Risk Statement
WAYCROWD’S RISKS STATEMENT ON EQUITY CROWDFUNDING
1. Buyer Beware : You should (a) conduct your own throughout research, investigation and analysis on the issuer and all relevant information and documents provided; and (b) consult your own independent or professional financial and legal advisers, to assess the merits and risks before committing in any investment.
2. Limited Track Record : Issuers using our platform to raise funds are private start-up, early stage, small or medium sized companies. Investment in these types of businesses is relatively speculative and carries higher risks compared to other public securities offerings under Malaysian law.
3. Risks & Uncertainties : Issuer’s performances are subject to risks and uncertainties that may cause actual events and the future results of the Issuer to be different from the anticipated performance. You should be prepared to bear the economic and financial risks of losing your entire investment.
4. Incompleteness of Information : You may not be provided with all financial, business or other information of the Issuer which could be relevant for your investment decision, although believed to be reasonable.
5. No warranty : Offering being made on our platform and registration of our platform with the Securities Commission Malaysia shall not be regarded as merits indication or recommendation to participate in any investment.
6. Illiquid : Your investment made through our platform will be illiquid as there is no public market for the shares of the issuer and you are unlikely to sell your shares until and unless the issuer is listed on the securities exchange market or is acquired by another company which may take a number of years from the time of your investment.
7. Dilution : If the issuer raises additional capital at a later date, it may issue new shares to the new investors and thus the percentage of issuer’s shares that you owned may be diluted accordingly. The new shares may carry certain preferential rights to dividends, sale proceeds and others which may work to your disadvantage.
8. Uncertainty of returns : Depending on the shareholders’ agreement (which differs from business to business), many companies may not opt to pay dividends, therefore depriving investors of early and short-term returns. Businesses often reinvest what they earn in the growth or survival of the business, which may as well be the priority for both business owners and shareholders
9. Material events : Start-up and growing businesses often have highly specialized and focused offerings. This may lead to significant vulnerability of the business to internal and external threats, making it difficult for the business to absorb material events such as loss of key personnel and customers
10. Lack of control : Business rarely give up a big portion of their shares to investors, making most investors a minority shareholder individually or collectively. Minority shareholders have little or no influence on how the company is run. Having said that, as a concern shareholder, investors can make enquiries as well as to offer assistance in ways that the business owners see fit.
11. Forex Risks: All monetary transactions made through our platform shall be in Ringgit Malaysia (RM) unless specified otherwise. As such, if your investment herein is made through a non-RM denominated account, your investment amount may be different depending on the exchange rate of the day as set out by the relevant financial institutions. Any deficit or losses as a result of the fluctuation in exchange rate shall be at your own risk.
12. Limited Due Diligence: No warranty on truth and completeness by Waycrowd : The truth and correctness of the information and statements provided by the Issuers listed on the Platform are primarily and solely the obligation of the Issuers. Waycrowd carries out only limited due diligence on the Issuers, and their statements and information provided on the Platform. Waycrowd does not in anyway provide any warranty as to the truth, correctness or completeness of the information.
13. Financial Projections : Financial Projections wherever provided by the Issuer are mere projections into the future, and there are no guarantees that such projections will be realised.
14. The need for diversification when you invest : Diversification involves spreading your money across different types of investments with different risks to reduce your overall risk. However, it will not lessen all types of risk. Diversification is an essential part of investing. Investors should only invest a proportion of their available investment funds via Waycrowd and should balance this with safer, more liquid investments.
15. Restricted redemption rights : Issuers of the Shares with redemption rights set the terms for redeeming your capital. Investors should be aware that they will not be able to redeem their initial investment under any circumstances other than those set out in the terms and conditions of the documentation of an individual shares or securities, meaning their capital will be locked up for the entire term of the shares or securities, typically 3-5 years and should therefore be viewed as a long term and illiquid investment.
16. Unsecured investment : Unless otherwise set out in the Shares or Securities, these Shares or Securities are typically an unsecured obligation of the Issuer, meaning there is no security over the property or assets of the Issuer supporting the repayment of your interest or capital. This means that if an Issuer fails, it is unlikely that an investor will have their initial investment or outstanding interest payments returned to them because there is no security over any remaining assets.
17. Early Call Risk : In certain instances, the Issuer has the right to repay you your money at any time prior to the formal repayment date. Your investment may be materially curtailed because of this.
18. Lower in the pecking order on winding up : If an Issuer falls into financial difficulty and goes out of business, other creditors and debt holders with seniority – including fixed charge holders, administrators, employees who are owed wages, banks, and secured creditors - will be compensated first. This means it is unlikely shareholder / securities investors, whose unsecured investment sits below all of the previously mentioned in the pecking order, will have their initial investment or outstanding interest payments returned to them after higher ranked creditors are compensated.
19. Interest rate and inflation risks : Most Shares/ Instruments that pay interest, if any, are at a fixed rate rather than by reference to an underlying index. Accordingly you should note that a rise in interest rates may adversely affect the relative returns that mini-bonds offer. Further, inflation may reduce the real value of the returns over time.
20. Losses : You may lose your entire investment, and must be in a position to bear this risk without undue hardship.