Privanet Securities Oy myy kyseenalaisten yritysten arvottomat osakkeet sijoittajille joukkurahoituslain avulla. Oululainen laturifirma Asmo Solutions Oy on jo konkursissa, mutta tämä oli vain jäävuoren huippu. “Megaluokan vedätykseksi” kutsuttu Space Nation (ent. Cohu Experience, ent. Cohu Entertainment) on johtanut sijottajia harhaan annin yhteydessä. Luvattu tuote ei vieläkään tullut, ja firma jäi jo yli 80 miljoona Euroa tavoitteestaan.
In February 2017, Privanet Securities announced a new record on its AROUND crowdfunding platform: Finnish startup Cohu Experience Oy had successfully raised more than €3,2 million from investors, the first million of which in only 43 minutes. The business idea was to organize a competition via a smartphone app, where the winner would be going to space. The app was announced for fall 2017, and the contest should begin in early 2018, with the first space flight in 2018 or 2019 at the latest.
Cohu Experience was founded as Cohu Entertainment. It renamed itself to Space Nation in Fall 2017. Its achievements have got a lot of media attention so far. It would have been better to check the facts every single time, instead of reprinting press releases.
The Forbes Fake
Cohu/Space Nation claimed in many press releases in 2017, as well as during its public offering, that “Forbes” had ranked it as Europe’s most promising company for 2017. It’s reassuring for a wannabe investor, when such a respected body analyses the offering company and confirms its great potential.
Privanet faking facts
This was a complete fake.
In reality, there has never been such a ranking. A staff writter at a Forbes.com blog had composed an opinion piece, where he listed some interesting european start-ups, and accidentally Cohu was described first. The text says clearly, that it’s only a personal opinion – not a “Forbes list”, whatever that means.
The NASA Agreement
The company told in September 2017, that it had entered a sensational (“giant leap”) agreement with NASA for broad-scale commercial cooperation “never heard of before“. In fact, this was a simple sign-up for a Space Act Agreement. NASA said that clearly in its own press release: The collaboration is limited to content provision, there is no further cooperation, and the agency has had similar agreements with other apps and educational programs before.
UNWTO Member
Cohu/Space Nation made the historic achievement to be the first UNWTO (affiliate) member from the space travel sector. This looks more profane with a glimpse at the other UNWTO affiliates on the same list: Space Nation meets Freixenet and the Santa Claus Foundation.
CU!
Office Space at the ISS
The space travel pioneer then announced it had bought “office space” at the ISS for rent to researchers or other interested customers. In fact, they paid £17.000 for a 50x50x30cm box. Space Nation gave conflicting accounts what to do with that box. Anyone could be sending a 10x10x10cm experiment to space – or SpaceNation could conduct “own exciting experiments”. Because it’s not a scientific organization, and has no competence whatsoever in the field, it’s obviously a £17.000 PR gag.
Where’s the money?
The bigger problem than the questionable PR stunts, however, is the failure to accomplish the milestones of Cohu/SpaceNation’s business plan. According to the documents published for the public offering, the company should reach a profit of nearly €84 million by May 2018.
Bold.
That’s two months left to make 84 million.
The obvious reason is the still incomplete app. It was first announced for September 2017, then for early 2018, then February 2018, and it’s still not published. Even if it hits the market this year, and some kind of contest starts, there will be no spaceflight as promised.
Virgin Galactic, the only possible carrier for SpaceNation’s suborbital flight, was booked out in May 2017 until 2021. 650 More than 700 persons were are already on the waiting list. Even if SpaceNation has booked in advance (which should be impossible, VG only accepts individual applications): regular flights have to start yet with the VG spacecraft still undergoing tests. There is no TV content or licensing rights to sell yet.
Stupid money is out there
While I would certainly love to see a civilian going to space, organized by a finnish space travel start-up, it doesn’t look good. Space Nation promises that the app would produce income and user retention as did Supercell with HayDay or Clash of Clans. But space travel and everything related to astronaut training is still more complicated – and actually more boring – than building virtual farms with your thumb on a smartphone. The sky does not look as good on a 5 inch screen as it does from the Hubble Telescope.
SpaceNation will need more money soon. And if the whole project does not work out, you can still blame it on the many unforeseeable problems and players. SpaceNation then could rename itself and start something totally different, with fresh funds from new investors. Cohu Experience did so, after their CarbonToSoil project failed.
But that’s a different story.
UPDATE 27.3.2018: SPACENATION CEO Kalle Vähä-Jaakkola told that “the app will launch in March, and the rest is history”. That’s 2 days on, if it’s not to happen on Christianity’s holiest weekend (which would be idiotic, to say the least.)
Look’s like an Olkiluoto app.
In addition to the private equity, the company has received 445.600 EUR (2016-2017) and 61.789 EUR (2014-2015) Business Finland. Interestingly the fact of public funding is not seen anywhere nor said in their latest video:
https://youtu.be/gFTjT2Em_a0?t=13m15s
It is worth noting that the credibility of the project also came from Peter Vesterbacka (Rovio). He has many interviews endorsing the project.
