Investing in early-stage businesses like ours can be very rewarding, but it involves a number of risks and challenges. While we predict that you will achieve a capital gain, we will provide a baseline of liquidity for your shares, we will pay out dividends, we provide anti dilution & fit well in both a diversified and non diversified portfolio. If you choose to invest in any private business, you need to be aware of and accept five important considerations:
1. Loss of Capital
Most early-stage businesses and many other businesses fail, and if you invest it is significantly more likely that you will lose all of your invested capital than you will see any return of capital or a profit. You should not invest more than you can afford to lose.
Almost all investments you make in businesses displayed on the platform will be highly illiquid. It is very unlikely that there will be a secondary market for the shares of the business. This means that you are unlikely to be able to sell your shares until and unless the business floats on a stock exchange or is bought by another company; and, even if the business is bought by another company or floats, your investment may continue to be illiquid. Even for a successful business, a flotation or purchase is unlikely to occur for a number of years from the time you make your investment.
3. Rarity of Dividends
Early stage businesses rarely pay dividends. This means that if you invest in a business through the platform, even if it is successful you are unlikely to see any return of capital or profit until you are able to sell your shares. Even for a successful business, this is unlikely to occur for a number of years from the time you make your investment.
Any investment you make in a business displayed on the platform is likely to be subject to dilution. This means that if the business raises additional capital at a later date, it will issue new shares to the new investors, and the percentage of the business that you own will decline. Your investment may also be subject to dilution as a result of the grant of options (or similar rights to acquire shares) to employees of, service providers to or certain other contacts of, the business.
If you choose to invest in businesses, such investments should only be made as part of a well-diversified portfolio. We build highly volatile assets which can bring both extremely high returns and large losses to our book value and your shareholders value.