But he’s very, very good at what he does. And he has she really believed and so we went through everything, you know, the whole the contractual stage, you know, everything was okay, we’re gonna get you in, we’ve got shares in the hardrock cafe, we’re gonna get you into the hardrock cafe, we’re gonna do this, the other so we had, we truly believed that, you know, we’ve, we’ve made this is amazing, you know, it’s pulled us out. But it actually turns out like that he was literally just not who he said he was. And he doesn’t actually have a penny and he doesn’t actually have a fund. And it was all just a lie. Now people always say, what use is that for him to pretend and to give you money? That’s what I thought as well. And the whole reason it went on for a whole year is because I couldn’t believe that someone would pretend to give you money. Like I’d get it if he was seen. And when he asked me if I was invested in his fund, then I understand that because obviously the outcome is you’re getting money, but some just mess along three year, you know, to the point where it was full ghastly in, like count, of course, the money’s gone. I’ve just transferred it, like telling me you just transfer the two minutes ago, it never came. And it was just constantly ghastly, and but I just couldn’t believe why would you string so long if it wasn’t a bunch of them running? Anyway, it turns out the way they’re set up, so they have like a fake fur. And so they were using, like, their allegiance with me as such, like to get other people to put into their fund. So I was one of a couple of other businesses. So they would say, you know, oh, look at this stack this this incline, if you invest with us, you’re gonna have shares I think, why? If you invest with, I don’t know, but I’ll just make up a name. Poor why’d you know, they did, then, you know, you’re gonna get shares in pool why? Basically, they had all these companies with all our debt, and they were pretending they were associated with us, showing these people our LinkedIn pages and everything, to get money out to them. Okay, taking money from the father’s and embezzling out or whatever they were doing with it. But we obviously as the businesses that were being him, he was pretending he was going to invest, then we obviously never seen any of it. So these are the people are thinking that they’re investing in us. And then I can just keep an eye on it, and we’re never going to release it.


Julie Wilkinson  14:17

And oh, blimey, so is that had any repercussions on you? From the investment side of things? Because that suppose that xao Are they they’re promising people shares in your company, and


Kath Jones  14:28

I don’t just die as directors that because it’s like, if you put into our fund, then for example, x again, it’s gonna be these four businesses or whatever, but the deal is always between the person and the fund. So the only reason I know this is because people have followed me since on LinkedIn and been like, Hello, have you heard about us because you know, we’ve heard about you, because we got pitch that we were gonna be you know, work and why The VA. And I’m so since my ghosts come out, people have seen it and gone. Oh yeah. By the way, they, you know, they use your name to kind of legitimise themselves. And, and we thought, you know, we were going to be involved with your business and your growth. And so but no, no one’s ever come at me because of it because everyone is aware that it is him. So the war is not between that side and that side the wars purely on him. Yeah. So


Julie Wilkinson  15:31

he went a year. I mean, when did you finally make when did you realise Hold on a minute, something’s not right. I’m just I’ve got to stop this.


Kath Jones  15:39

I didn’t realise I didn’t. I didn’t not realise I just blanked out that, you know, I couldn’t bring myself to believe it. Because if I brought myself to believe it, that would mean that my company was going to be basically in an event. Because what had happened was, I had started because of this deal going through and it all being so legitimate, and you know, our deal signed off. I’m saying, right, we need a van because I can’t manage deliveries anymore. I’ve only got a sport car, I need a button to be able to manage the distribution. Yeah, go and buy a van just getting on finance, it’s fine. Your money will be in your bank next week. So like, you know, crack on. So I do things like this, I would buy a van. I’d you know, so I’m racking up debt. And I’m thinking, by the time I kinda it kind of hit me that it was fake. And like, wow, if this is fake, I’m in so deep that my company will not survive. That’s so Surely it can’t be fake. And that’s why I kind of continued on and say six months. And I knew there was bad news. I knew there was a big weekend for another six months, because I was desperate to believe. And I didn’t know how else I was, I was giving it out to me. But then finally, like, I mean, the penny dropped long before if I’m honest, but like when, when the penny dropped to the point where I can’t do this for my own mental health, because it’s driving me nuts. And I’m just going to accept that this was all alive, then only then was able to start trying to recover. Yeah,


Julie Wilkinson  17:17

I think it’s interesting. I mean, I see that it although yours is in this investor scenario, I think it’s quite normal, like for people to sort of, I suppose, in a way bury their head in the sand. And I see it a lot at the acquisitions, you know, when people want the deal to be true. So they’ll kind of like, know, the sellers not giving them the information, and they’ll try and rush to head to terms, thinking is all going to be, you know, hunky dory, when they get to do diligence. And then, you know, deals are just dragging on for months, probably even sometimes over a year, and they never get anywhere because ultimately, it never improves. Yeah, and potentially financially. They’re not as, like, maybe you were hit financially. So it’s not always a financial hit. But I think it’s the emotional here of something like that as well is


Kath Jones  18:05

the worst part of 100% it is the worst part. Because in my lifetime, I’m not an anxious person, I’m just not I’m not naturally like that way. And so in my life, I’ve never lost sleep over anything. Until that’s


Julie Wilkinson  18:17

two things relatively closely with the angel investor.


