High Court finds fraud in start-up fundraising – key lessons for venture investors and founders

The Commercial Court has found that a founder’s exaggerated claims about “imminent” blue-chip investment amounted to fraudulent misrepresentation.

In Candy Ventures SARL v Aaqua BV & Robert Bonnier [2025] EWHC 2877 (Comm), the English High Court awarded £4.6 million in damages to Candy Ventures (CVS) after finding that Aaqua’s founder knowingly misled investors about a proposed investment from Apple and LVMH.

Background

Aaqua was an early-stage social-media venture founded by Robert Bonnier in 2020. CVS invested €7.5 million in Aaqua (largely through a share swap relating to CVS's investment in Audioboom, a podcast marketing and analytics business) on the strength of repeated assurances that Apple and LVMH were poised to invest nearly €1 billion in the company. No such discussions with Apple and LVMH had ever taken place. Despite this, Aaqua’s fundraising decks and correspondence positioned Apple and LVMH as "founding partners".

When the investments from Apple and LVMH failed to materialise, Aaqua collapsed into insolvency. CVS sued both Aaqua and Mr Bonnier for deceit.

The judgment

The Court found that:

• Three misrepresentations were made: that Apple and LVMH were in advanced negotiations, that binding conditions precedent had been agreed, and that the founder honestly believed investment was imminent.
• All three were false, and known to be false: The Court noted the complete absence of any documentary trail with Apple or LVMH, and accepted that Bonnier had “lied repeatedly and determinedly” to secure CVS’s investment.
• Fraud unravels all: contractual disclaimers and “entire agreement” clauses did not exclude the defendant's liability for fraud.
• Damages were assessed at £4.62 million: being the value difference between the Audioboom shares CVS exchanged and the much lower value of the Aaqua shares it received.

Why it matters for venture investors, and founders seeking investment

This decision underscores that fraud cuts through legal disclaimers and limitations on liability. A non-reliance or “entire agreement” clause is typically included in investment documents; however, both investors and founders should think carefully about the implications. No matter how widely drafted an entire agreement clause is, it cannot exclude liability for deliberate dishonesty. However, in cases which fall short of fraud, an entire agreement clause could result in investors not being able to rely on representations made by founders as part of due diligence if they are not also set out in the investment documents. Venture investors should carefully consider whether they have an appropriate set of warranties to support any of the founder's claims that are key to their rationale for investing.

The case also highlights the need for investors to engage their professional scepticism in the early-stage funding process:

• Evidence beats enthusiasm: require direct verification of third-party partnerships and capital commitments.
• Data rooms must contain substance: CVS asked to see the alleged Apple and LVMH investment documents –– but CVS went ahead with the investment even when these were not forthcoming.
• Due diligence discipline: even in fast-moving venture deals, keeping accurate records, such as contemporaneous written confirmations (heads of terms, emails, notes of meetings), is vital.

For founders, the case is a reminder that optimism in the business's potential must not cross into misrepresentation. Courts will scrutinise the objective reality behind pitch-deck claims, not the vision.

• Beware of “halo effect” fundraising: namedropping major brands to inflate valuation can amount to deceit if not genuine.
• Founder accountability: personal liability will attach where founders knowingly make false statements about a company