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“Bulletin Board” or “Secondary Market”

a section on the Platform that provides a possibility for the Investor to advertise his/her/its interest in buying and/or selling shares/stocks of the Project Owner’s company that had a successful Offer on the Platform.

“Client”

a Prospective Investor, Investor or Project Owner.

“CrowdedHero”, “we”, “us” or “our”

SIA “CrowdedHero Latvia”, registration number: 50203309441, registered address: 58A – 8 Bauskas Street, Riga, LV-1004, Latvia.

“ECSPR”

Regulation (EU) 2020/1503 of the European Parliament and of the Council of 7 October 2020 on European crowdfunding service providers for business, and amending Regulation (EU) 2017/1129 and Directive (EU) 2019/1937 (Text with EEA relevance), PE/37/2020/INIT, OJ L 347, 20.10.2020, p. 1–49.

“Investor Classification Policy”

our Investor Classification Policy concerning the Services available on the Platform as may be amended from time to time.

“Investor”

a natural or legal person who acts as an investor, meets all the eligibility requirements set in CrowdedHero’s Terms and Conditions, opens and holds a Payments Account, thereby agreeing with Lemonway’s Terms and Conditions, and through the Platform makes investments.

“Knowledge Test”

a test intended to assess the knowledge, skills and experience of an Investor classified as the Non-Sophisticated Investor by assessing:

[a] whether the Investor has the necessary experience and knowledge required to understand the risks involved in investing in general; and

[b] whether the Investor has the necessary experience and knowledge to understand the risks involved in the types of investments offered on the Platform.

“Non-Sophisticated Investor”

an Investor who is not a Sophisticated Investor and is classified as the Non-Sophisticated Investor according to Investor Classification Policy.

“Platform”

a publicly accessible internet-based information system that is branded as ‘CrowdedHero’, available via the Website and operated or managed by CrowdedHero.

“Project Owner”

a legal person who seeks funding through the Platform by way of the Offer and is directly responsible for the information to be included in the key investment information sheet.

“Project”

a business activity or activities for which the Project Owner seeks funding through the Platform.

“Prospective Investor”

an Investor who is willing to express his/her/its interest to invest in an Offer.

“Risk Warning”

CrowdedHero’s Risk Warning concerning the Services available on the Platform, as may be amended from time to time.

“Services”

the matching of business funding interests of Investors and Project Owners through the use of the Platform by CrowdedHero providing the services that enable:

[a] Offers to raise funds;

[b] Investors to invest in the Offers;

[c] advertising interest in buying and selling shares/stocks of a Project Owner’s company that had a successful Offer on the Platform.

“Simulation”

a tool available on the Platform intended to assess the financial situation of the Investors classified as the Non-Sophisticated Investors and enabling such Investors to simulate their ability to bear the loss.

“Sophisticated Investor”

an Investor who is classified as the Sophisticated Investor according to our Investor Classification Policy.

“Website”

the website branded as ‘CrowdedHero’ and referring to the domain https://www.crowdedhero.com/.

GENERAL RISKS

Loss of investment

You may lose the entire, or part, of your investment. If a Project you invest in fails, the Project Owner or CrowdedHero will not pay you back your investment. The Projects available through the Platform include an opportunity to invest in early-stage companies as well as companies with a proven track record. Even though we have in place the policies and procedures designed to ensure that the Projects are selected in a professional, fair and transparent way by us and we are carrying out a thorough evaluation and due diligence of each Project by assessing whether the Project meets the criteria set by us prior to publishing it on the Platform the risk to business failure is still high. If a Project does become profitable, it is not guaranteed that your initial investment will be returned, or you will receive a return on your investment.

Risk of dilution

Any investment you make through Platform represents a direct or indirect share of the total capital of the Project Owner’s company. Your investment may be subject to dilution in the future as the Project Owners’ company may need to make further capital increases. This means that if the Project Owner raises additional capital at a later round, it will issue new shares to the new Investors, and the percentage of the business that you own will decline. These new shares may also entitle the new shareholders with preferential rights (such as preferential rights to dividends, special voting rights, pre-emption rights or rights in relation to other Project matters), and the exercise of these rights may work to your disadvantage. Please check the Offer and the Articles of Association of the Project Owner’s company to see if the shares you are buying will have these pre-emption rights.

Rarity of dividends

Dividends are payments made by a company’s (i.e., Project Owner) profit to a person (i.e., an Investor) who has become a shareholder of this company. Most of the Project Owners raising funds through, or published on, the Platform are early-stage, small- or medium-size companies. Therefore, if there is a profit, it is rarely distributed as dividends but is reinvested in the company to continue its development. This means that you are unlikely to see a return on your investment until [a] the Project Owner’s company generates profit, [b] distributes dividends or [c] you are able to sell your shares.

Development fluctuations

The target profitability and the information regarding each Project are mere business plans. As such, they may suffer fluctuations in their development and obtain returns different from those expected in the beginning or during the development of operations due to market events, political events, macroeconomic changes (such as inflation risk) or social circumstances, including changes in the applicable law.

Legal and tax differences

Legal risk arises from the fact that the legislative acts regulating state supervision, the asset, ownership, investment activities or taxation of earned income may change during the investment period and influence your investment and the outcome of your investment.

