Investors in adhesive wonder material Sugru are losing most of their money after the crowdfunded startup failed to scale. So what went wrong?
Crowdfunding a startup is a risky business. Last month FormFormForm Ltd (FFF) — the British firm behind a moldable material called Sugru — disappointed investors after it sold out to German adhesives specialists Tesa for a knock-down price of £7.6 million. That’s almost £25.4 million less than it told investors it was worth when they backed it on Crowdcube. That means the investors are losing 90 per cent of their money – and needless to say, they are pretty bummed.
“I’m very disappointed as the funding literature indicated high growth plans,” says a Crowdcube backer who wishes to remain anonymous. “The marketing material was clearly inadequate and did not highlight the risks and threats especially with the bank funding. Sugru should have advised us months ago.” This investor lost 91 per cent of his £500 investment. He says he would have invested more had it not been his first time investing on Crowdcube. Asked if he’d use the platform to back startups again, he shakes his head: “Most likely not”.