Claim Recovery Against VentureCrowd and its Directors

This details the grounds for the liquidation of VentureCrowd Holdings Pty Ltd (VCH), and an action in equity for misleading conduct by VCH’s directors over the past few years.

Recovery Initiative

Kuranda Industries, owner of CBP Centre Pty Ltd, is dedicated to helping investors recover their investments in affected companies. CBP has a claim of $3M against VCH, and we have prosecuted in the Supreme Court to attain a judgement. If VCH is unable to pay, this may lead to the liquidation.

The Situation

Since July 2022, VCH Directors have failed to disclose significant liabilities while continuing to raise capital and promoting the company as being worth $250 million. This lack of transparency has severely impacted investors. The directors will be investigated for the following breaches:
  • Non-Disclosure of Liabilities: Failing to disclose significant financial liabilities while raising capital from investors.
  • Deceptive and Misleading Statements: Promoting the company as being worth $250 million without basis.
  • Breach of Fiduciary Duty: Not acting in the best interests of the shareholders.
  • Capital Raising Irregularities: Continuing to raise capital despite knowing the financial instability of the company.
  • Failure to Act on Insolvency: Not taking appropriate action despite being aware of the company’s inability to meet its financial obligations.

Requirements of Misleading and Deceptive Conduct

  • Misleading Representations or Omissions:
    • Silence as Misleading Conduct: Misleading and deceptive conduct can occur not only through direct statements but also through omissions where there is a reasonable expectation of disclosure. If VCH failed to disclose critical information that investors reasonably expected to receive, this could constitute misleading conduct.
    • Likelihood to Mislead or Deceive: The conduct in question does not need to have actually misled or deceived anyone; it is enough if the conduct is likely to mislead or deceive. This means any statements or omissions that have a real and not remote chance of misleading investors could be grounds for liability.
  • Reliance and Causation:
    • Reliance on Misleading Conduct: To establish liability, there must be a causative link between the misleading conduct and the loss or damage suffered. This typically involves proving that investors relied on the misleading information when making their investment decisions.
    • Actual Loss or Damage: Under Section 236 of the Australian Consumer Law, investors must demonstrate that they suffered actual loss or damage due to the misleading conduct. This requires evidence of the financial or other harm that resulted from the reliance on false information.
  • Misleading Financial Information:
    • Misstatements in Financial Reports: Providing inaccurate financial reports or prospectuses that overstate the company’s performance or conceal significant liabilities can be considered misleading and deceptive conduct. Investors may need to show that they paid more for their shares or suffered other financial detriments due to these misstatements.
    • Impact on Market Perception: Even if individual investors did not read the misleading information, it could still be considered misleading conduct if the market as a whole was misled, leading to inflated share prices or other market distortions. This broader impact can establish the necessary causative link between the conduct and the investors’ losses.

The Company’s Recent Representations

Here are several comments from the webinar by Steve Maarbani that may now seem misleading:
  1. Valuation Claims:
    • “In 2025, we’re conservatively forecasting gross revenue of just over $14 million, which will represent a 96% year-on-year increase in gross revenue and about a 54% increase in gross margin.”
    • “Our annual revenue would reach $100 million within a few years from this product alone in one jurisdiction. At a revenue multiple of 10 times, VentureCrowd’s valuation at that point would be defensively a $1 billion valuation on Australian revenues alone from this product alone.”
  2. Success and Growth Assertions:
    • “We have already built a digital investment platform that facilitates the entire investment process for investors… We’ve raised over $320 million worth of total capital, with over 74,000 registered members.”
    • “Our investors invested over $53 million in a range of companies… Last year, we generated just under $6 million worth of gross revenue… We distributed over $7.6 million worth of income distributions to investors in a variety of different products.”
  3. Confidence in Financial Health:
    • “Our business has continued to grow from strength to strength, and we’ve continued to invest in some really interesting pieces of technology in our team and a number of other things which set us up for real scalable growth into the next phase.”
    • “At the moment, the funnel is looking pretty strong for that for obvious reasons… We’ve got a very clear line of sight as to how and when those notes will be repaid, making repayment risk very low compared to what is a very strong yield.”
  4. Product and Market Confidence:
    • “We are positioning VentureCrowd as the only capital platform founders will ever need… If this product does what we believe it’s truly possible to do, even a fraction of it, then the financial projections of the company are significantly greater than what you’re looking at now.”
    • “We’re thrilled to share that within the first 24 hours, we had eight companies organically sign up… We are comforted by the fact that organically, the VentureCrowd brand has the trust of at least eight new founders in 24 hours who found this on their own.”

