Equity Terms and Conditions

1. INTRODUCTION

1.1  These terms and conditions (the “Equity Terms”) set out the terms on which each User of the Equity Services uses such Services.

1.2  These Equity Terms are part of the User Terms and should be read in conjunction with the other applicable documents making up the User Terms in particular the Website Terms and the Privacy Policy.

2. DEFINITIONS AND INTERPRETATION

2.1  Capitalised terms not otherwise defined herein shall have the meaning given in the other documents that make up the User Terms.

3. CATEGORISATION AND CERTIFICATION OF INVESTORS

3.1  In accordance with the Financial Services and Markets Act 2000 (“FSMA”), Crowd2Fund classifies each Investor as a Certified High Net Worth Individual, a Sophisticated Investor or a Retail Investor. It is the Investor’s responsibility to self-certify where appropriate and applicable and to do so truthfully and completely.

3.2  Every Investor will be required to fill out a risk understanding questionnaire before creating an Account. Based on the answers given in this questionnaire it may be necessary in some cases to exclude one or more Retail Investors from access to some or all of the Equity Services.

3.3  In respect of its regulated activities, Crowd2Fund is authorised and regulated by the FCA (under reference number 623683).

4. THE WALLET

4.1  In order to make an investment in a Campaign, an Investor must ensure that its Wallet contains funds at least equal to the Investment Amount.

4.2  When an Investor makes a pledge to a Campaign, the Investment Amount shall be deducted from the available funds in its Wallet. The Investment Amount shall be held in the Crowd2Fund Escrow Wallet.

4.3  Subject to the rest of these Equity Terms, in the event that the Target Amount is met, the Investment Amount shall be credited from the Crowd2Fund Escrow Wallet to the Campaign Creator’s Wallet.

4.4  In the event that:

  • (a) the Target Amount is not met prior to the Long-Stop Date; or
  • (b) any of the events in clause 6.5 occur, the Investment Amount shall be transferred from the Crowd2Fund Escrow Wallet back to the Investor’s Wallet.

5. INVESTMENT PROCESS

5.1  After completing the registration process and creating an Account, a Campaign Creator who is looking to create an Equity Campaign must complete the business profile and business plan sections of their dashboard on the Website before submitting a Campaign Description to Crowd2Fund.

5.2  To submit a Campaign Description, the Campaign Creator shall supply as a minimum:

  • (a) information on the purpose of the Campaign;
  • (b) the Target Amount;
  • (c) the amount of equity (as a percentage) that will be given in aggregate to the Investors;
  • (d) the Minimum Contribution that an Investor can invest;
  • (e) whether the company qualifies for SEIS and/or EIS relief; and
  • (f) the proposed Commencement Date and Campaign Closing Date of the Campaign.

5.3  After the Campaign Description (including the Target Amount) has been submitted by the Campaign Creator, Crowd2Fund will review the information provided and, in its sole and absolute discretion, will either decide to approve, amend or reject the Campaign Creator’s Campaign Description for publication on the Website.

5.4  A Campaign will only be eligible for approval if the following requirements are satisfied:

  • (a) the Campaign Creator is a company limited by shares or a public limited company;
  • (b) the Campaign Creator has a UK bank account to facilitate payments;
  • (c) the business of the Campaign Creator does not involve lending money or leasing assets held on its own balance sheet;
  • (d) the Campaign Creator is in business with the intention of making a profit and is not a not-for-profit or charitable business.

5.5  A Campaign Creator may request when submitting a Campaign Description that the Campaign can be overfunded. If Crowd2Fund accepts this request, Crowd2Fund shall display a prominent disclaimer notice on the Campaign Description at the start of and throughout the Campaign. All Investors acknowledge and agree that if a Campaign is overfunded, the amount of equity they receive may be diluted and/or reduced. Neither Crowd2Fund nor the Campaign Creator shall be liable for any damages or loss incurred relating to this clause or for any overfunded Campaign.

5.6  Campaign Creators agree to use their best endeavours to run their business in accordance with what has been submitted in the Campaign Description.