That’s right, and thx for the information.
I have to admit, that it reminds me of Theranos. That failed high-flyer had also big names on the board and as advisers (Henry Kissinger among others) which had nothing to do with the business. Just staffage.
Iron Sky Universe crowdfunding was also a scam.
In films you need something called “chain of title”. Documentary evidence of all copyright going back to original artists.
The problem is that the first film Iron Sky 2012 use crowdsourcing as well as professionals such as my self would worked without contracts from large parts of the production. This may have been ok to get one film out but for a whole franchise including sequels and video games, the producers would have needed to fix the “chain of title” as they cannot prove they have copyright ownership for such” future international” ventures.
More info on “chain of title here”
(https://rodriqueslaw.com/blog/successful-filmmakers-know-how-deliver-clean-chain-title)
So without a complete chain of title they would always fail to close deals with international distributors. Indeed NBC Universal pulled funding and distribution as did SF Studio for the Nordic region outside of Finland.
So obviously, the Producers knew from the beginning they didn’t have a complete chain of title and thus knew they were always unlikely to get any significant distribution….and that is actually what happened. (there is also a video of Timo Vuorensola claiming that films never actually make profits here, https://www.youtube.com/watch?v=nV0XB144XmE&t=1s)
Therefore, they knew when they set up “equity crowdfunding” for Iron Sky Universe (ISU) offering millions to share as profits to public investors that there were never going to be any actual profits to share. And that is what happened too. There are no Profits for ISU and Blind Spot Pictures (initial Iron Sky Producers) went bankrupt in Sept 2019. Recent news from Kauppalehti also suggest that ISU are near the end.
https://www.kauppalehti.fi/uutiset/iron-sky-kuunatsileffan-tuotantoyhtiolle-sataa-nyt-maksuhairioita-taitaa-olla-loppu-aika-lahella/ad3c3897-073b-4301-802a-dabb90df67c2
Additionally there was a court case which proved that The producers couldn’t demonstrate a clean chain of title. The producers claimed a victory in the media but in reality they only avoided being sued by the Animators. There was also a counterclaim by the producers to sue the animators which the producers lost…because the couldn’t prove any copyright ownership.
In reality the courts concluded that only one space ship from Iron Sky was copyrighted (the Jap ship). For all the rest of the work there was no conclusion. This meant that the courts did not review any contracts for the other artists in the case. So this alone breaks the chain of title as there was now no way to placate distributors. The game was up!
Thanks Denise,
attached is a confidential email that emerged in the Court trial. The courts said this has to be kept secret for five years so you probably should not publish it.
Never the less it proves the concerns that the distributors (SF Studios) had and that they were taking the issue seriously.
Ultimately the Courts did not resolve the issues of copyright ownership as the Producers lost their counter claim and could not demonstrate to the courts they held all copyrights. We know ourselves that they could never prove to the courts full copyright ownership because of the työharjiotus contracts and the fact that the courts did not review such contracts. The courts specifically avoided looking at the työharjiotus contracts which is very conspicuous. Ultimately it was also very damaging to the producers as it killed any possibility of proving to distributors that they had acquire all necessary copyrights from ALL artists.
The Jap Ship was the only example where a ‘single contract’ pertaining to a ‘single artist ‘ was reviewed by the courts. The issue of ‘lack of contracts’ from other applicants was not addressed.
“Paragraph 87 [Translated] It is therefore necessary to consider Claim 3 (transfer of rights) only in respect of A’s work” (Translated. Paragraph 87. MAO302/18)
“87. Edellä todetusti kannevaatimus 1 on hylättävä ja myös kannevaatimus 2 on hylättävä muutoin kuin siltä osin, että A:ta on pidettävä Japanin edustajien aluksen tekijänä. Näin ollen kannevaatimusta 3 on tarpeen arvioida vain A:n mainitun teoksen osalta.”
So for the rest of the 3D animation work there was no need for the courts to look at any contracts as there was no copyright existing to transfer which, was a conspicuously convenient way for the courts to avoid the “lack of contracts issues” concerning the other applicants as well as the issue of “illegal unpaid internships” (työharjoitus) for professionals! [Emphasis added]
So basically when the Producers claim to have ‘won’ the case. They didn’t really. They just avoided being sued for copyright infringement by the artists. They didn’t actually prove they owned the copyrights and the only work they proved they had rights for was the Japanese Ship. They could not prove they had rights for ANY of the other work as the courts didn’t examine the contracts for all the other work.
This breaks the Chain of Title and major distributors such as NBC Universal had no choice but to pull out of deals. SF Studios eventually cancelled deals for the Nordic region outside of Finland.
When looking at the financial statements of Iron Sky Universe there is evidence that investors money was actually being funneled into other companies including Blind Spot Pictures. Although the Finnish company is bankrupt…. it is not clear about Blind Spot Pictures in Zurich where Tero Kaukomaa has a home.