Kath Jones  18:22

That’s what it was. It was you know, as a series of events and, and literally thinking, right, if this doesn’t pay off now, like, I’m gonna lose my business, and I’ve got stuff and anyway, the whole thing just exploded. And, and that is what left me in such like a state in terms of like, my mental health, which I’ve never experienced before, to the point where I, I was always, you know, a bit sceptical, when people would tell me like, oh, I can’t sleep at night, because I’m worrying over you know, it’s something small, which, to me, it’s very small, obviously to them tonight. But I could never this is because I’ve ranked mean, so small, and so insignificant, like, how are you going to lose sleep over that, because that’s just not that way. And then all of us are the nominee isn’t sleep, and all of a sudden, I’m thinking, Oh, my God, this is all these people feel. This is people mean, when they tell me that they’re anxious, and it’s making them reliant. They can’t sleep at night. I understand now. So in a way, I suppose, you know, for my own self development, and empathy. And it has been, I guess, a learning nav and maybe some of them are needed to go through. Yeah. And I think,


Julie Wilkinson  19:33

well, obviously, you did get through it, because there’s a company’s name here. So we will touch on a minute, but I suppose if someone is going to go through either working with an agent or an investor from saw the things you’ve learned, if you could go back or you could say to somebody, this is what I might have done differently. I mean, have you reflected on that? Do you think there is anything you could have done differently to potentially prevent these things or mitigate They’re all stop it. So you know, is there something that you might do differently?


Kath Jones  20:03

It’s so hard though, because for example, with just that being, you know, I did everything by the book, I has a contract and as steel contract as far as like the UK law and EU law is concerned. But when you realise the costs of actually taking someone to call you contract means nothing. Because if you’re owed 50 grand, but you’re going to spend 50 grand trying to get it back, there’s just no, no sense. And that to me, to me, I feel like the legal system is a problem. And yeah, like, I had that wrapped up as legally tight as I possibly could, then I have this great, great relationship with them. Because I’ve worked with them three years. So obviously, this TED thought or of mine, I’m not even thinking I’m just again. So for that point, I truly don’t think this module because I’ve done differ, agree that apart from maybe get a better good gut feeling on a human being, because, you know, for me, I trusted them. Truly and wholly. So yeah, I don’t feel that on that point. There is really much I could have done while I was on the like the fraudulent investor point, yes, that there must have been things that could have done because this was not his first rodeo. He’s been doing this for years. So if I would have investigated further, I would have been able to find more lawsuits against them. I would have added it to due diligence, but it was mainly like, it was mainly Google in and you know, finding articles on them. And I knew that his name was his name, like, I knew where he lived, all these types of things. But what I didn’t realise like, it’s all the things that you know, he misspelt in like, oh, we worked on so at the Hard Rock Cafe. I should have probably picked up the phone and been like, hello, world Rock Cafe. Have you ever heard well, this guy? Yeah. All


Julie Wilkinson  21:56

made decent money laundering checks on the companies Exactly. Done some money laundering checks you might have found? Well,


Kath Jones  22:03

yeah, maybe. But I think the problem is there is that they just shut things down and staff them again. And I think it’s the Roman Arabian as well. I feel like I would have delve deeper if it was a UK company. Because you’ve got Companies House, you’ve got a UK solicitor. He can like, Look up, look at things and you know all about all the lawsuits that were happening. Whereas in America, it’s like, everything’s done in a different state. They cover the tracks, they’ve got all the right press things. I don’t know. There’s definitely more I could have done. And I should have specially, you know, I shouldn’t have just gone Oh, as an introduction from someone I trust. That was me. And it’s fine. We shouldn’t have done that. Yeah, I should have straightaway. Been thinking, Wait, is this too good to be true? Because it sounds like it is. So it probably is. That sort of thing I’ve learned now. I’m like, if it sounds too good to be true, it probably is. Because why is this guy just going to come to me. I’m not in the best place financially, but he’s like trying to throw all this morning at me. He’s, you know, begging me to come and be the only wine on his island and the only wine or hardrock cafe. I should have gone. This is too good to be true. And then for about a foot by the time I did that it was too late. I’d already you know, yeah. Nothing I can do. Well, on a on a positive


