risks
  • Early stage investing is a risky venture and many early stage companies fail. Though we provide you with our own diligence, we can’t give you all the information necessary to make a judgment. For more information on the risks of investing, contact us and we’d be happy to speak with you.

  • IVEST.AI provides company information and analysis that have been prepared for the purpose of providing limited confidential information to IVEST.AI investors who have expressed an interest in becoming investors in limited partnerships purchasing securities in portfolio companies through IVEST.AI. This information does not purport to include all of the information necessary to evaluate an investment in any of the companies presented. Every investor (“Investor”) should be aware that an investment in a single company or multiple companies on the IVEST.AI platform (each, a “Startup”) involves a high degree of risk. There can be no assurance that (1) IVEST.AI’s investment objectives will be achieved, (2) a Startup will achieve its business plan, or (3) an investor will receive a return on any part of its investment.

  • Investments in Startup’s involve a high degree of risk. Financial and operating risks confronting Startup’s are significant. While targeted returns should reflect the perceived level of risk in any investment situation, such returns may never be realized and/or may not be adequate to compensate an Investor for risks taken. Loss of an Investor’s entire investment is possible and can easily occur. Moreover, the timing of any return on investment is highly uncertain.

  • The Startup market is highly competitive and the percentage of companies that survive and prosper is small. Startup investments often experience unexpected problems in the areas of product development, manufacturing, marketing, financing, and general management, among others, which frequently cannot be solved. In addition, Startup’s may require substantial amounts of financing, which may not be available through institutional private placements, the public markets or otherwise.

  • Investment in Technologies

  • The value of an Investor’s interests in Startup’s may be susceptible to factors affecting the technology industry and/or to greater risk than an investment in a vehicle that invests in a broader range of securities. Some of the many specific risks faced by such Startup’s include:

    • Rapidly changing technologies;

    • Products or technologies that may quickly become obsolete;

    • Scarcity of management, technical, scientific, research and marketing personnel with appropriate training;

    • The possibility of lawsuits related to patents and intellectual property;

    • Rapidly changing investor sentiments and preferences with regard to technology sector investments (which are generally perceived as risky); and Exposure to government regulation, making these companies susceptible to changes in government policy and delays or failures in securing regulatory approvals.

  • Changing Economic Conditions

    • The success of any investment activity is determined to some degree by general economic conditions. The availability, unavailability, or hindered operation of external credit markets, equity markets and other economic systems, which an individual Startup may depend upon to achieve its objectives may have a significant negative impact on a Startup’s operations and profitability. The stability and sustainability of growth in global economies may be impacted by terrorism, acts of war or a variety of other unpredictable events. There can be no assurance that such markets and economic systems will be available or will be available as anticipated or needed for an investment in a Startup to be successful. Changing economic conditions could potentially, and frequently do, adversely impact the valuation of portfolio holdings.

  • Future and Past Performance

    • The past performance of a Startup or its management is not predictive of a Startup’s future results. There can be no assurance that targeted results will be achieved. Loss of principal is possible, and even likely, on any given investment.

  • Difficulty in Valuing Startup Investments

    • It is enormously difficult to determine objective values for any Startup. In addition to the difficulty of determining the magnitude of the risks applicable to a given Startup and the likelihood that a given Startup’s business will be a success, there generally will be no readily available market for a Startup’s equity securities, and hence, an Investor’s investments will be difficult to value.

  • Minority Investments

    • A significant portion of an Investor’s investments will represent minority stakes in privately held companies. As is the case with minority holdings in general, such minority stakes will have neither the control characteristics of majority stakes nor the valuation premiums accorded majority or controlling stakes. Investors will be reliant on the existing management and board of directors of such companies, which may include representatives of other financial investors with whom the Investor is not affiliated and whose interests may conflict with the interests of the Investor.

  • Lack of Information for Monitoring and Valuing Startup’s

    • The Investor may not be able to obtain all information it would want regarding a particular Start-up, on a timely basis or at all. It is possible that the may not be aware on a timely basis of material adverse changes that have occurred with respect to certain of its investments. As a result of these difficulties, as well as other uncertainties, an Investor may not have accurate information about a Startup’s current value.

  • No Assurance of Additional Capital for Startup’s

    • After an Investor has invested in a Startup continued development and marketing of the Startup’s products or services, or administrative, legal, regulatory, or other needs, may require that it obtain additional financing. In particular, technology Startup’s generally have substantial capital needs that are typically funded over several stages of investment. Such additional financing may not be available on favorable terms, or at all.

  • Absence of Liquidity and Public Markets

    • An Investor’s investments will generally be private, illiquid holdings. As such, there will be no public markets for the securities held by the Investor and no readily available liquidity mechanism at any time for any of the investments.

  • Tax Risks

    • There are many tax risks relating to investments in Startup’s that are difficult to address and are complicated. You should consult your tax advisor for information about the tax consequences, in your jurisdiction, of purchasing equity securities of a Startup.

