An Irish firm’s crowdfunding round has been pulled after the funding platform said the campaign broke its rules.
Dublin-headquartered online education provider Shaw Academy has denied any suggestions of impropriety in the fundraising which had easily topped its initial €2.2 million target and had subsequently been extended.
Crowdcube, one of the UK's largest crowdfunding platform, which has been used successfully by many Irish start-ups, said Shaw Academy had not adhered to its investment programme, despite numerous requests.
"As a platform regulated by the Financial Conduct Authority, we were unable to close the fundraise while ensuring accuracy and fairness for all investors," Crowdcube said in an email sent to backers of the funding round.
Crowdcube said that, contrary to its advice, it had identified communications by Shaw Academy to prospective investors that were not approved by it as “being fair, clear and not misleading”.
Risk to investors
It added that such communications potentially posed a risk to investors, leading the platform to cancel the campaign and warn the investment was no longer approved by it and therefore did not have the same protection as when investing via a regulated platform.
The company has denied any suggestions of impropriety.
"We refute any wrongdoing at all on our part and feel that the process was lacking in support and guidance throughout," co-founder and chief executive James Egan told The Irish Times.
Shaw Academy, which was established by Mr Egan and Adrian Murphy five years ago, initiated the campaign in early October and secured €2.5 million. It extended it by a further four weeks at the end of that month, due to what it described as "heavy demand" from investors.
‘Non-existent’ support
“Over the last number of weeks, the process had become incredibly frustrating with almost all the funds invested coming from our own audience [which was] quite the opposite to what our expectations were. In addition, the support and guidance for this matter was totally non-existent,” said Mr Egan.
“As frustrations developed throughout the campaign, we looked at cancelling it on a number of occasions,” he added.
Shaw Academy, which has an elearning centre at East Point Business Park and employs 180 people in Dublin and Bangalore, provides live online courses in areas such as IT, business and marketing. It says it has taught more than four million students worldwide.
“We’ve got huge demand that was not met through this process and indeed has yet to be met and we’re looking at all the available options and considering what we wish to do next,” said Mr Egan. “Our priorities lie with our students and it is those guys who we must put first and foremost.”
