What are the risks?
The main aspects that an investor considers before investment is the assessment of the risks and of the expected return on the investment.
One considers an investment riskier if its return is less certain, which means that the investor realizes a return within a wider range.
Future return on investments is not always foreseeable. The market conditions might not be favourable, causing only a slow increase or even decrease in the value of investments. On the other hand it is also possible that you realize higher return on your investments than expected. That is what causes the risk of investments.
In case you do not fully understand the risks related to investment through the portal, we suggest you to seek independent professional advice.
The companies raising capital through Tokeportal.hu are early-phase, small or medium-sized companies. Investment in an early-phase company involves significant risks, due to which you might lose the entire or part of the invested amount. Tokeportal.hu warns registered investors that they should invest in companies which raise capital through the portal only if they fully understand and accept the risks involved.
The description below lists the general and significant risks that occur during an investment. However, it does not intend to cover and explain all the possible risk types that can occur. We suggest you to follow and read carefully all the information related to the company you intend to invest in.
The need for diversification
Diversification means that the invested amount is allocated by the investor between several different financial instruments. Diversification cannot eliminate or decrease all the possible risks. We suggest you to invest only a fraction of your disposable income through Tokeportal.hu.
Risk of investing in shares
Investing in shares through www.tokeportal.hu does not guarantee dividend payments.
Loss of capital
Most of early-phase companies go bankrupt or do not reach their formerly defined financial and strategic goals, therefore investing in such companies bears significant risks. This means that you might lose the entire or part of the invested amount, therefore you should invest only a fraction of your disposable income in such companies. In case a company raising capital at Tokeportal.hu goes bankrupt or becomes insolvent, neither the company, nor Tokeportal cannot be obliged to repay your investment
Companies pay dividend from their profit to shareholders. Companies raising capital through Tokeportal.hu usually do not pay dividend, which means that the investors might realize a return on their investment only when they sell their shares. The companies use their profit to fuel the growth of the company and increase shareholder value. Companies are not obliged to pay dividend to shareholders.
Proper liquidity ensures constant trade of the shares. The shares of companies, which raise capital through Tokeportal.hu cannot be traded constantly, therefore the investors bear the liquidity risk of trading the shares.
When a company issues additional shares, the ownership of existing shareholders dilutes. The dilution affects every shareholder who does not purchase any of the new shares. The value of the existing shares decrease due to the dilution.
The financial information and reports of the companies are not subject to statutory audit. As such, the accuracy and reliability of these documents are not guaranteed.
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Top of Form
- What happens to most startup companies?
They go bankrupt
They become successful and maximize shareholder value
- What happens if the startup company I invested in goes bankrupt?
Probably I won’t get my investment back
Tőkeportál Zrt. will compensate me for my loss
- Can I get back the amount I invested at any time?
Yes, the enterprise is liable to pay back the invested amount upon the request of the investor
No, it is not easy to sell my shares except if the company buys back my shares and/or the company offers its shares publicly at a stock exchange
- Do startup companies pay dividend?
Yes, the investors can expect regular dividend payment
No, generally they don’t pay dividend
- What happens if the company I invested in becomes successful and I would like to sell my shares?
The shares are not easy to sell except if the company buys them back and/or the company offers its shares publicly at a stock exchange
The articles of association obliges the company to buy back my shares
- What happens if the company issues additional shares?
The share of those investors who do not purchase additional shares will decrease
The share of those investors who do not purchase additional shares will increase
- Which of the following is the best way to invest in startup companies?
Investing all your money in one company
Investing your money in several companies