  • Withholding and Other Taxes

    • The structure of any investment in a Startup may not be tax efficient for any particular Investor, and no Startup investment guarantees that any particular tax result will be achieved. Investors should consult their own professional advisors with respect to the tax consequences to them of an investment in a Startup under the laws of the jurisdictions in which the Investors and/or the Startup are liable for taxation.

  • Limited Operating History of Funds

    • Each Fund is or will be a newly formed entity and has no operating history. Each Fund’s investment program should be evaluated on the basis that the Advisor’s, or where appropriate, a Lead Angel’s assessment of the prospects of investments may not prove accurate and that the Fund will not achieve its investment objective. Past performance of a Lead Angel, the Advisor or its principals, or the management of a Startup is not predictive of future results.

  • Conflicts of Interest; Investment Opportunities

    • Instances may arise in which the interest of a Lead Angel (or its members or affiliates) may potentially or conflict with the interests of a Fund and/or its Investors. For example, conflicts of interest may arise as a result of a Lead Angel having investments in portfolio companies of the relevant Fund as well as other investments both public and private.

  • Diverse Investors

    • Investors in a Fund may have conflicting investment, tax, and other interests with respect to Startup investments, which may arise from the structuring of a Startup investment or the timing of a sale of a Startup investment or other factors. As a consequence, decisions made by the manager of a Fund on such matters may be more beneficial for some Investors than for others. Investors should be aware that the manager of a Fund intends to consider the investment and tax objective of each Fund and Investors as a whole when making decisions on investment structure or timing of sale, and not the circumstances of any Investor individually.

  • Lack of Investor Control

    • Investors in a Fund will not make decisions with respect to the management, disposition or other realization of any investment made by the relevant Fund, or other decisions regarding such Fund’s business and affairs.

  • Confidential Information

    • Certain information regarding the Startup’s will be highly confidential. Competitors may benefit from such information if it is ever made public, and that could result in adverse economic consequences to the Investors.

  • Forward Looking Statements

    • The information available to Funds and Investors may contain "forward-looking statements". These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often include words such as "anticipates," "estimates," "expects," "projects," "intends," "plans," "believes" and words and terms of similar substance in connection with discussions of future operating or financial performance. Examples of forward-looking statements include, but are not limited to, statements regarding: (i) the adequacy of a Startup’s funding to meet its future needs, (ii) the revenue and expenses expected over the life of the Startup, (iii) the market for a Startup’s goods or services, or (iv) other similar maters.

    • Each Startup’s forward-looking statements are based on management's current expectations and assumptions regarding the Startup’s business and performance, the economy and other future conditions and forecasts of future events, circumstances and results. As with any projection or forecast, forward-looking statements are inherently susceptible to uncertainty and changes in circumstances. The Startup’s actual results may vary materially from those expressed or implied in its forward-looking statements. Important factors that could cause the Startup’s actual results to differ materially from those in its forward-looking statements include government regulation, economic, strategic, political, and social conditions and the following factors:

      • recent and future changes in technology, services, and standards; changes in consumer behavior;

      • changes in a Startup’s plans, initiatives and strategies, and consumer acceptance thereof;

      • changes in the plans, initiatives, and strategies of the third parties that are necessary or important to the Startup’s success; competitive pressures, including as a result of changes in technology;

      • the Startup's ability to deal effectively with economic slowdowns or other economic or market difficulties;

      • increased volatility or decreased liquidity in the capital markets, including any limitation on the Startup’s ability to access the capital markets for debt securities, refinance its outstanding indebtedness or obtain equity, debt or bank financing on acceptable terms; the failure to meet earnings expectations; the adequacy of the Startup's risk management framework; changes in GAAP or other applicable accounting policies;

        • the impact of terrorist acts, hostilities, natural disasters (including extreme weather) and pandemic viruses;

        • a disruption or failure of the Startup's or its vendors' network and information systems or other technology on which the Company's businesses rely; changes in tax, federal communication and other laws and regulations;

        • changes in foreign exchange rates and in the stability and existence of foreign currencies; andother risks and uncertainties which may or may not be specifically discussed in materials provided to Investors.

    • Any forward-looking statement made by a Startup speaks only as of the date on which it is made. Start-ups are under no obligation to, and generally expressly disclaim any obligation to, update or alter their forward-looking statements, whether as a result of new information, subsequent events or otherwise.

  • THE FOREGOING RISKS DO NOT PURPORT TO BE A COMPLETE EXPLANATION OF ALL THE RISKS INVOLVED IN ACQUIRING EQUITY SECURITIES IN A  STARTUP ON THE IVEST.AI PLATFORM. EACH INVESTOR IS URGED TO SEEK ITS OWN INDEPENDENT LEGAL AND TAX ADVICE AND READ THE RELEVANT INVESTMENT DOCUMENTS BEFORE MAKING A DETERMINATION WHETHER TO INVEST IN A STARTUP.

  • December 11, 2017 v1.4