Unfortunately, there have recently been a number of cases where investors have suffered losses from investing and lending via an Eastern European crowdfunding and crowdlending platform. How can you best protect yourself as an investor and choose the right platform?
Unfortunately, several of these platforms have turned out to be 'scams', where investors have been lured into investing in fake or non-existent projects and where, as a result, the platforms have not been able to repay the promised returns, but have instead gone bankrupt and the backers have fled with the investors' money.
Typically, these platforms have been offering (on paper) very high returns and the possibility to join for small amounts, which many investors seem to have been blinded by. Of course, there are also a number of real and sound platforms, but it is important to look carefully and not just go for the platforms that offer the highest returns. As experienced investors know, there is always a correlation between return and risk, and it is therefore worth investigating individual projects carefully before investing or lending to a given project.
At Fundbricks.com, we are of course annoyed if cheating or lack of skill of some Eastern European platforms creates a general bad mood or negativity towards crowdfunding or crowdlending platforms. Instead, we hope that investors will start to take a closer look at the individual platforms and the individual projects before investing, and at the same time we would encourage investors to turn their attention to Danish platforms, where the transparency is, all things being equal, much greater and more manageable for Danish investors. At the same time, investing and lending via Danish platforms can help keep the Danish economy going in a difficult time - I have written a little more about this in another article: https://lnkd.in/eAnrDsQ
Fundbricks.com is a 100% Danish-owned and self-developed crowdlending platform, which is targeted at financing solid Danish real estate development projects and with a main focus on residential properties, which we consider a more stable market than commercial properties (You can read more about us, our processes and how it all works in our FAQ).
The big difference, in our view, is that lending to real estate projects provides better security and gives you the opportunity to physically inspect the project you have lent to and monitor the progress of the construction work. This is obviously much more difficult in the case of non-transparent loans to Eastern European companies, which are not necessarily known and where it can be difficult to carry out your own investigations. Unfortunately, reality has also shown this....
The bottom line is that investors should always do their own research and consider whether the high returns on paper are likely. Return and risk are linked - in the investment world, the expression "there are no free lunches" is often used, i.e. you don't get something for nothing without a catch.
Ultimately, as an investor, you have to decide for yourself whether you want to go for "what sparkles", i.e. the very high returns on paper, or whether you want to invest in something more tangible and transparent and with greater security for your investment and where you can at the same time help keep the Danish economy going - it is a matter of preference - at Fundbricks.com we know what we would choose ....
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Historical returns are no guarantee of future returns. The money you lend to projects can therefore increase or decrease in value and there is no guarantee that you will get back the full amount lent.
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