In Recent Webinar, Steve Was Raising Money

During the webinar, Steve Maarbani made several comments regarding VentureCrowd’s ongoing and future capital-raising efforts. These remarks are noteworthy:
  1. Convertible Note Round:
    • “There’s a small amount of equity remaining in our convertible note round, which you’ll see at the bottom right-hand side of that screen. That raise is public; it’s available to any wholesale investor via our website. It’s a 20% conversion on the next capital raise, with a 7.5% coupon, and that’s live now.”
    • “The coupon of that note is intentionally designed to be highly attractive in order to close it by the end of March, and at the moment, the funnel is looking pretty strong for that, for obvious reasons.”
  2. Promissory Note Offering:
    • “For those that want to take a debt position, we’ve also recently opened a private offer to some of our top investors which will not be available on the VentureCrowd website. It’s a promissory note with a 20% coupon and a 24-month term.”
    • “VentureCrowd Holdings, which is the holding company for the entire VentureCrowd group, will guarantee the performance of that note, including redemption and repayment.”
  3. Institutional Growth Capital Round:
    • “By the end of 2024, with more usage data under our belt, we intend to then go to a larger institutional growth capital round at a higher valuation. It will be that growth capital round that we intend will trigger the conversion of the convertible note that we’re offering today.”
  4. Investment Strategy and Future Plans:
    • “We are positioning VentureCrowd as the only capital platform founders will ever need. Our intention is to build proprietary AI agents in the coming months so that by the 30th of June, what it’s actually delivering to you are responses based on proprietary VentureCrowd campaign experience and data.”
    • “The next 24 months are really exciting off the back of this product. This is obviously not the end of our road map; this is just the tip of the iceberg.”

Company Structure and Matrix of Interests

VentureCrowd Holdings Pty Ltd (VCH)
  • ACN: 164 416 040
  • Registration Date: 21/06/2013
  • Status: Registered
  • Company Type: Australian Proprietary Company, Limited by Shares
  • Principal Business Address: Unit 2, 34-36 Florence Street, Teneriffe QLD 4005
  1. Steven Maarbani (Appointed: 18/05/2016)
    • Address: 166 Kent Street, Millers Point NSW 2000
  2. Darren John Tasker (Appointed: 07/05/2019)
    • Address: 6 Girrilang Road, Cronulla NSW 2230
  3. Benjamin Joseph Johnston (Appointed: 14/02/2023)
    • Address: 130 Johnson Road, Mapleton QLD 4560
  4. Sean Michael Gregory (Appointed: 01/05/2024)
    • Address: 54 Queen Street, Woollahra NSW 2025
  1. Darren John Tasker (Appointed: 02/01/2020)
  2. Philip Kenneth Gordon Leighfield (Appointed: 26/04/2022)
Interests Held in Other Companies
VCH holds significant interests and controlling stakes in numerous subsidiaries and related entities, including:
  • VentureCrowd Healthtech Pty Ltd
  • Carrara QLD Development Pty Ltd
  • Riverview QLD Development Pty Ltd
  • Cannon Hill QLD Development Pty Ltd
  • VentureCrowd SASF3 Pty Ltd
  • Moggill Ferry Road Pty Ltd
  • Wynnum Road Morningside Pty Ltd
  • Viaduct Harbour Avenue Pty Ltd
  • Vest Platform Pty Ltd
  • Park Ridge Road Development Pty Ltd
  • VentureCrowd Property Australia Pty Ltd
  • VentureCrowd Services Australia Pty Ltd
  • Albany Creek Development Pty Ltd
  • VentureCrowd Connect Australia Pty Ltd
  • VentureCrowd Development Holdings Pty Ltd
  • VentureCrowd Property Pty Ltd

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Eponine Wust

Lead Platform Architect

Eponine Wust is the Chief Operating Officer of Oroshiuri Systems. She is a highly experienced business executive and entrepreneur, with a passion for leveraging the power of technology to revolutionise the real estate industry. She has a wealth of knowledge in the field of real estate investment and has been featured in numerous publications, including The Financial Times, The Economist, and The Guardian.

Dirk Westera

Lead Systems Architect

Dirk Westera is the Chief Investment Officer of Oroshiuri Systems. He is a highly experienced financial analyst and investor, with a deep understanding of the real estate market. He has a wealth of knowledge in the field of real estate investment and has been featured in numerous publications, including The Wall Street Journal, Bloomberg, and Forbes.

Susanne Keene

Venture Partner

Susanne Keene, commonly known as Sussie, is a highly accomplished professional who holds the dual roles of Venture Partner and Chief Finance Officer at Oroshiuri Systems. With a wealth of experience in finance and a keen eye for strategic investments, Sussie has been instrumental in driving the company's financial success and growth.

Marc Withnall

Venture Partner

Marc Douglass Withnall or known as Marc Withnall is a real estate developer, asset manager and businessman based in Sydney, Australia. He is the CEO of Scootalife, Oroshiuri, and Kuranda Industries, which deal across the entire real estate spectrum.

Nick Wells

Venture Partner

Nick Wells is the former owner of Better Medical, a company he expanded from a single GP clinic to over seventy clinics across Australia. Mr. Wells has an extensive background in management consulting, investment banking, corporate governance, capital markets, and fast-growing businesses.