As we said in previous occasions, at Fellow Funders we would like to make investing in startups closer to individual investors from a professional point of view and following high-quality standards used by the big investors. Today, we are going to talk about two basic aspects: who can invest in Fellow Funders and what types of investors may be.
This sector is regulated by the Law 5/2015 on Promoting Business Financing (Ley de Fomento de la Financiación Empresarial); one of its greatest purpose is to protect the investor. In accordance with this law, any EU natural or legal national, on their legal age and with a European bank account can invest in a Participatory Financing Platform (PFP). If the natural or legal person is not an EU national, they must have the Foreigners Identification Number (NIE in Spanish) in force.
Types of investors
The law differentiates between two types of investors: Accredited Investors and Non-Accredited Investors. This distinction in the law is a protection mechanism for investors with lower purchasing power.
- Natural Person: must comply with at least one out of these two requirements:
- To have earned an annual income higher than 50,000 euros in the last 12 months or to have a financial capital higher than 100,000 euros. You request to be considered as an accredited investor in advance, expressly waiving your treatment as a non-accredited one.
- To accredit the contracting of the financial advisory service on the platform’s financing instruments by an authorized investment services company.
- Legal person: must comply with at least two out of these three requirements:
- To have a total asset equal or higher than 1 million euros.
- The amount of your annual business figure is equal or higher than 2 million euros.
- Your own resources are equal or higher than 300,000 euros.
All other investors who do not meet the above conditions are considered non-accredited investors.
What is the difference between an Accredited Investor and a Non-Accredited Investor? Accredited investors have no investment limit. While non-accredited investors are limited to 3,000 euros per project and a total of 10,000 euros in the last 12 months.
Fellow Funders is listening to you
In response to requests from some of our investors in FELLOW FUNDERS, we have decided to implement a series of changes in our platform that we will be revealing in the near future.
The first change we have incorporated in FELLOWFUNDERS.ES is the possibility to make INVESTMENT RESERVATIONS.
From now on, when an investor wishes to invest in a project, they can do it as always by effectively transferring the funds by transfer or credit card to your escrow account (unavailable except for use at the time of subscription of the new shares) or you can make an Investment Reservation.
This Investment Reservation gives you the privileged right to invest in the company’s shares without having to make any prior disbursement. When the total investment in a project reaches a minimum of 75%, the investor will receive an email and within a maximum period of 72 hours must transfer the funds by bank transfer. If this transfer is not made, the investor will lose their preferential acquisition right and their Investment Reserve will be cancelled.
We hope users and investors like our new investment possibility in our platform. We will include other functionalities soon.
Remember that, if you wish to invest in Equity Crowdfunding through Fellow funders, you can do it for free if you are a registered investor in our website. The process starts by signing up as user and then requesting to be investor. The only thing you will be asked to do is to send an ID card photocopy. So, if you are not registered yet, click here.
Next week, we will talk about the profitability expected from the investments in the projects included in our platform.