Triumph Wine Group Crowdfunded Financial Offering Marred by Inadequate Disclosure, Misleading Language, Flawed Business Plan

This article has an update:

WII article prompts Triumph Wine Group to amend SEC filings & web site,
lacks vital state permit to legally make wine; disclosure errors persist

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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• reliance on out-of-date industry information,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.

 

The TWG offering (regulated by the SEC) is being handled by FlashFunders (regulated by FINRA).

 

A summary of the TWG offering is at this SEC site: Form C: Filer Information Summary for Triumph Wine Group. This article will go over the full detailed SEC filings further below.

 

TWG says it is trying to raise $1 million in order to increase production from 3,500 cases per year to 30,000–40,000 cases.

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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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NOTE: Lewis Perdue has decades of experience with public offerings as a journalist (The Street.Com, MarketWatch, Dow-Jones, Wall Street Journal.com) and from personal experience as the CEO of a financial payments start-up (PocketPass) which was acquired by a public company after implementing the first operational mobile payments company. Lew founded, operated and later sold Wines West, a wine importer in Los Angeles that introduced many of today’s iconic high-end Italian wines to the West Coast.

 

DISCLOSURE: Perdue owns no stock, equity, debt, or any other financial instruments or interest in, or connected, with any alcoholic beverage business other than this publication.