Investing and trading is inherently risky. For example, people agree that 90% of start-up companies fail. This number is probably not precise, but it serves as guidance for understanding the risk. Therefore, the value of your investment can definitely fluctuate, it can go down as well as up, and is not guaranteed.
There are number of risks you should consider before making any investment. In general, risks are mainly related to:
– the industry and geographical region in which the company is operating,
– the business model and operations of the company itself,
– the life-cycle of the company,
– investment and trading in the instrument.
Investing into early-stage companies or projects involves clearly risks that are different from those when investing into businesses with longer operating history. Also, not all the risks inherent to the business may be known to, or considered material by, the company, its founders or yourself at the moment of investing.
We encourage all users of our platform who consider backing early-stage companies, and investing their funds, to carefully review the information disclosed by the start-up company or the lead investor, and consider all the risks inherent in making an investment. You should actively ask questions from, and express your concerns to, the company and the lead investor if something remains unclear.
In addition to the potential risks, you should carefully consider your own financial position, and other personal aspects before making the investment. Where necessary, you should consult with your legal adviser, financial adviser or tax adviser.
Early stage investing involves risks, and should never be done with money you cannot afford to lose.