Risk Warning
Equity Crowdfunding Risk Warning
Equity Crowdfunding is a viable investment tool. It gives you the opportunity to access early stage investments in Malaysian companies which, prior to the introduction of equity crowdfunding legislations, were only accessible to venture capital companies and sophisticated investors.
Like all investments, this new marketplace has risks you should be aware of. Please take the time to thoroughly understand the characteristics of equity crowdfunding.
Business Risk
Companies seeking to raise funds will typically be early stage or startup companies. Some may be at idea stage while others may have just become profitable. Investing in companies at such early stages may potentially result in significant gains. But new companies are also likely to fail and you could lose your entire investment. In other cases, companies may not grow as expected and end up not hitting their projected targets.
Illiquidity
Equity crowdfunding investments should be done with a long term view. You are investing for the time when the company becomes big and perhaps make an exit when there is an IPO or trade sale. Until then, it may be difficult to find buyers for your shares quickly. And you may have to find buyers yourself. We believe that eventually there will be a secondary market to trade these shares but until then be prepared to hang on to your investment for the long term.
Returns
Startups and early stage companies are focused on growth not returns. They are unlikely to pay out dividends. Profits, if any, are usually reinvested into the business.
Dilution
Growing companies are likely to raise multiple funding rounds. When new shares are issued, your stake is likely to be diluted unless you take your proportion of the new funding requirements. Dilution is not necessarily a bad thing as the value of your stake may be higher than your initial investment if the company’s valuation increases in that funding round. But in some cases, that may not happen and your stake will be diluted in both percentage and value.
Spread Your Risks; Research Well
You should therefore only invest as part of a diversified portfolio. Invest money you are prepared to lose. Read all documents, do your own research and seek advice when unsure.
Initial Exchange Offering Risk Warning
Initial Exchange Offering (IEO) is an innovative way for companies to raise funds and for the public to diversify their investments. IEO is regulated by the Securities Commission of Malaysia and pitchIN has obtained approval from the Securities Commission to operate this IEO Platform.
Like all investments, IEO has risks you should be aware of. Please take the time to thoroughly understand the characteristics of IEO before you invest.
Business Risk
Companies seeking to raise funds will typically be early stage or startup companies. Some may be at idea stage while others may have just become profitable. Investing in companies at such early stages may potentially result in significant gains. But new companies are also likely to fail and you could lose your entire investment. In other cases, companies may not grow as expected and end up not hitting their projected targets.
Illiquidity
IEO investments should be done with a long-term view. The trading, usage or sale of your IEO Tokens may be restricted to approved avenues in order to comply with securities laws. Unless otherwise specified in the IEO Campaign, you should presume that you will need to hold on to your IEO Tokens for the long-term.
Returns
Startups and early stage companies are focused on growth, not returns. IEO Tokens may not carry rights to financial returns.
Spread Your Risks; Research Well
You should therefore only invest as part of a diversified portfolio. Invest money you are prepared to lose.