Rebus, a claims management company, raised £816,790 via the platform in March 2015, however it had administrators appointed in January this year.

According to Crowdcube’s website, Rebus had two meetings with ReSolve, a corporate finance advisory firm unrelated to Crowdcube in May 2014, to discuss potential funding options which the crowdfunder was not aware of.

“It is normal for businesses to explore different funding options in their early stages, so Crowdcube would not have been surprised or alarmed by the ReSolve meetings,” said Crowdcube.

“As many entrepreneurs and investors will appreciate, raising finance is difficult and not every conversation with an adviser or investor will result in an investment.

“Disclosing details of previous fundraising attempts is not standard practice even in traditional fundraising.”

Crowdcube also said investments on its platform were not risk free and encouraged entrepreneurs to make as much information available to investors as possible.

It said this was the case for Rebus, and hit back at media claims that the Crowdcube pitch for Rebus was used to cover up cash flow problems.

“This is simply not the case,” added the crowdfunder.

“Verified financial information about Rebus was provided on the pitch, including cash flow and financial statements, as well as an additional warning that made clear that the company’s business model meant that it had variable cash flow.

“Our aim is to provide potential investors with a fair an accurate representation of the business and its financial position and we are satisfied that this was done properly in this case. 

“Crowdcube has a team of legal and compliance professionals dedicated to this and ensuring that all pitches on the platform are fair, clear and not misleading.”

The crowdfunder concluded by reminding investors that it was authorised and regulated by the FCA and approved every pitch on the site as a financial promotion before it was published.

“As part of that process we review and verify evidence supporting any claims being made by the business, such as market size, contracts and partnerships, to ensure the information provided is accurate,” said Crowdcube.

“We also conduct due diligence on the company, its legal structure, financials and directors.

“It is worth noting that as a result of our stringent due diligence processes, around 90% of the businesses that apply to Crowdcube don’t pass our vetting and therefore don’t make it onto Crowdcube.”