5.7  If the Campaign Description is approved by Crowd2Fund, the Campaign shall start on the date of approval and Investors may start pledging Investment Amounts in return for the subscription of the stated amount of shares. The Campaign shall end on the Campaign Closing Date.

5.8  If the Campaign reaches at least its Target Amount before the Campaign Closing Date:

  • (a) a new set of articles of association shall be adopted by the Campaign Creator The date of adoption of the new articles of association is the “Closing Date”;
  • (b) on or after the Closing Date, the Investment Amounts shall be credited from the Crowd2Fund Escrow Wallet to the Campaign Creator’s Wallet. The Campaign Creator shall then be permitted to transfer the Investment Amounts to the Campaign Creator’s designated bank account;
  • (c) the Campaign Creator shall procure that share certificates are issued to each of the Investors after the date on which the Investment Amounts clear into the Campaign Creator’s bank account; and
  • (d) the Campaign Creator shall procure that all relevant administration is completed and that all necessary forms and resolutions are filed at Companies House.

6. INVESTOR INVESTMENT

6.1 Investors acknowledge that when Crowd2Fund approves a Campaign Description, it does so in its capacity of operating an electronic system in relation to lending. Investors both acknowledge and agree that Crowd2Fund’s approval of a Campaign Description as a financial promotion is not an approval of the Campaign Description in general, and that no inference shall be made to the same.

6.2  Investors can view current Campaigns by navigating to the “Opportunities” page of the Website when they are logged in to the Website.

6.3  If an Investor decides to make an investment in a Campaign, it must already have transferred sufficient funds into its Wallet before pledging the Investment Amount.

6.4  When an Investor has made a pledge to a live Campaign, it can increase its Investment Amount, but not decrease it. If an Investor chooses to increase its Investment Amount, it shall repeat the pledge process.

6.5  After an Investor has pledged any Investment Amount to a Campaign, it will be non-refundable save for when:

  • (a) the Campaign is unsuccessful by reason of not meeting the Target Amount; or
  • (b) the Campaign Creator, in its sole and absolute discretion, rejects the Investment Amount from the Investor; or
  • (c) Crowd2Fund cancels the Campaign or any Investment Amount, in which case the Investor’s funds will be transferred from the Crowd2Fund Escrow Wallet to the Investor’s Wallet.

6.6  If the Campaign reaches the Target Amount, on or after the Closing Date

  • (i) the aggregate of the Investment Amounts shall be transferred from the Crowd2Fund Escrow Wallet to the Business Wallet
  • (ii) each Investor may be required to execute a subscription agreement,
  • (iii) the Campaign Creator shall amend its articles of association (if applicable),
  • (iv) the Campaign Creator will as soon as reasonably practicable and in any event within 14 days of the date of the investment, register the share issue at Companies House and provide the Investors with share certificates evidencing their shareholdings.

6.7  Any third party charges or transaction fees will be charged to the Investor in addition to the Investment Amount. These charges shall be displayed to the Investor prior to it making a pledge of an Investment Amount and shall be deducted from its Wallet.

7. SEIS/EIS

7.1  If a Campaign Creator submits a Campaign Description for a Campaign and intends for Investors to receive SEIS relief on their investment (an “SEIS Equity Campaign”), the maximum total amount that the Campaign Creator will be able to raise in any such SEIS Equity Campaign shall be £150,000. No Investor shall be permitted to invest more than £100,000 into an SEIS Equity Campaign in any tax year.

7.2  If an SEIS Equity Campaign is successful on the Campaign Closing Date:

  • (a) the Campaign Creator shall represent and warrant to each Investor in the terms of the warranties as set out in Schedule 1; and
  • (b) the Investors (if claiming SEIS relief) shall represent and warrant to the Campaign Creator in the terms of the warranties set out in Schedule 3.

