- How it works
- Why invest
- What you get when you invest
- How returns work
- Understanding deal terms
- How we select campaigns
- How to invest
- How Crowdbase makes money
- How to raise capital
- Benefits of crowdfunding
For more answers see our FAQ
What you get when you invest
When you invest through Crowdbase, you provide capital (cash) in exchange for a financial security (shares, debentures or hybrid products) in the business. The investment in the business is bound by an agreement between investors and the issuer, facilitated by Crowdbase.
All securities on Crowdbase are provided in accordance with the EU Crowdfunding Regulation, and the terms of the investment are described in the corresonding Key Investor Information Sheet on each campaign which is prepared in accordance with the relevant regulation.
- Ownership: Equity investments provide investors with ownership stakes in a company, giving them a share in the company's assets and profits.
- Risk and return: Equity investments are considered higher risk than other types of investments but, at the same time, have the potential for higher returns.
- Voting rights: Equity investors may have the right to vote on important company decisions, such as electing board members, approving mergers or acquisitions, and issuing new shares.
- Capital gains: Equity investors may benefit from capital gains, which occur when the value of their shares increases over time.
- Dividends: Equity investors may receive dividends, which are payments made by the company to its shareholders.
- Dilution: Equity investors may experience dilution, which occurs when the company issues new shares, reducing their percentage of ownership.
- Long-term horizon: Equity investments are often viewed as long-term investments, as it can take time for these companies to grow to a point where they can pay back their investors.
- Fixed income: Debt investments provide investors with a fixed rate of return in the form of interest payments. These interest payments can also be variable, usually in the form of a spread over a base rate, like Euribor.
- Lower risk: They are typically considered as having a lower risk than equity investments, as investors have a priority claim on the company’s assets and cash flows.
- Maturity: Debt investments have a fixed maturity date, after which the principal amount is repaid to the investor.
- Risk of default: Debt investments carry the risk of default, which occurs when the company cannot repay the principal or interest payments to its investors.
- Limited influence: Debt investors have limited influence over the company’s operations and decision-making, as they do not have equity ownership or voting rights.
Convertible securities combine equity and debt investment features, as they offer a fixed income until converted into common shares, which can provide the potential for capital appreciation.
- Equity and Debt: Convertible securities have equity and debt investment characteristics, as they can be converted into common stock at a future date.
- Conversion rate: Convertible shares have a conversion rate, specifying the number of shares the investor will receive upon conversion.
- Fixed income: Convertible products often offer a fixed rate of return as dividends (preferred stock) or interest payments (bond) until they are converted into common stock.
- Upside potential: They can offer investors the potential to participate in the upside of a company’s growth while still receiving a fixed rate of return.
- Risk and return: The risk and return profile of convertible securities depends on the specific terms of the investment, including, among others, the conversion rate, dividend rate, and maturity date.
- Flexibility: Convertible shares offer flexibility to both the company and the investor, as they can provide a bridge between equity and debt financing and can be structured in various ways to meet the needs of both parties.
After the successful completion of an equity crowdfunding campaign, investors receive a shareholder certificate.
A shareholder certificate is a document that certifies ownership of a specific number of shares in a company. The certificate contains information such as the shareholder’s name, address, the company’s name, the number of shares owned, and the date of issuance. It serves as proof of ownership and can be used to verify the shareholder’s entitlement to dividends, voting rights, and other shareholder benefits.
Shareholder certificates can be issued in physical or digital form, depending on the company’s preference. In the case of physical certificates, they are typically signed by authorised officers of the company.