It aims to do for crowdfunding what Tinder did for modern courtship.

It aims to do for crowdfunding what Tinder did for modern courtship. 

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The makers of Tendr, a new app launching in the UK, hope the smartphone dating model can now be used to connect adventurous investors with great business stories.

Users of the app will be able to glimpse hundreds of campaigns currently running on Britain's biggest crowdfunding platforms, bookmarking their favourites to scrutinise later.

Tendr is launching in the UK at a time when investment-based crowdfunding has never been more popular. Crowdcube, one of the country's biggest crowdfunding platforms, recently announced that it has raised £1.5m for Scottish businesses since October 2014.

Brewdog, the Aberdeenshire-based brewery, also broke records when it reached its £25m fundraising target in April, while Andy Murray has become the latest celebrity to endorse crowdfunding after signing a deal with specialist platform Seedrs last month.

But amid the excitement is a note of caution from experts, who say it is becoming all too easy for younger and inexperienced investors to be dazzled by "sexy" businesses that do not live up to their billing.

Emma Vartolomei, chief executive officer of AllStreet, said young millennials have become a "significant demographic" in crowdfunding, but many are prioritising style over substance.

"The younger generation does not want to take expensive investment advice, so they are opting to do it all themselves by going into crowdfunding. But while the first wave of early adopters know a lot about this market and do their due diligence, there is another category who rely mostly on recommendations from friends and family."

She went on: "Young people who are not well educated about the risks of investing tend to pick ventures that are bringing out consumer products, like beer and chocolate, but these youth-friendly products are just a small segment of the market."

Ms Vartolomei said: "Investors may be ignoring complicated propositions that operate in a niche area, yet have a brilliant business case."

Alexander Selegenev, executive director of TMT Investments, agreed that younger investors don't always understand the risks involved. His $50m firm invests in many of the start-ups that crowdfunding platforms offer. He said: "There are some people out there who justify their lack of experience in this area by promoting the view of 'those who don't take risk, don't drink champagne', and support it with references to Facebook and other success stories, totally forgetting to mention thousands of less fortunate start-ups.

"If we don't want equity crowdfunding to turn into gambling, only professional, experienced investors should be involved."

Other experts, however, believe that the market should be open to all. Sacha Bright, founder of crowdfunding comparison site Business Agent, said: "So long as the rules are observed and the sums of money are sensible - you can invest in some projects for as little as £10 - I would like to see more young people involved because of the valuable experience and knowledge they gain about money and markets."

Mr Bright said there were numerous safeguards in place to prevent "any exploitation of gullible young investors". He pointed to rules set by the Financial Conduct Authority, requiring investors to "self-certify" on regulated platforms that they are over the age of 18 and that their investment represents no more than 10 per cent of their net worth.

That hasn't stopped the FCA from ringing alarm bells about the sector. It has previously claimed that some start-ups are being allowed to offer a "misleading or unrealistically optimistic impression" of potential growth and the security of investors' cash.

But Mr Selegenev said it would be almost impossible for the FCA to make valuations more accurate. "If the regulator asks the question 'should we allow investment in start-ups by less experienced investors?' and if the answer is yes, it effectively admits that some investors will invest at inflated valuation levels, but believes that the benefits to the market and society as a whole will outweigh any relevant losses."

Ms Vartolomei also warned that some platforms are moving in the opposite direction, allowing companies to be undervalued so they can reach their fundraising targets. "That way, the platform is paid, so investors need to be wary of a platform that offers lots of companies with low valuations."

There are additional fears that platforms are smothering investors with information in a bid to satisfy regulators, she added: "If a business plan is 40 or 50 pages long, who has the time or knowledge to understand what is behind that? What aspects do you choose to focus on? On top of all that, you're trying to find some universal benchmarks of quality, but they aren't there."

Mr Selegenev said: "Although crowdfunding platforms try to do their best to provide standardized information about their clients, the nature of start-up businesses makes certain key information either very difficult to obtain or quickly obsolete. Ultimately it puts the responsibility back onto individual investors, who need to read industry news, review hundreds of different pitches, analyse previous successes - and failures - so as to effectively become 'professional' in start-up investing."

One platform - Investingzone - now wants to fight back against "over-valued, over-hyped and over-rated" start-ups by only listing deals endorsed by corporate finance houses and private equity firms. Chief executive Jean Miller said: "This means that the quality of deals is higher, the risks to investors are likely to be lower, and the public can take confidence from the fact that they are investing alongside seasoned professionals."