Whatever the terminology, I don't believe that it is worth the paper it is printed on. I provisionally arrived at this conclusion from page 3 of the prospectus, which spells out that of the £600,000 being raised, only £390,000 will go to the company. The rest will be dispersed in professional fees and other expenses connected with the issue. If only two thirds of the investors' money is actually applied to the business at hand, the company must achieve 50 per cent greater success with the funds at its disposal than a company which raises funds directly. In a competitive world, that is a mega-hurdle.
As I read on, my convictions firmed up. Beautiful is a publisher of traditional books, audio books and music downloads. Between starting business in 2005 and earlier this month, it raised £400,000 in cash via share issues, a net £86,000 in bank loans and £36,000 via directors' loans (these loan figures are as of its balance sheet date, June 2008). So that was £522,000 of cash in.