Seedling

Last updated: December 1, 2024

Risk Disclosures

Important Warning: Investing in startups and early-stage companies is highly speculative and involves a high degree of risk. You may lose your entire investment. Please read this document carefully before investing.
Note: This is a prototype/demo application. These Risk Disclosures are structurally realistic but are placeholder text for demonstration purposes only.

1. General Investment Risk

  • •Startup investments are highly speculative. The majority of startups fail, and you should be prepared to lose your entire investment.
  • •Returns on startup investments are highly uncertain and typically not realized for many years, if at all.
  • •Do not invest money you cannot afford to lose entirely.
  • •Startup investing is not suitable for all investors. Consider your financial situation, investment objectives, and risk tolerance before investing.

2. Illiquidity Risk

  • •Investments made through this platform are illiquid. There is currently no established secondary market for these securities.
  • •For equity-type securities, you may be unable to sell your investment for 12 months or more after the campaign closes, pursuant to Securities Act Rule 144.
  • •Even after the applicable holding period, there may be no buyer for your securities.
  • •You should plan to hold your investment for a minimum of 5-10 years or until a liquidity event (such as an acquisition or IPO), which may never occur.

3. Dilution Risk

  • •Your ownership percentage in a company may be reduced (diluted) if the company raises additional capital in future funding rounds.
  • •Future investors may receive shares with preferential rights (such as liquidation preferences) that reduce the value of your shares.
  • •Employee stock options and other equity compensation programs may also dilute your ownership percentage.

4. Limited Information Risk

  • •Early-stage companies may have limited financial histories and unproven business models.
  • •The financial projections provided by companies are forward-looking statements and may not be accurate.
  • •You may not have access to the same information that professional investors have when evaluating these opportunities.

5. Management Risk

  • •The success of an early-stage company depends heavily on the quality and experience of its management team.
  • •Key personnel may leave the company, which could significantly harm its prospects.
  • •Founders may lack experience in managing a growing business.

6. Market and Competition Risk

  • •The market for a company's products or services may not develop as expected.
  • •Larger, better-resourced companies may enter the market and compete directly.
  • •Technological changes may render a company's products or services obsolete.
  • •Economic downturns can disproportionately affect early-stage companies.

7. Regulatory Risk

  • •Changes in laws and regulations may adversely affect a company's business.
  • •Some businesses operate in heavily regulated industries (e.g., health, finance, food), and regulatory approval may be required, delayed, or denied.
  • •Regulation Crowdfunding rules may change in ways that affect your rights as an investor.

8. Platform Risk

  • •Seedling is a startup itself. If Seedling ceases operations, your investments in portfolio companies will continue to exist, but you may lose access to our investor services.
  • •Seedling does not guarantee the success of any campaign or company listed on our platform.
  • •Seedling does not provide ongoing monitoring of portfolio companies after campaigns close.

9. Tax Risks

  • •The tax treatment of startup investments can be complex. Consult a qualified tax advisor before investing.
  • •Gains from startup investments may be subject to capital gains tax.
  • •Loss of investment may or may not be deductible, depending on your tax situation.
  • •Investments held through certain structures (e.g., SPVs) may have additional tax complexities.

10. FDIC Disclaimer

  • •INVESTMENTS MADE THROUGH THIS PLATFORM ARE NOT BANK DEPOSITS.
  • •INVESTMENTS ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC).
  • •INVESTMENTS ARE NOT INSURED BY THE SECURITIES INVESTOR PROTECTION CORPORATION (SIPC) OR ANY GOVERNMENTAL AGENCY.
  • •YOU MAY LOSE YOUR ENTIRE INVESTMENT.
By investing through Seedling, you acknowledge that you have read, understood, and accepted these risk disclosures, and that you can bear the economic risk of losing your entire investment. These disclosures do not constitute legal or financial advice. Consider consulting a qualified financial advisor, attorney, or accountant before making any investment decision.