Join / Login
How Can We Help?
Table of Contents
< All Topics

What risks do specific security types have?

Posted
Byadmin

Investing in start-up and early-stage businesses can be very rewarding, but investing in those businesses involves a number of risks. To invest in businesses through truCrowd, you need to understand the following important risks:

  1. Risk of Loss of Investment
    Most startup businesses fail and therefore investing in these businesses may involve significant risk and it is likely you may lose all, or part, of your investment. You should only invest an amount that you are willing to lose and should build a diversified portfolio to spread risk. If a business you invest in fails, neither the company – nor truCrowd – will pay you back your investment.

  2. Risk of Lack of Liquidity
    Liquidity is the ease with which you can sell your securities after you have purchased them. Buying securities in businesses pitching through truCrowd cannot be sold easily as they are unlikely to be listed on a secondary trading market such as NASDAQ, AMEX or the New York Stock Exchange. Even successful companies rarely list securities on such an exchange. In addition, if you purchase B Investment Shares, these are non-voting shares and may not be attractive to potential buyers. Without a public market to find a buyer for securities it may be more difficult to sell them. Investment in crowdfunding assets should be viewed as a long term and illiquid investment. Current rules state you must generally keep any purchased securities at least twelve months from the acquisition date.

  3. Risk of Rarity of Dividends
    Dividends are payments made by a business to its shareholders from the company's profits. Most of the companies seeking financing via equity crowdfunding are startups or early stage companies, and these companies will rarely pay dividends to their investors. Profits are typically reinvested into the business to fuel growth and build shareholder value. Businesses have no obligation to pay shareholder dividends.

Categories
Investing in startups and early-stage businesses involves risks including illiquidity, lack of dividends, loss of investment and dilution. Equity crowdfunding should only be executed as part of a diversified portfolio in accordance with the limits set up by the State Securities Board. At truCrowd we exclusively serve resident investors who understand these risks and are capable of making their own investment decisions. , Read the full Risk Warning. California Investor Only – Do not sell my information
2023 © Copyright truCrowd, Inc. All rights reserved.

Important Message

TruCrowd, Inc. a Delaware Corporation, is a funding portal (CRD# 283063) member of FINRA (Financial Industry Regulatory Authority), is registered with the Securities and Exchange Commission (SEC file number: 007-00015) and operates only those sections of this website where Regulation CF Crowdfunding offerings are made. TruCrowd, Inc. does not operate those sections of this Website where (a) Regulation A+, or D offerings are made, or (b) any other types of offerings other than Regulation CF Crowdfunding offerings are made. TruCrowd, Inc. neither makes any recommendation regarding, nor is providing any advice with respect to, any company or offering discussed in this communication.

TruCrowd Services, LLC, an Illinois LLC, is NOT a member of FINRA (Financial Industry Regulatory Authority), is not registered with the SEC (Securities and Exchange Commission) to operate Regulation CF Crowdfunding Portals, is not a Broker/Dealer or an Investment Adviser and does not engage in the operation of any Regulation CF Crowdfunding Portals or offerings. TruCrowd Services, LLC does operate sections of this Website on which Regulation A+ and Regulation D offerings are made. TruCrowd Services, LLC neither makes any recommendation regarding, nor is providing any advice with respect to, any company or offering discussed in this communication.