7.3  If a Campaign reaches the Target Amount on an SEIS Equity Campaign, it shall not be able to submit a Campaign Description for a further Campaign in which it intends for Investors to receive EIS relief (an “EIS Equity Campaign”) save for when it has complied with all laws and procedures relating to the spending of funds raised from an SEIS Equity Campaign and can provide proof of this in a Campaign Description for an EIS Equity Campaign. Any EIS Equity Campaign that does not comply with this clause shall be cancelled immediately and any Investment Amounts pledged returned to the Investor’s respective Wallets.

7.4  If an EIS Equity Campaign is successful on the Campaign Closing Date:

  • (a) the Campaign Creator shall represent and warrant to each Investor in the terms of the warranties as set out in Schedule 2; and
  • (b) the Investors (if claiming SEIS relief) shall represent and warrant to the Campaign Creator in the terms of the warranties set out in Schedule 3.

7.5  Investors acknowledge and agree that the grant and continued availability of SEIS relief and EIS relief in relation to their subscription for shares is not within the control of Crowd2Fund and that Crowd2Fund shall not be liable in any manner to Investors for any refusal by HMRC to grant relief and/or any withdrawal of relief during or after the end of the relevant periods.

8. CROWD2FUND FEES

8.1 Crowd2Fund charge Campaign Creators of all successful Equity Campaigns that reach at least the Target Amount the following:

FeeAmount Raised
5.00%on the first£50,000
Then;4.50%on the next£50,001 - £100000
4.00%on the next£100001 - £200000
3.50%on the next£200,001 - £300,000
3.00%on the next£300,001 - £500,000
2.50%on the next£500,001 - £1,000,000

8.2  Crowd2Fund shall charge the Campaign Creator standard legal fees of £1,250 (excluding VAT) and an administration fee of £500 (excluding VAT).

8.3  Crowd2Fund shall also charge the Campaign Creator for any additional professional or administrative charges that are necessary for the Equity Campaign to be completed. Any such charges will be notified to the Campaign Creator in advance.

8.4  Crowd2Fund may, in their sole and absolute discretion, waive any of the fees (whether in full or in part) listed in this clause 9.

9. ANTI-MONEY LAUNDERING

9.1  Crowd2Fund shall perform credit and ID verifications (via third party supplier) on all Campaign Creators and Investors who are investing over £2,000. Campaign Creators shall not receive any funds until all anti-money laundering checks have been performed on each Campaign.

10. DISCLAIMER AND LIABILITY

10.1  Crowd2Fund does not accept any responsibility for any return on investment stated by a Campaign Creator, whether in the Campaign Description or otherwise. In the event that a Campaign Description submitted by a Campaign Creator is deliberately misleading or unlawful, that Campaign shall be cancelled and any money pledged shall be immediately credited to the Investor’s respective Wallets.

10.2  Crowd2Fund’s due diligence into a Campaign Creator is limited only to the Campaign Description and ensuring that the company is in existence and registered at Companies House. Crowd2Fund makes no warranty or representation and assumes no liability in respect of the Campaign Creator or the content of any Campaign Description.

10.3  Investors acknowledge and agree that Crowd2Fund does not provide any advice or recommendations in relation to investments.

10.4  Crowd2Fund is not liable for any damages or loss incurred relating to Campaigns. Both Campaign Creators and Investors acknowledge and agree to release Crowd2Fund, its officers, employees, agents and successors from any legal claim, whether known or unknown, arising out of their use of the Website or any Campaign.

10.5  All dealings are solely between Campaign Creators and Investors. Crowd2Fund is not obligated to get involved with any dispute between a Campaign Creator and Investors in any and all circumstances.

11. GENERAL

11.1  Campaign Creators are advised not to take any action in reliance of a Campaign reaching the Target Amount until they have the ability to draw the funds from the Business Wallet.

11.2  Crowd2Fund reserves the right to cancel/reject a pledge from an Investor for any reason and at any time.

11.3  Crowd2Fund reserves the right to extend, cancel, interrupt, suspend and remove a Campaign for any reason and at any time. Crowd2Fund shall not be liable for any damages as a result of any action taken under this clause.

11.4  Nothing in these Equity Terms is intended to or shall be deemed to, establish any partnership or joint venture between any of the Parties or constitute any Party the agent of another Party.

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