RideLink, an online community where car owners could safely rent their cars directly to drivers, attracted nearly 500 investors during its Seedrs equity crowdfunding campaign last June. Originally seeking £1 million, RideLink raised £1,101,263 during the funding round. Now, only a few months after the raise, RideLink has come to a screeching halt and announced its closing, and according to the Times, crowdfunding investors have now threatened legal action: London-based Seedrs is “investigating the fundraising amid anger from ordinary investors after the business decided to close its doors only three months after receiving funds.”In addition, The Times reported that this week a small group of investors were arranging a meeting to discuss a potential legal claim against RideLink’s directors and possibly Seedrs.
Why did RideLink’s progress come to a screeching halt? Funding from a large automotive company did not pan out, RideLink CEO Alexander Stevenson told The Times:
“Rather than going up against these guys, even though we had done well, these [investors] didn’t want to fund to the level required to compete. As soon as that was clear, that’s what was communicated to investors…I understand why [the investors] are upset and I empathise. I have sunk three years of my life into this and didn’t want it to go this way.”
Seedrs told The Times that the platform “continues to carry out an investigation into how all proceeds from the campaign were used and will work with RideLink to ensure any remaining assets are distributed to shareholders. We will keep Seedrs investors informed throughout the process.” In an earlier inquiry, Seedrs indicated to The Times that it had not seen “evidence of any misappropriation of funds, ”but would follow up on “some outstanding questions . . . before we report back to investors.”
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