Any natural or legal person can become an investor in units of securitization funds on the platform as long as they meet the following criteria:
Reside in another country, but be of nationality from the Economic Area or an Equivalent country. Reside in a country of the Economic Area or an Equivalent country.
- Transparency in the diligence in terms of customer knowledge (KYC) and the delivery of proof of identity.
Have legal capacity, except for the specific case of minor clients (specific procedure).
- To be able to be considered as a “professional client on option” within the meaning of the General Regulations of the Financiers.
Be able to invest a minimum of € 1,000 upon registration. Respect the criteria for the fight against money laundering and the financing of terrorism, such as not appearing on the “asset freeze” list. Special treatment is applied to people said to be politically exposed. When it comes to the key investment terms then this is important.
At least two of the following criteria must be met:
- Holding a portfolio of financial instruments with a value greater than € 500,000
Carrying out transactions, each of a significant size (i.e. € 600), on financial instruments, at the rate of at least ten per quarter on average over the previous four quarters;
- Occupation for at least one year, in the financial sector, of a professional position requiring knowledge of investing in financial instruments.
Beyond the general criteria clearly displayed by investors, there are implicit criteria that underlie their decision to invest or not. It is important that you are aware of this to better understand their expectations.
What are the challenges for investors?
The remuneration that the investor can expect from the investment is of several types:
During the term of the investment, in respect of dividends and possible interest however, in the context of a business creation project, the probability of dividend distribution is very low, insofar as the net accounting income is reinvested in the business in order to finance its development. The interest linked to an investment in the form of bonds generates remuneration, but which is not sufficient in relation to the risks taken,
In the long term, when the securities are resold, any capital gain realized. The remuneration of the private equity company results from the difference between the sale price and the purchase price of each security. This added value depends on the value created by the company in the meantime, and on the appetite of the market at the time of resale.
For the investor, at the level of an investment, the risks to be assessed are therefore the following:
The risk of profitability
Is that the resale of his shares in the company does not allow him to achieve a level of profitability deemed sufficient. To realize a significant capital gain, the selling price must be much higher than the purchase price, and therefore, in the meantime, the company has created more value. A business that would show consistent results, while profitable, would not be a good deal for an investor. The return on the investment for an investor is calculated in the form of the IRR (= Internal Rate of Return), a variable taking into account the amount of the capital gain and the period during which “the investment is blocked”,