Crowdfunding platforms are designed to make investing feel easy. Clean interface, a progress bar filling up, a countdown, one button. The friction has been engineered out — which is efficient, and which is also the problem, because friction is where thinking happens.
Here are seven questions worth asking before you click. None takes long. Together they catch most of what goes wrong.
1. Who exactly is licensed, and can I see the number?
Not “are you regulated” — the answer is always yes. Ask which legal entity holds the authorisation, which regulator granted it, and what the registration number is.
A licensed platform answers in one line. Anything vaguer than that is the answer. Here is how to verify it yourself in about two minutes.
2. What am I actually buying — equity, debt, or a promise?
These are fundamentally different things, and the marketing rarely distinguishes them:
- Equity — you own a share. You get upside, you carry losses, there is no fixed return.
- Debt or a loan — you are a lender. A fixed rate, a repayment date, and a claim ranking ahead of equity holders.
- A profit-sharing or revenue-sharing right — a contract, not ownership. Read what happens if the company is sold or wound up.
Ask specifically: if this project fails, where do I stand in the queue? Equity holders are last. That is not a flaw — it is the price of the upside — but you should know it before, not after.
3. Where does my money sit between now and the project starting?
The answer should involve the words escrow O segregated account, and it should be specific about what conditions release the funds.
If money goes straight into the company’s operating account, you are funding whatever they choose to spend it on, not the project you read about.
4. What does it cost me, in total?
Platform fees appear in several places and rarely add up on one screen. Ask about:
- An entry or subscription fee taken from your investment
- An annual management or administration fee
- A carry or success fee on returns
- Exit or transfer fees if you ever sell
- Currency conversion, if the project is not in your currency
A 2% entry fee and a 20% carry is a very different investment from the headline return. Get the total.
5. How do I get out — and be honest with me
Most crowdfunding investments are illiquid. There is no exchange, no daily price, often no buyer at all.
Platforms may run a bulletin board where investors advertise interest. That is not a market: no market maker, no guaranteed counterparty, no guaranteed price. Under EU rules it explicitly cannot function as a trading venue.
The right assumption is that you are in for the full term. If a platform’s answer to this question sounds reassuring, read it twice.
6. What happens if the project misses its target — or fails outright?
Two separate scenarios, two separate answers:
The round does not fill. Is your money returned? In full? How quickly? Governed by what — escrow terms, platform terms, or goodwill?
The project fails after funding. Who tells you, and when? Is there a recovery process? What is the platform’s role once the money has moved — active administrator or just the place where it happened? Frequently the latter.
7. What is the platform’s own interest in this deal?
Ask directly. Does the platform hold equity in the project owner? Does its fee depend on the round closing rather than on the project succeeding? Are any of its own shareholders involved?
EU rules require conflicts to be disclosed and restrict platforms from listing their own shareholders as project owners. Disclosure is not the same as absence, though — read what is disclosed rather than assuming there is nothing.
Two Things That Are Not Questions
Use the reflection period. Non-sophisticated investors in the EU get four days to withdraw a commitment, no reason required. It exists precisely to defeat the countdown timer. Use it every time, even when you are sure.
Read the KIIS before the pitch page. IL Scheda informativa chiave sull'investimento is a prescribed format covering risks, rights and fees. It is duller than the pitch, and that is the point — it is the document written to inform you rather than to move you.
The Underlying Principle
Every one of these questions has a short, checkable answer if the platform and project are what they claim. The signal is not the content of the answer so much as whether a clear answer exists at all.
A project that cannot say where the money sits, what you own, and what it costs is not a project you know enough about — regardless of how good the returns look.
And a licensed platform is the floor, not the recommendation. It means the process is supervised. Whether the specific project deserves your money is still entirely your call — see what the regulation does and does not cover.
This page is general information, not legal or investment advice, and not a recommendation of any platform or project. Published by Solar Plus Garden, which plans to raise investment through an authorised EU crowdfunding platform and therefore has an interest in this subject. Apply these questions to us as readily as to anyone else.
