One of the basic concepts in finance is that the level of profitability is adequate to the level of risk. Equity crowdfunding can provide a high return on investments, in return the risk associated with them is discussed below.
Risk of losing all or part of the capital invested: The investor should be aware of the risk of losing part or all of the capital invested. This risk is related to the activity of venture capital type (i.e. an investment in early stages of company development). Despite the analysis and diligence of the INVESTOOR team in the analysis of issuances, we cannot guarantee a return on investment.
Liquidity loss risk: Private equity transactions are characterised by investing in alternative assets that by definition are exposed to rapid loss of liquidity. Liquidity depends on the abilities of the emissary.
Risk of lack of valuation: The valuation of the companies is based on the present value of the emissary. This value is calculated on the basis of recent significant transactions involving the company or comparable companies. Regardless of caution and care for these valuations, a valuation is a complex exercise parameters of which are highly dependent on supply and demand, and many other factors. To the risk associated with investing in young companies, not listed on any trading floor, some of the main risk categories present in each company are added, but which are particularly highlighted at the initial stage.
Competition risk: Each market has competitors whose resources may be larger and for which distribution channels may already be advanced. These assets may prevent a company from accessing the market share it anticipated.
Market risk: Market size and growth may be lower than expected and assumed in the business plan.

Threats to human capital: People are the most important resources in start-ups. If a company lost its key staff, it could have serious difficulties in achieving its assumed goals.
Financing risk: A company may not have sufficient funds to conduct its business until profitability is achieved. The anticipation of needs may be undervalued and the cash flow is not sufficient for the company to achieve stability or profitability.
"Investing in shares or stocks involves the risk of losing some or all of your capital. Investors should be aware of the risks involved in investing in shares or stocks, and their investment decisions should be preceded by proper analysis and, if the situation requires it, consultation with an investment adviser and a legal and tax adviser. "