There are two types of investing available to investors on the Symbid platform. An investor may provide business financing through either a convertible loan or an equity investment. These both entail various risks.
Symbid makes an effort for a transparent crowdfunding market. To do so we have made uniform agreements with branchevereniging Nederland Crowdfunding to provide an transparent insight into the successfully closed financings through our platform. Please find below the results. Please be aware the crowdfunding market is a relatively new industry which is in full development. The results of the past are not offering any security for the future.
Reporting companies financed with equity
Symbid has realized the first successful equity funding on December 6, 2011. As of January 31, 2017 we can provide the following information with respect to bankruptcies of the companies financed by equity through Symbid:
|Total amount financed with equity:||€14,474,980|
|Total number of companies financed with equity:||120|
|Total number of companies bankrupt:||12|
|Percentage of companies bankrupt of total:||10.00%|
|Accumulative Euro amount of bankruptcies:||€1,540,320|
|Percentage bankrupt over total companies:||10.64%|
|Total number of companies in surseance:||0|
|Percentage in surseance of total companies:||0%|
Reporting companies financed with convertible loan
As of January 31, 2017 we had 2 companies financed with convertible loans through the Symbid platform for a total amount of €636,980.
Reporting companies financed with loan
As of January 31, 2017 there was one company with a loan of €75,000 which was successfully financed through the Symbid platform in July 2015. As of January 31, 2017 this loan was not in default or had any late payments.
Risks while iInvesting in equity
Loss of invested capital
Most start-ups fail, and so when investing in the equity of a start-up it is significantly more likely that you will lose your invested capital rather than earn it back or make a profit. Therefore it is recommended that you do not invest more than you can afford without having to lower your standard of living. We strongly discourage you to invest with borrowed money.
Illiquidity of equity investments
Equity investments on our platform should be regarded as highly illiquid. There is no market for selling the shares of a private business. This means that it is unlikely you will be able to sell your shares until the business is sold or enters the public market. Even if you invest in a business that is eventually successful, it is very unlikely that a sale or IPO will take place within a few years of your investment.
Rarity of dividends
Start-ups rarely pay dividends. This means that it is unlikely you will earn back your invested capital through a dividend or other form of capital distribution regardless of the business’ success. Any profits are likely to be made through selling your shares in the business. Even if you invest in a business that is eventually successful, it is very unlikely that you will be able to make a significant profit by selling your shares within a few years of your investment.
Every equity investment made through our platform may be diluted. This means that if the business receives further investment at some point in the future it will sell additional shares to its new investors. If this occurs, the percentage of shares you own in the business will decrease. Furthermore, the newly issued shares would most likely have a greater right to dividends or include other entitlements which might work in your disadvantage. Your investment may also be diluted by the issue of share options to employees, suppliers or other parties associated with the with the business.
Risks while investing through convertible loans
Loss of capital
Investing in the SME domain is bearing risks, in practice there is a risk you will not be returned your initial investment at all. Therefor it is recommended that you do not invest more than you can afford without having to lower your standard of living. We strongly discourage you to invest with borrowed money.
Investing in startups and SME’s should be part of a diversified portfolio strategy. Which means an investor should invest small amounts in several companies instead of one large amount in one company. This does also imply you should only allocate a relatively small amount of your personal assets in startups and SME’s and a majority of your assets should be in more secure and liquid investment products.