Risks relating to Crowdfunding
Main risks of investing in unlisted companies:
Risk of total or partial loss of invested capital
Investing in shares of unlisted companies is risky. The shares subscribed for may lose value up to the total loss of your initially invested capital. Before investing your funds, make sure you have sufficient resources to bear the risk of capital loss. You should only invest money that you will not need to use up quickly.
Lack of liquidity
Equity crowdfunding has even less liquidity as there is no secondary market for shares in SMEs and start-ups due to the inability to accurately judge the value of the equity shares.
We will have in place proper shareholder agreements to ensure exit and exit value terms are respected. The transfer of shares between investors may not be possible and no liquidity is provided by Olive Crowd. You must make sure that you can immobilise the amounts invested over a long-term horizon, without any guarantee of delay.
Risk of capital dilution
It is possible that when you raise new funds subsequent to your investment, your investment may be diluted by the issue of new shares and consequently the percentage shareholding may be reduced unless you subscribe to new funds.
The basic rules for investment in start-ups and SMEs
- Never invest more than 5 to 10% of your assets in unlisted start-ups and SMEs.
- Never invest money that you might need in the short or medium term.
- Diversify your investments by investing in different companies, in different sectors, at different stages of maturity.
- Preferably invest in companies whose sector, business model and terms and conditions you understand.
- Prior to any subscription of financial securities, we invite you to read all the information about the transaction and the company provided by Olive Crowd.
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