Human capital is an economic value of a personal skill set. The concept of human capital recognizes that not all the labor is equal and that the quality of personal skills can be improved by investing in them; the education, the experience and the natural abilities all have their economic value. We believe that people is the most valuable asset of any enterprise. The major difference from the enterprise model is that the capital is not bound to a particular project but for an entrepreneur (business owner). The growth criteria for identity capitalization and HCBA coincide with the criteria in traditional capital models, where the growth of the project's capitalization correlates with the total market value of the project's assets, it’s intrinsic value and investors belief in success.
2.1 Secured by personal reputation HCBA is build to monetize the value of personal brand, skills and track record. The lifetime of continuous success created by founding enterprises and other endeavours is translated and captured in the continous growth of personal asset. 2.2 Obligations to investors While personal track record provides a direct support for the market appreciation, we understand that hard money tied to a certain asset provide much better stability, clearer expectations and supported growth. That is why every HCBA has a number of built-in options for obligations model. That way investors and HCBA issuer can negotiate a mutually beneficial scheme of channeling direct material representation of one’s success to his or her supporters.
3.1 Crowdtraction Crowtraction model has been created to protect investors interest and to ensure a safe investment process which managed as a sequence of stages of unlocking raised funds for HCBA issuer. 3.2 Contribution reclaim It is a model of quarterly evaluation of the asset issuer’s progress during each of 10 consecutive quarters. The valuation is performed on the basis of the volume of contributions reclaim operations for the current quarter. A positive quarterly evaluation means a gradual (quarter-based) unlock of the raised funds. Contribution reclaim is a safety mechanism for HCBA holders. If investor is not confident in the future of his or her contribution and prefers to withdraw the funds before equal share of HCBA has been released to the external exchange, it could be done with contribution reclaim operation.
Return on the HCBA investment is driven by two major forces of the traditional stock market: market appreciation and obligations to investors. As the entrepreneur behind the HCBA reaches new results, validated by crowdtraction, value of his personal brand grows along with HCBA market price. Hence, by using intelligent analysis to pick the HCBA an investor can build a portfolio that will appreciate in value over time. Obligations to investors also play a major role in the HCBA value - future cash flows can be discounted to the present value and adjusted for growth to determine an intrinsic value of the HCBA.
In essence, the Identity Fund offers public liquidity for the private investments. After HCBA is traded on the internal exchange, there is an active market for the assets. Therefore any exchange participant is able to liquidate his holdings at any given time by selling HCBA to the broader market.
Investing on Identity Fund is free for investors. Identity Fund collects from the founders 3.99% of the total amount raised and 0.2% of any exchange transaction. The 3.99% of the total amount raised comes out of the proceeds of the offering. Founders raising on Identity Fund may also use the proceeds of their successful financing to pay for the escrow agent and other transaction-related fees.
Unicorns are less than 1% of all the startups that reach the valuation of over $1B. It is hard to find and invest in such one at an early stage, but you could earn a significant return on early stage investment. While no one can predict which founders will become next stars and their startups unicorns, Identity Fund gives you access to founders who have the potential to become one. Crowdinvesting or equity crowdfunding is not new, but until recently, “crowdfunding” in the U.S. meant buying a product or donating money. Separately, only wealthy people were allowed to invest in early stage private ventures. Because of Identity Fund and newly adopted laws, you can now be an angel investor in founders behind any startups, no matter who you are or where you live. The law requires that before you invest, you first understand the risks and the rules of investing. What do I get when I invest When you invest on Identity Fund you receive a financial stake in founder's HCBA in the form of a security. In addition, some founders may to give out perks as a reward for your investment. Founders investing can be fulfilling beyond the potential monetary return. Not only are you joining founders on their exciting journey, you’re betting on a founder’s future and gaining a chance to aid in their success. How do I get a return Founders investing is risky and there are no guarantees of a return: many founders fail, and investments are lost. But some founders will succeed, and if they get acquired or IPO at a valuation higher than the one at the time of your investment, you will earn a return.
Invest long term Set realistic expectations: even investments in founders that later succeed will not return your money for years, if at all. Never invest more than you’re comfortable losing. Diversify Spread your investments across multiple founders to diversify financial risk. Remember, that diversification is not a guarantee of profit and cannot protect against losses. Diversification involves investing in many types of investments. Do your own research All founders that list on Identity Fund to be register their fundraise through SEC. Learn about the founder through other public sources. The information on the deal page is submitted by founders and Identity Fund is not responsible for factually verifying this information. Identity Fund does not and cannot recommend or endorse any founder or offering. Review the deal terms Review the terms of each deal carefully, including rights associated with the offered HCBA securities. Invest in founders you love Invest in a founders because you love their mission, product or service, not just for potential profit or return.
