Let's consider a more optimized scenario, because $99 a month is too much, and $3000 LL with a $6000 PT is not optimum at all.

Consider instead a $50k evaluation account with a $2500 loss limit and a $3000 profit goal. As you mentioned, this is really a $2500 account, with a $3000 profit goal. Let's imagine you can get this configuration for $33 per month, because you can.

IMO, the only issue here is time.

Consider a strategy with only a 40% win rate, 2:1 R/R, and a whopping 4% risk per trade. If we call 90% drawdown "blown", then the risk of ruin calculation, even accounting for a trailing drawdown, is about 0.1% (simulating with 1000 trades). So, your risk of blowing up is miniscule. The question is, can you really get paid 2:1 and do so 40% of the time?

How long will it take you reach the $3000 profit goal? Well, that's a function of the frequency of trade opportunities. Imagine your system has a more conservative profit factor of 1.6 and you win 50% of the time. If you risk 3% per trade ($75), your average win is $120, so your expected value on any given trade you take is $22.50 ($120 * 0.5 - $75 * 0.5). If you get 2 trade opportunities per day on average, then you can expect to make $3000 in 67 trading days, which is just over 3 months. The cost would be $133. These are not some crazy, unachievable goals.

Let's imagine instead that you blow several of these accounts, say, 50 of them, costing you $2000. Well, you would have lost that money more quickly had you opened a $2000 account, almost certainly.

Does their model encourage gambling behavior? I would say so, yes. But so does trading, period. It's a world of gamblers. People blow up every day. Success is rare. At least with funding companies, people can do what is effectively simulated trading, with what's quite a small fee relative to actual trading capital they'd have to put up otherwise, with an actual opportunity to get paid for it, compared with free simulated trading which has even less accountability. There is no real support, no accountability, and yes, you are free to blow as many sim accounts as you want. But you're also free to run down to the bank and wire another $5K in every time you blow up a real account. At some point, one's own personal responsibility must kick in. No one will stop you from your own behavior.

I was once very negative about funding companies but I've changed my tune. I see them as a win-win for everyone. Traders who can do well can get paid. Traders who don't will lose less than they would have in the market. The firm gets free order flow and can use that information to make real money for themselves.

The only real downside I see is the counterparty risk, which was my main issue previously. Your counterparty in a live trade is CME. Some people think it's the trader on the other side of your trade, but it's not. CME assumes counterparty risk and guarantees it with margin. So, when live trading, your counterparty risk is zero. You WILL get paid. With a funding company, they are your counterparty, and your risk is that they won't pay you. This to me is the only real risk here.

Iit also is a really super dumb way for a successful trader to throw away money to trade through a prop shop.

That makes sense. Hard to see why a successful trader with funds available would want to use one anyway, and lose a share of their profits. They are targeting people without enough funds available who think (often wrongly and too optimistically) that they have the skills required to pass?

passed doesn't mean withdrawal of profits

Could still be a valid firm

Great question @Big Mike

I don't participate in funded trader platforms so maybe my vote doesn't count. But the reason I would never participate is "Unrealistic rules and requirements". They are all trying to force you to trade the way they want you to trade. They automatically eliminate so many styles of trading.

edit: It's designed around 'their risk management ideals' and not 'best trading ideals'