Risk Warning

Any investment carries risk. Please ensure you engage in your own independent due diligence before making any investment decision. Additionally, to fully understand the risks involved when investing in equity or debt on InvestDen, please read the following summary:



Loss of investment

The vast majority of start-up businesses fail and therefore investing in these businesses may involve significant risk.  It is likely that you may lose all, or part, of your investment.  You should only invest an amount that you are willing to lose. lf the business you invest in fails, neither the Clasp Investments Limited, or InvestDen, will pay you back your investment.  You should also diversify your investments. Diversification is a fundamental tenet of investing. Investors should only invest a percentage of their apportioned investment capital through InvestDen and should balance any investment with other safer, more liquid investments.  



Equity Risks

Investing in equity on InvestDen does not involve a regular return on your investment. You may not not receive any dividend payments or be able to exit your holding.



Lack of liquidity

Liquidity is the markets ability to facilitate an asset being sold without having to reduce its price very much. Investments in InvestDen businesses may have no liquidity. You may not be able to re-sell the shares you have purchased in businesses through InvestDen. Therefore you may be in a position where you can not exit your holding until there is secondary interest or some liquidity event, which may never occur.  



Dividends

Dividends are payments to shareholders usually as a distribution of profits. As most of the investments on InvestDen are early stage investments, you should not expect to receive any dividend payments arising from your investment. Early stage businesses usually invest their profits back into the business to foster growth which could ultimately benefit the shareholders.



Dilution

Dilution is a reduction in the ownership percentage of a share of stock caused by the issuance of new stock. An investment in shares in a business via InvestDen may be subject to dilution in the future. Dilution has an effect on a number of things, including voting, dividends and value. It is your responsibility to indentify what class of shares you are receiving in any investment and to determine if you have any pre-emptive rights which could protect you from dilution (such rights may allow you the opportunity to buy additional shares during further funding raises to increase or preserve your shareholding). You should carefully examine all material, including but not limited to, the Articles of Incorporation to assess your rights. 



Risks when investing in Debt

Debt is a very different investment as compared to equity. When you invest in the debt of a company, you do not “own” the company, however, instead you become a creditor of the company, and while the company remains solvent, you are entitled to  receive regular interest payments from the company and then your initial investment back at the end of the term of the debt obligation. The company issuing the debt (the “Issuer”) is solely responsible for their own financial status and consequently their ability to pay interest and return investors’ capital when the debt matures. InvestDen doe not vet the financial health of any company and is not responsible for the performance of the debt.



Loss of investment and interest payments

Investing in debt may involve significant risk. In the event of an Issuer failing to sustain as a solvent business, it is likely that you may lose all, or part, of your initial investment and receive no outstanding or future interest payments. 

If a business you invest in fails, neither the company you invest in, or InvestDen, will pay you back your investment. You should only invest an amount that you are willing to lose and should build a diversified portfolio to spread risk.



Liquidity

Liquidity is the ease with which you can sell your investments after you have purchased them. Investments in debt via InvestDen may not be resold due to transferability restrictions, or there may not be sufficient interest in any secondary market. Please refer to the individual debt documentation for full details of transferability, early repayment and other key relevant provisions. Investments in debt through InvestDen should be viewed as a long term and illiquid investment.



Unsecured investment

Debt is typically an unsecured investment, meaning there is no security over property or assets supporting the purchase of obligation. Therefore, if an Issuer fails, it is unlikely that an investor will have their initial investment or outstanding interest payments returned to them because there is no security over any remaining assets. 



Lower in the waterfall

If an Issuer falls into financial difficulty and goes bankrupt or into creditor protection, other creditors and debt holders with seniority, including fixed charge holders, administrators, employees who are owed wages, banks, and secured debtors, will be compensated first. Therefore in a waterfall of payments it means that debt holders via InvestDen would be very low in priority to receive their initial investment or outstanding interest payments returned to them after higher ranked creditors are compensated.