Celebrity business leaders using their name to crowd funding websites
The outspoken private equity guru Jon Moulton claims today that the celebrity business leaders may be using crowd funding websites to exploit retail investors.
He points out the example of easyJet founder Sir Stelios Haji-Ioannou, as a name using his position to foist over-priced shares on to small investors in his new easyProperty estate agency.
“Investors in crowd funding equities like stories and personalities. Celebrity types have spotted this demand and, as is normal, in markets are testing the limits of exploitation,” the Better Capital boss writes.
“Sir Stelios has offered 1.5 per cent ownership in the new company for a substantial £1m. The business is not trading so he’s valuing it at £67m, which you must assume he thinks is a great deal for him as he clearly does not need the money.”
Typically, he said, private equity investors buying shares at this stage in a new company’s life might expect a large holding for £1m.
However, financiers working on the fundraising round disagreed with Moulton’s assessment. “Overall we are raising £7.5m, and £6.5m of this comes through our normal network of professional and high-net worth investors. It is with them that we came to this valuation,” said Kingsley Wilson from Chrystal Capital.
“The aim is to target landlords and tenants, so they can invest in a platform that we think they are going to use in their droves.”
Source: cityam- celebrity business leaders using their name to crowd funding websites
