All forms of investments carry a degree of risk, particularly those involving start-up companies. Before investing in any companies through our platform, the following should be considered:
1. LOSS OF CAPITAL
Most start-up companies fail. This means that if you invest in any company through our platform, it is more likely that you will lose all of your investment than it is that you will see a return of capital or a profit. You should not invest amounts that you can afford to lose without altering your standard of living.
Any investment that you make through our platform will be highly illiquid. This means that it may be difficult to transfer or convert shares in investee companies into cash or otherwise.
3. RARITY OF DIVIDENDS
Start-up companies rarely pay dividends. This means that if you invest in a company through our platform, you are unlikely to see any return of capital or profit until you are able to sell your shares in the investee company. This is unlikely to occur for a considerable period of time from when you make your investment, if at all.
The shares, subject to an investment that you make through our platform, are likely to be subject to dilution. This means that if the investee company raises additional capital in a later investment round, it will issue new shares to new investors, and the percentage of the company that you own will reduce. These new shares may also have preferential rights over the class of shares that you hold, for example in respect to pay outs of profits or on a winding up of the company. Dilution may also arise, for example, as a result of the grant of options to employees or other parties engaged by the company.
Investing in start-up companies should only be done as part of a diversified portfolio. This means that you should invest smaller amounts in a larger number of companies rather than larger amounts in a smaller number of companies. Investing in start-up companies should be seen as relatively risky with the majority of your portfolio invested in relatively safer, more liquid assets.
6. TAX TREATMENT
Tax reliefs are not guaranteed and depend on an investee company maintaining its qualifying status, which may also be withdrawn at any time by the Revenue Commissioner, or other such authority.
7. PAST PERFORMANCE, FORWARD LOOKING STATEMENTS AND FORECASTS
Past performance, forward looking statements and forecasts are not a reliable indicator of future results.