Disclosures

  • SeedInvest’s due diligence process is no guarantee of success or future results. All investors should carefully review each investment opportunity and cancel their subscription within the allotted time-frame if they do not feel comfortable making any specific investment based on their own DD. Learn more about due diligence on the SeedInvest Blog (https://www.seedinvest.com/blog/angel-investing/how-to-assess-an-investment) and our vetting process in our FAQs (https://intercom.help/seedinvest/en/).

  • SeedInvest’s selection criteria does not suggest higher quality investment opportunities nor does it imply that investors will generate positive returns in investment opportunities on SeedInvest. Learn more about due diligence on the SeedInvest Blog (https://www.seedinvest.com/blog/angel-investing/how-to-assess-an-investment) and our vetting process in our FAQs (https://intercom.help/seedinvest/en/).

  • Diversification is only across multiple early-stage investment opportunities within the asset class. There is no guarantee that this program will lead to a well-balanced portfolio of companies across industry types or stages across the asset class. In addition, enrolling in this program will not lead to diversification across your entire investment portfolio. In order to achieve diversification, we do not recommend you allocate more than 10% of your entire investment portfolio to alternative assets.

  • Testimonials may not be representative of the experience of others and are no guarantee of future performance or success. No individuals were compensated in exchange for their testimonials.

Startup Investing Risks

 

It is important to be able to identify and address startup investment risks before making an investment. Here is a breakdown of the main types of risks you should be aware of.

Personal Risks
Many angel investors have found a startup’s founding team to be one of the main ingredients determining the performance of the company and hence their investments.

Market Risks
Regardless of how promising the product is, there is no guarantee of broad customer demand for a company’s offerings, especially if competitors offer existing close substitutes, or consumers may not be ready for the product’s level of sophistication.

Security Risks
Different types of instruments (preferred equity, common equity, convertible notes) all have different inherent risks unique to their structures and natures that you should be aware of before investing.

Investment Risks
Given the highly volatile nature of startup investments, the entire amount of your investment will be at risk. The potential for a total loss of capital is high for many startup investments and you should refrain from investing unless you can bear the entire loss.

Business Risks
Since many startups have a high potential for disruption and venture into emerging industries, there may be some regulatory challenges involved in their sectors or possible issues on intellectual properties.

External Risks
The company and/or its suppliers’ locations may be sensitive to natural disasters, season volatility and/or pollution problems that could disrupt operations.

View the infographic on Risky Business below, or download it here.

 

This post was written by SeedInvest on November 21, 2017

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