Last week I was interviewed for an appearance on BBC Radio 4 Money Box, talking about crowdfunding.
Returning to the office after a few days off during half term, one of the first phone calls I received on Thursday morning was from a journalist preparing a feature for Money Box all about crowdfunding.
She had spotted my recent comments in the Telegraph newspaper, where I explained investors in crowdfunding schemes can sometimes be left disappointed should the project change direction.
After a brief discussion, I was invited to be interviewed from a contribution studio later that afternoon.
The nearest BBC contribution studio to our office in Cranleigh is at the University of Surrey, in the offices of BBC Surrey. It’s a small room with a desk, microphone, headphones and mixing desk which appears to be have installed in the 1960s.
I’ve used this contribution studio on a couple of occasions before, so knew what to expect.
Arriving early for our agreed interview time, I had a few minutes in the car to review my notes before connecting to the journalist at Broadcasting House in London and starting the conversation.
Some of what I had to say about the regulation of crowdfunding was included in the most recent episode of Money Box, broadcast on Saturday lunchtime and then repeated on BBC Radio 4 on Sunday evening.
You can listen again at bbc.co.uk/programmes/b0532b2s; the feature on crowdfunding which includes my contribution is found starting at 10 minutes 40 seconds, so you can skip ahead to that segment if you’re rushed for time.
I explained on the show that retail investors are not allowed to invest more than 10% in crowdfunding, or alternatively need to be a self-certified sophisticated or high net worth investor. I expressed concerns that any form of self-certification can be a little too easy to bypass, if investors are determined to get involved.
Pivoting is another area I covered; this is where the person or business using crowdfunding raises money and then allocates it to a different project to the one originally promoted.
I believe that crowdfunding is a new, innovative and very exciting investment model. It is also incredibly risky.
With no protection from the Financial Services Compensation Scheme (FSCS), and usually no recourse to the Financial Ombudsman Service (FOS) in the event of things going wrong, crowdfunding is probably not a good idea for most retail investors.