Identity Fund gives you access to a new and vast pool of capital. Raise funds from your network, community, customers, partners and millions of retail investors around the world. Equity crowdfunding allows you to market and grow your business and get paid to do it. 1. Align your financial interests with your customers' 2. Demonstrate that people believe in your mission 3. Create a large group of loyal brand ambassadors 4. Get exposure. Our founders will be seen by millions
The SEC limits to raising $1,070,000 via Title III equity crowdfunding per rolling 12 month period. Identity Fund has a limit $1,000,000 per rolling 12 month period campaign.
How much can I invest? How much you can invest in any 12-month period depends on a combination of your net worth (less the value of your primary residence if you own a home) and your annual income. Note: You don't have to make these calculations yourself. Your limit is automatically calculated when you become an investor. If either your annual income or your net worth is less than $107,000, you can invest up to the greater of either $2,200 or 5% of the lesser of your annual income or net worth during any 12-month period. If both your annual income and your net worth are equal to or more than $107,000, you can invest up to 10% of annual income or net worth—whichever is lesser up to a maximum of $107,000 during any 12-month period. Reminder: This is your annual limit for all Title III investments—not just those on Identity Fund. See more examples in the SEC Investor Bulletin. What is the minimum investment amount? There is no minimum investment amount to HCBAs.
You’re allowed to sell your stake in a crowdfunding investment starting one year after your investment is provided to you, and earlier under some circumstances. However, there’s no guarantee that someone will be willing to buy it at that point.
You can cancel an Identity Fund investment and receive a refund up until 48 hours before the campaign deadline, after which point your investment is final. Identity Fund considers reducing your investment commitment to be equivalent to cancelling your investment and making a new one, this means you cannot reduce your investment commitment during the final 48 hours of a campaign, subject to each issuing company's discretion.
Some of the key risks to know before you invest in startups: Crowdfunding investments are highly risky and speculative. You should do your own research and scrutinize all disclosed risk factors before making an investment decision. The following are some of the key risks applicable to Republic offerings: Speculative. Investments in founders, startups and early-stage ventures are speculative and these enterprises often fail. Unlike an investment in a mature business where there is a track record of revenue and income, the success of a startup or early-stage venture often relies on the development of a new product or service that may or may not find a market. You should be prepared to lose your entire investment. Illiquidity. Your ability to resell your investment in the first year will be restricted with narrow exceptions. You may need to hold your investment for an indefinite period of time. Unlike investing in companies listed on a stock exchange where you can quickly and easily trade securities, you may have to locate an interested private buyer when you do seek to resell your crowdfunded investment. Cancellation restrictions. Once you make an investment in a crowdfunding offering, you can cancel the investment at any time and for any reason up to 48 hours before the offering deadline. Valuation and capitalization. Unlike listed companies that are valued publicly through market-driven stock prices, the valuation of private HCBA, companies, especially startups, is difficult. You risk overpaying for the equity stake you receive. The class of equity being sold via a crowdfunding offering may have fewer rights than other equity classes issued by a company. Limited disclosure. The company must disclose information about itself, its business plan, the offering, and its anticipated use of proceeds, among other things. A founders may be able to provide only limited information about its business plan and operations because it does not have fully developed operations or a long history to provide more disclosure. The company is also only obligated to file information regarding its business annually, including financial statements. Investment in personnel. An early-stage investment is also an investment in the founding entrepreneur(s) and/or management of the company. Being able to execute on the business plan is often an important factor determining whether the business will be viable and successful. You should also be aware that a portion of your investment may fund the compensation of the company’s employees, including its management. You should carefully review any disclosure regarding the company’s use of proceeds. Possibility of fraud. As with other investments, there is no guarantee that crowdfunding investments will be immune from fraud. Lack of professional guidance. Many successful founders partially attribute their early success to the guidance of professional early-stage investors (e.g. angel investors and venture capital firms). These investors often negotiate for seats on the company’s board of directors and play an important role through their resources, contacts and experience in assisting early-stage companies in executing on their business plans. An early-stage company primarily financed through crowdfunding may not have the benefit of such professional investors.
You get an agreement, which is a security that gives you a financial interest in the founder you invested in. Some campaigns also offer perks (e.g. a pre-order of their product) for particular investment amounts.
There is no rules or restrictions regarding communications relating to your crowdfunding investment. After you invest in the founder, he or she can message your via 3rd party applications using your public social network contacts. On Identity Fund, public communications can happen on the discussion section of each campaign or in the comments to the founder's public updates.
Founders that have successfully raised on Identity Fund are required to publish a quarter update on profile within next 28 days after the end of the quarter. Please note, that Identity Fund can not be held responsible if the company fails to publish an quarter report. Separately, we encourage founders to post regular investor updates on Identity Fund, but they are not required to do so by law.
Anyone 18 years or older can invest. Each founder on Identity Fund decides what other requirements there are to invest in each unique campaign; please refer to each founder's deal page for details on who can invest. Please note, there are limits to how much you can invest based on your income. Net worth and any other investments you've made in Title III/Regulated Crowdfunding offerings.