Important Warning
Don't invest unless you're prepared to lose all the money you invest. This is a high-risk investment and you are unlikely to be protected if something goes wrong.
Key Risks
1. Capital Loss
Most startups fail. If the company fails, you will likely lose your entire investment as common shareholders are last in line to receive any proceeds.
2. Illiquidity
These shares are not traded on a stock exchange. You may not be able to sell them for years, or ever. You should be prepared to hold for 5-10+ years.
3. Dilution
If the company raises more money in the future, your ownership percentage may decrease unless you invest more. New investors may get better terms than you have.
4. No Dividends
Early-stage companies rarely pay dividends. Any profits are typically reinvested. Don't expect regular income from these investments.
5. Valuation Uncertainty
The valuation of early-stage companies is highly speculative. The price you pay may not reflect the true value of the company.
6. Limited Information
You will have less information than professional investors. The company knows more about itself than is disclosed.
Mitigation Strategies
- Diversify across multiple investments
- Only invest money you can afford to lose
- Do your own research beyond platform materials
- Limit crowdfunding to a small portion of your overall portfolio