Julie Wilkinson  23:22

note, though. The company is still here. So although you thought I can’t survive it, you obviously did. So yeah. How how if you you’d obviously lost at this point, the 60k from the agent. And now you’ve racked up this debt, which I think was about 100k or something that you said to me. So how did you then move forward without the investor then basically, I


Kath Jones  23:45

was about to do a CRO fund plan. I thought right. The only way I can survive this is if I go cash quick. And you know, the way I’m thinking about doing this is a craftsman. So that’s what I need to do to everything. And then people started I told my story on LinkedIn. So first things first asked for some help. Because it was eating me up inside it was making me sick. Nobody knew. People knew like, obviously it worked with me or me more than dad whatever, but nobody knew. So people going oh, Cathy smashing it and I’m gonna I’m not I’m not telling the why. I’m just like, Don’t dare say that to me. You know, I’m horrified by people that just trying to be nice. They think like, Oh, you look pretty doing really well. And I was like, I’m not doing you know, don’t say anything to me just I was I was I think I was probably vulnerable around that time which like don’t speak the mail and I don’t want to hear came a point where I was like the only the truth will set me free. And I did a big video on LinkedIn and I said everything that had happened. I was like, Please help me. I don’t know what to do. I need an investor I need to raise money. I need you know, literally, this is where I on. I’ve spent days and cry and Come on, I’m gonna lose my business, please help. And actually people helped, you know, whether it was people buying a bottle of wine off my website, which gave a tiny bit of catching, like, it’s in the business, to people introduce me to investors, to people ads and meatsuit groups, people saying they would do work for me free, you know, small bits of consultancy work that they could try and help. I had so many people, Boxer to help me. And it pulled me out of the darkness, I think I was like, wow, people are good. And there is going to be a way to survive. The reason I actually survived is because of found another investor in the end, the very legitimate, nice, amazing person. And then after finding that amazing investor who got me through the fence, but I’m still not fully out the other end, by the way, you know, things are still a struggle. But I’m here, and we’re gonna survive, it’s, it’s fine. But we’re not like fully out of it. Like we’re all clear, full of money. It’s not like that, it’s you know, we’re just, we’re scraping by what I’ve recently got a huge, huge, and I won’t go into detail on this, but a huge deal with China selling a large amount goes to China. And that will, that will when that actually is finished and done. That will pull us completely out of like, all debt, all issues, and it will give us cash flow, you know, to run constantly for the next few years. So that’s where we are and still are not falling out. You they’re still surviving. And we’re going to come up with the site. Great. So yeah, that’s where we are.


Julie Wilkinson  26:39

Well, it’s brilliant coverage. At the end of the day. Yes, there’s things that have gone wrong, but I think the most important lesson really is you can get through it. And you did find another investor, I didn’t realise he got one, but that’s really good. But the fact is, is yeah, you put you got you got through the bad stage and you know, managing to pull yourself back out the other side, Anya, so it’s an interesting story. Because, you know, I think especially in investments, I personally think so many people are always pushing for investments sometimes about I mean, yours was a different scenario, because obviously, you’d love to have to go buy cash. Yeah, I do hear a lot of people go, Oh, I need to speak about money. And actually, sometimes they don’t look internally first opportunities. I mean, I know we’ve gone into businesses and turned probably 70 80,000 pounds cash around within a within a matter of four, four to five weeks just from changing different things internally. So I do think sometimes people are quick to just always do they need large third party investments, when actually there might be some short term things they can do to help mitigate the situation without that need. Yeah, yeah. Now,


Kath Jones  27:43

I could say yeah. Anyway, thanks so


Julie Wilkinson  27:46

much for coming on the podcast. I just want to say to our listeners, thanks for listening. We’re not too far off 4000 downloads now. So yeah, I bet it’s a new podcast, we launched a new podcast in 2020 for YouTube, sorry, YouTube channel, because we was on my company account. But now we’ve got a built in exit YouTube. So I just like to say to all the listeners that if you live out the episodes, hit the subscribe button, or, you know, leave us a rating and review because it helps more listeners find our channel. And I’ll see you again soon. So once again, thank you so much for taking the time to listen to our podcast. I hope you found it useful. If you think there’s anyone else in your network that might benefit from our podcast, and please share it with them, either just click the link and send it to them, or send it in a Facebook group or other social media channel. Don’t forget to subscribe. So other podcasts come to you directly as of when we launch them. So I’m really looking forward to seeing you next time. We’ve got some really exciting things coming up. And we’ll see you again soon.