SleepDrops is fundraising

November 4, 2018

Categories: Skepticism , Tags: Pseudoscience, Homeopathy, SleepDrops

SleepDrops is a New Zealand company which sells small vials of liquid drops which are supposed to help you get to sleep and stay asleep. Their ingredients are a mixture of small doses of herbs and very small (homeopathic) doses of herbs. A look at the Scientific Research page on their website shows that there’s a dearth of research for any of the ingredients in the SleepDrops products, and absolutely no research on the SleepDrops formulation.

Despite this lack of both evidence and plausibility for SleepDrops, the products seem to sell well and their advertising is carefully crafted to avoid saying anything that might get them in trouble - like saying outright that their product actually works.

On the back of this popularity, and the winning of several business awards (and it’s a pity that for so many awards that are given out there is no check to see if the products or services being sold actually work - if the business model involves making a healthy profit, that is usually enough to be eligible for an award), SleepDrops are currently crowdfunding (opens new window) - on the 1st of November they launched a one month long fundraising campaign on Pledge Me. Like their website, the investment documents contain numerous typos, but I’m guessing that this lack of attention to detail isn’t going to put people off.

Their hope is to raise between $0.5 and $2 million. With a minimum investment of $500 worth of $1 shares. By the end of the first day, they had raised $588,000, and the total currently sits at $689,000. It’s worrying that the company is going to use this money to expand into overseas markets - it’s bad enough that Kiwis are being sold a product that doesn’t work, but it’s embarrassing for New Zealand that we’re now going to be exporting it as well. They’re also hoping to create herbal drops to treat ADHD and autism - and I’m pretty sure there’s no evidence that their products can help with these medical issues either.

The Equity Crowdfunding warning at the bottom of the Pledge Me page is worth heeding:

Equity crowdfunding is risky.

Issuers using this facility include new or rapidly growing ventures. Investment in these types of business is very speculative and carries high risks.

You may lose your entire investment, and must be in a position to bear this risk without undue hardship.

New Zealand law normally requires people who offer financial products to give information to investors before they invest. This requires those offering financial products to have disclosed information that is important for investors to make an informed decision.

The usual rules do not apply to offers by issuers using this facility. As a result, you may not be given all the information usually required. You will also have fewer other legal protections for this investment.

Ask questions, read all information given carefully, and seek independent financial advice before committing yourself.