Last revised on Jan 21, 2024
This risk policy (“Policy”) forms an integral part of the Terms of Use and governs the use of Platform. Accordingly, the Policy sets out mandatory standards of conduct that are expected from users of the Platform (“Users” or “You” or “Your”) and discloses, without limitation, specific measures implemented to ensure the aforesaid standards on the Platform.
The words used in capitalized terms which are not defined in this Policy are defined under Terms of Use of the Platform.
Investing money in unlisted companies (particularly start-ups and early-stage businesses) can be very rewarding, however, it also involves a number of risks.
The purpose of this risk warning is to ensure that You, as a potential investor, understand the risks involved. If you choose to invest through this Platform, there are the following important considerations you need to understand and accept (The foregoing risks do not purport to be a complete explanation of all the risks involved in securities in a startup. Each User is urged to seek their own independent legal and tax advice and read the relevant investment documents before deciding to invest in a start-up through Platform):
1. LOSS OF CAPITAL
Start-ups, early stage and later stage may fail, and if You invest in a business through Platform, you accept that if a business fails You will lose all of Your investment. You should not invest more money through the Platform than You can afford to lose without having to alter Your standard of living.
2. LIQUIDITY
The investment opportunities on the Platform are private unlisted companies and will be of limited liquidity. Investors in unlisted companies may normally expect to sell/realise their investment when and if the company floats on a publicly listed stock exchange, or is bought by another company, which often takes a number of years from the initial investment.
3. DIVIDENDS
Unlisted companies, particularly start-up and early-stage businesses, rarely pay dividends. If they do pay dividends then the level will depend on the success of the investee company which may take some years to achieve, if at all. Companies have no obligation to pay shareholders dividends and generally, investee companies will reinvest profits to grow and build shareholder value. This means that if You invest in an unlisted company 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 in the investee company. Even for a successful company, this is unlikely to occur for a number of years from the time You make Your investment.
4. DILUTION
Any investment You make through the Platform may be subject to dilution. This means that if the company raises additional equity funding in the future, it will issue new shares to new investors and the percentage of the business You own will decline. Any new shares may also allow for certain preferential rights to dividends, sale proceeds and other matters. If such rights are exercised by new investors this may work to Your disadvantage. If the investee company grants options (or similar rights to acquire shares) to connected employees, service providers or certain other parties/individuals then Your investment may be diluted as a result. You recognize that this may limit Your voting power. Your voting power may be otherwise limited as mentioned in the offering itself and any other agreements You execute.
5. DIVERSIFICATION
Investing in unlisted companies should be done as part of a diversified investment portfolio. Not every type of investment will be appropriate for every investor. To spread and therefore alleviate risk You should invest smaller amounts in multiple businesses. Investing in unlisted companies, particularly start-ups and early stage, is a high risk/high reward investment strategy and You should invest the majority of Your investment funds in safer, more liquid assets.
6. MANAGEMENT AND CUSTOMER ISSUES
The company's management may be inexperienced and investors will not be able to evaluate the company's operating history. Small businesses may also depend heavily upon a single customer, supplier, or employee whose departure would seriously damage the company's profitability. The demand for the company's product may be seasonal or be impacted by the overall economy, or the company could face other risks that are specific to its industry or type of business. The company may also have a hard time competing against larger companies that can negotiate for better prices from suppliers, produce goods and services on a large scale more economically, or take advantage of bigger marketing budgets. Furthermore, a small business could face risks from lawsuits, governmental regulations, and other potential impediments to growth.
7. TAXATION
The structure of any investment in a startup may not be tax efficient for any particular investor, and no startup guarantees that any particular tax result will be achieved. In addition, tax reporting requirements may be imposed on investors under the laws of the jurisdictions in which investors are liable for taxation. Investors should consult their own professional advisors with respect to the tax consequences to them of an investment in a startup under the laws of the jurisdictions in which the investors and/or the startup are liable for taxation.
8. RISK POLICY DISCLAIMERS
1.
The information provided on the Platform is for sophisticated and professional investors only. Neither Company nor the asset holding entity is a broker-dealer or an investment advisor or their equivalent.
2.
You should speak with your financial advisor, accountant, and/or attorney when evaluating any offering of interests, securities, assets or fractional ownership. Neither Company nor asset holding entities makes any recommendations or provides advice about investments, and no communication, through this Platform or in any other medium, should be construed as a recommendation for any security, or assets offered on or off this Platform. Nothing in this material should be construed as investment or tax advice, or a solicitation or offer, or a recommendation to buy or sell any securities or assets. The Platform may make forward-looking statements. These forward-looking statements include, but are not limited to, statements concerning the company, property, risk factors, plans, and projections. You should not rely on these statements but should carefully evaluate the offering materials in assessing any investment opportunity.
3.
Any securities on this Platform have not been recommended or approved by any regulatory authority. Furthermore, the Securities and Exchange Board of India (“SEBI”) does not pass upon the merits of any securities offered or the terms of the offering, nor does it pass upon the accuracy or completeness of any offering document or literature. Any securities on this Platform are offered under an exemption from registration; however, these security deals are executed through private placement rules.
4.
Neither Company nor security holding entities, nor any other person or entity assumes responsibility for the accuracy and completeness of forward-looking statements. Investments displayed on the Platform are not bank deposits, are not insured, and are not guaranteed by Company, and may lose value.
5.
Company expressly disclaims all kinds of warranties or guarantees expressed or implied related to the good return of the investment on Platform.
6.
Company does not warrant that the Services or functions made available on the Platform will be error-free or uninterrupted. Company does not warrant that the Platform is free from computer viruses or other harmful materials. Company does not make any representations or assurances regarding the completeness, accuracy, adequacy, veracity or reliability of the materials used on the Platform. Users may only use the Services and content on or provided by Company at their own risk.
7.
None of the information on this Platform takes into account any person’s personal objectives, financial situation, or needs and You must determine whether the information is appropriate in terms of Your particular circumstances.
8.
The distribution of information on the Platform may be restricted by local law or regulation in certain locations. This information is not intended for access or use by, any person or entity in any location other than the specific location chosen and persons accessing these pages should inform themselves about and observe any restrictions which apply in the location in which they are located.
9.
FOR THE AVOIDANCE OF DOUBT, IN LIGHT OF YOUR ACKNOWLEDGMENT OF THIS POLICY, YOU AGREE AND ACKNOWLEDGE THAT YOU SHALL HOLD THE COMPANY HARMLESS AND SHALL NOT RAISE ANY CLAIM IN RESPECT OF ANY OF THE ABOVE.
10.
NOTHING CONTAINED ON THE PLATFORM SHOULD BE CONSTRUED AS AN AUTHORIZATION BY THE SEBI TO SOLICIT INVESTMENTS NOR SHOULD THE PLATFORMS BE CONSTRUED AS A SEBI AUTHORIZED CROWDFUNDING PLATFORM OR A STOCK EXCHANGE, OR THEIR EQUIVALENT. THE PLATFORM IS USED BY US TO PROVIDE SERVICES TO OUR REGISTERED USERS, AND WE DO NOT SEEK TO SOLICIT INVESTMENTS FROM THE PUBLIC AT LARGE.
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