Risk Factors

RISK FACTORS

You understand the risks of investing on the Platform include but are not limited to:

  1.  Complete Loss of Capital. Most start-up businesses, and many other businesses, fail and therefore, investing in these businesses may involve significant risks. If you invest in a business displayed on the Platform, it is significantly more likely that you will lose all of your invested capital than you will see any return of capital or a profit. 
    In the event of a business failing you will be liable, as a shareholder in a business, and it is likely that you may lose all, or part, or your investment.If a business you invest in fails, neither the company you invest in nor Edx will pay you back you investment. You should only invest an amount that you are willing to lose and should build a diversified portfolio to spread risk.You should not invest more money in the types of businesses displayed on the Platform than you can afford to lose without altering your standard of living.
  2.  Irrelevance of past performance. Past performance of a business or investment is not an indication of future performance of that business or investment. The value of your investment may go down as well as up due to a number of factors including but not limited to the volatility of world markets, interest rates and capital values. You may not necessarily get back the amount you invested.
  3.  Illiquidity. Almost all investments you make in businesses displayed on the Platform will be highly illiquid. It is very unlikely that there will be a secondary market for the Shares of the Investee Company. This means that you are unlikely to be able to sell your Shares until and unless the Investee Company floats on a stock exchange or is bought by another company; and, even if the Investee Company is bought by another company or floats, your investment may continue to be illiquid. Even for a successful business, a flotation or purchase is unlikely to occur for a number of years from the time you make your investment.
  4.  Rarity of Dividends. Businesses of the type displayed on the Platform rarely pay dividends. This means that if you invest in a business 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. As explained above, even for a successful business this is unlikely to occur for a number of years from the time you make your investment.
  5.  Subsequent Dilution. Any investment you make in a business displayed on the Platform is likely to be subject to dilution. This means that if the business raises additional capital at a later date, it will issue new shares to the new investors, and the percentage of the Investee Company that you own will decline. These new shares may also have certain preferential rights to dividends, sale proceeds and other matters, and the exercise of these rights may work to your disadvantage. Your investment may also be subject to dilution as a result of the grant of options (or similar rights to acquire shares) to employees of, service providers to or certain other parties connected with, the Investee Company.
  6.  Diversification. If you choose to invest in businesses of the type displayed on the Platform, such investments should only be made as part of a well-diversified portfolio. This means that you should invest only a relatively small portion of your investable capital in such businesses, and the majority of your investable capital should be invested in safer, more liquid assets. It also means that you should spread your investment between multiple businesses rather than investing a larger amount in just a few.

We do not provide advice or recommendations with respect to any aspect of transactions conducted through the Platform, other than advice on the technical use of the Platform. This means, among other things, that we cannot give you any investment, legal, tax or other advice in connection with your membership or any investments you make through the Platform, and nothing on the Platform or in any communications we send to you is intended to constitute advice or a recommendation. If you need or want advice, you should consult an appropriate professional financial, legal, tax or other business adviser.