Charity Sites Fires Promoters

Where there’s opportunity, you will usually find cheats.

Venture capital backed Chinese charity crowdfunding platform Shuidichou uses “off-line promoters” to find people to raise money on its site.

shidichou

According to PitchBook, the company has raised ~$74 million in venture capital from nine investors through its Series B.

Just recently, it’s reported that Shuidichou has banned these promoters who visit hospitals to find patients to put on the site seeking donations for medical expenses.

The ban is apparently due to the promoters telling the patients to ask for more money than necessary to cover their bills and that the site won’t vet their campaigns, contrary to its terms of service.

The promoters work on a commission basis of $14/new sign up and a bonus of $70 for every 25 new campaigns.

As we saw from our own mortgage crisis, this type of comp often leads to cheating.

This is not the first time the company has found itself subject to criticism.

http://www.sixthtone.com/ht_news/1004910/crowdfunding-site-suspends-offline-promoters-over-sketchy-recruiting

About JeffKoeppel

I am a corporate/securities attorney in the Washington, DC area. Prior to joining the firm, I was a Senior Attorney Advisor in the Division of Corporation Finance at the U.S. Securities and Exchange Commission. I am a member of the Bars of the States of Maryland, New York and the District of Columbia. You can also follow this blog on LinkedIn at: http://www.linkedin.com/pub/jeffrey-a-koeppel/0/63/5a9
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