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What happens if the company I’ve invested in, or Funderbeam, goes out of business?

What happens if the company I’ve invested in, or Funderbeam, goes out of business?

Last updated on December 13, 2022

As much as we’re working to make this as unlikely as possible, you will need to be aware of this as a possibility, as investing does contain risks.

Investee company

Investing in start-up and early stage companies is inherently risky, and a key risk is that some or all of your investment will be lost due to the failure of the business you are invested in, including where the company is no longer commercially viable and/or officially becomes insolvent. In those circumstances, the value of investments we hold for you (whether acquired on an investment offer or via our Marketplace) will likely drop to zero or to a negligible value. Following the conclusion of the relevant insolvency process, your share of the remaining assets may be distributed to unsecured creditors of the company, if any, which may be significantly less than the amount you have invested.

The actions that Funderbeam is able to take on behalf of investors in these circumstances are likely to be limited, but Funderbeam is mindful of its role in holding investments on investors’ behalf and will endeavour to keep investors updated on the process of any insolvency proceedings where such information is available to us. We will also encourage affected companies to post relevant updates on the Platform.

Funderbeam

We need to distinguish the different investment structures we use in our business when considering a scenario in which a Funderbeam entity becomes insolvent.

Nominee structure

Firstly, when we hold your investment in trust as a nominee or through a nominee securities account with a central securities depository, whether your interest was acquired on an investment offer or on our Marketplace, then these investments are segregated from our assets by law. Funderbeam’s creditors cannot attach any claims against these assets.

SPV (loan note) structure

Secondly, if you have invested via a loan to an SPV with the purpose of making an investment in an investee company, including acquiring such securities via our Marketplace, then the securities issued by an investee company formally belong to the SPV and any rights attached to these securities are legally tied to the loan agreement. The protections for you as an investor are various:
(i) an SPV has no other business than the investment in a single investee company and thus is not subject to claims from third persons;
(ii) the shares of an SPV are not held by the company providing the service to protect against the insolvency of the operational company;
(iii) the repayment obligation under the loan agreement and the investment or any proceeds in relation to the investment are tied together.

Therefore, the insolvency of a Funderbeam entity does not affect your loan relationship with the SPV and the registry of loan note holders can be handed over to another service provider, a Lead Investor, the SPV itself or to another person chosen by investors.

If the operations of the whole Funderbeam group are terminated then it is the responsibility of the liquidator or insolvency administrator to handle the continuance or transfer of the SPV, together with the assets and contractual relationships. Even when the shares of an SPV are handed over to a third person, i.e. not a Funderbeam company, Lead Investor or another person related to a specific syndicate, then the investor’s claim against the SPV and the rights of the SPV as an investor in an investee company remain intact under the loan note agreement.

Funds in your Funderbeam wallet

The funds you transfer to, and hold on, our account for the purposes of making investments (i.e. the Wallet function) are held on client money / trust accounts with recognised and authorised credit institutions. This money is held and segregated as your money and it does not belong to us. Therefore, this can be returned to you upon request.

Whilst we hope this page is informative, you should be aware that Funderbeam does not provide legal, financial or tax advice of any kind to any person, and that if you have questions about how an insolvency situation might affect your own particular circumstances, you should consult an appropriate professional advisor.

️Warning: Investing in early-stage and growth companies puts your capital at risk. Please read our Risk Disclosure Statement

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The information about the investment opportunities profiled on this website is provided for general information and marketing purposes only and should not be considered an invitation or inducement to engage in any investment activity. Complete and comprehensive information about an investment opportunity is only available only to investors who have been approved by a Funderbeam group entity.

You should ensure you carefully read the Risk Disclosure Statement before deciding to proceed with any investment or transaction, including making a purchase of securities via the Marketplace. Funderbeam has taken steps to ensure that company and securities offering information is clear, fair and not misleading in accordance with its internal verification procedures. Funderbeam does not provide investment advice or any recommendation to invest. Any investment opportunity on this website should not be considered as an offer to the public and is not directed at or offered to anyone to whom it may not be so directed or offered, or located in a jurisdiction where it is unlawful to do so.

It is important to note that funds are raised, investments are made and trade orders are placed through three investment firm service provider entities: Venturebeam Markets AS (VBAS) (authorised and regulated by the Estonian Financial Supervision Authority under permit 4.1-1/212), Venturebeam Markets Limited (VML (authorised and regulated by the UK Financial Conduct Authority under FRN 794918), and Venturebeam Markets Pte. Ltd., (VB Pte) (licensed and regulated by the Monetary Authority of Singapore under Capital Markets Services (CMS) license CMS100863). VBAS and VML are MIFID investment firms.

This page provides you with an overview of the services provided by different entities belonging to Funderbeam group. In the pages of this website, platform, and documents located on these pages (save to where referred otherwise), we generally refer to the group, which includes group of entities being direct or indirect subsidiaries of Funderbeam Ltd, including VBAS, VML, and VB Pte, as “Funderbeam”, “we”, “us” or “our”.

A Funderbeam client (whether investor or company) is a client of the service provider and under the protection of the requirements of the regulator under which that service provider operates: An EEA client’s service provider is VBAS, a UK/ non-EEA/ non-Singapore client’s service provider is VML, and a Singapore client’s service provider is VB Pte.

The applicable Funderbeam service provider has, prior to the offering of the investment offer on its Platform, verified from public registries in reasonable levels of due diligence, notwithstanding the due diligence which is also performed by the Lead Investor where applicable, which will cover at the minimum: a. that the project owner has no criminal record in respect of infringements of national rules in fields of commercial law, insolvency law, financial services law, anti-money laundering law, fraud law or professional liability obligations in all jurisdictions where practicable for such checks to be conducted; b. that the project owner is not established in a non-cooperative jurisdiction, or in a high-risk third country as set out by the Financial Action Task Force (“FATF”), and/or other government directives in jurisdictions where Venturebeam is operating.

The Marketplace is operated as an organised market by VB Pte., in Singapore as a Recognised Market Operator (RMO) under the supervision of the Monetary Authority of Singapore. VBAS and VML are Trading Members of the RMO’s Marketplace. Access to the Marketplace for EEA and non-EEA clients is only provided by and through such clients’ service provider (ie VBAS or VML). The Marketplace does not provide services directly to investors outside Singapore.

With respect to any securities or investments offered by a US domiciled Fundraising Company, by visiting this site you confirm you are not a US resident or US person (as defined in Regulation S of the U.S. Securities Act of 1933) and you understand and agree that you are not acquiring any Investments for the account or benefit of any such US resident or US person. No investment opportunity in a US domiciled Fundraising Company is directed at US persons.