Please note that we do not provide legal or tax services. We recommend that you seek independent and professional legal or tax advice both before and after investing to comply with the effective applicable law.

Hypothetical valuation

Projections presented in the documents accompanying the Offer and Project prepared by the Project Owners and published on our Platform may be based on hypothetical data gathered on the date of preparation of such documents. Please note that any and all estimates and assumptions are subject to significant economic, business, and other uncertainties beyond the control of the Project Owner or CrowdedHero. Although such assumptions are believed to be realistic, the Project Owner or CrowdedHero makes no representations or warranties that the Project Owner will, or likely to, achieve projections similar to those presented as hypothetical performance is not necessarily indicative of future results.

Currency risks

All Offers placed on CrowdedHero are denominated in Euros. When initially converting a foreign currency for the sake of placing an investment via the Platform in Euros, there is a risk that you may suffer losses due to unfavourable changes in currency exchange rates.

PROJECT RELATED RISKS

Please note that information related to the risks of the Project is disclosed by each Project Owner in the KIIS. Prior to placing an investment in a particular Project, we strongly recommend you to carry out a subjective analysis of the Project and its KIIS.

Project default risk

Those are risks that are inherent to the Project and that may cause the Project to fail. These risks may concern but are not limited to project dependencies, such as funding, legal, licensing, copyrights, the occurrence of adverse scenarios with a negative impact, (technological) development of competitors or competitive products, or risks deriving from the Project Owner.

Sector risk

Those are risks that are inherent to the specific sector of the Project. Such risks may be caused, for instance, by a change in the macroeconomic circumstances, a decrease of demand in the sector in which the Project Owner operates and dependencies on other sectors.

Risk of default

The Project or the Project Owner may be subject to bankruptcy or other insolvency proceedings, and other occurrences concerning the Project or the Project Owner which may result in the loss of the investment for the Investors. Such risks may be caused by a variety of factors, including but not limited to: (severe) change in macroeconomic circumstances, mismanagement, lack of experience, the financing not fitting the business purpose, unsuccessful product launch, lack of cash flow.

Risk of lower or delayed returns

There is a risk that the return from the investment is lower than expected or that the Project defaults on capital or interest payments. This means that you should not relay on receiving stable returns from your investment.

Risk of illiquidity

Almost all investments you will make through the Platform will be highly illiquid. This means you should assume that buying shares in illiquid companies cannot be sold easily.

Early call risk

The Project Owner has the right to repay you your investment at any time prior to the formal repayment date. Your investment may be materially curtailed because of this.

Unsecured investment

Equity investments are typically an unsecured obligation, meaning there is no security over the property or assets of the Project supporting the repayment of your interest or capital. This means that if a Project fails, it is unlikely that you will have your initial investment or outstanding interest payments returned since there is no security over any remaining assets.

No assurance that the financial information from the Project Owners will be accurate or accessible

The financial statements of the Project in which you invest may not be subject to a statutory audit. As such, the financial information presented to you may not have been ascertained or reviewed by a qualified auditor. The financial statements of the Project also may not be made accessible to you in the absence of requirements in their home country for them to do so. In addition, the information made public by a Project Owner may also be general in nature and may not have been verified by any independent parties.

No assurance that the information provided in the KIIS by Project Owners will be complete, correct and clear

The Project Owners are required to draw up a KIIS and notify us of any change of information provided in the KIIS so that the KIIS is updated at all times and for the duration of the Offer. We will be also informing the Investors who have made an investment in the Project about any material change to the information in the KIIS that was notified to us. However, please note, that we will be able to do so only if the Project Owner notifies of any changes of information provided in the KIIS.

Although we have in place and we are applying adequate procedures to verify the completeness, correctness and clarity of the information contained in the KIIS, there may be a situation that there is an omission, mistake or inaccuracy in the information provided in the KIIS that may have a material impact on the expected return of the investment. If we will detect such an omission, mistake or inaccuracy we will be reaching out to the Project Owner and require it to promptly complete or correct that information. We will be also informing the Investors who have made an investment in the Project about the steps taken and further to be taken by us and the option to revoke their investments made in the Project.

SERVICES RELATED RISKS

Platform risk

We have in place a sound and prudent management and business continuity plan and financial projection carried out to ensure successful and sustainable operations of the Platform and provision of our Services. In the unlikely case of CrowdedHero going out of business, the team grants its full collaboration with third parties and appointed representatives, to ensure smooth exit and minimized losses for the Clients affected. In order to mitigate the risk, we advise you to diversify your investments across various asset classes, as well as several crowdfunding marketplaces.

Outsourced service providers

To ensure the efficient and smooth provision of the Services, we have entrusted some of our operational functions, in whole or in part, to a third party, for example, provision of the payment services to an authorized payment service provider. Although we have done our reasonably best to ensure that the outsourced arrangements do not impair the quality of the Services, we cannot assure that they will be available to us at all times and thus our Services will not be impacted. Payment services provided by third party(ies) (financial institutions or associations or other payment service providers) are not a part of the Services.

Risk of the failure of the Services

There is a risk that we may be temporarily or permanently not able to provide the Services. The Services are provided “as is” and “as available”. We make no representations or warranties of any kind, whether express, implied, statutory or otherwise about the Services, including, without limitation, any warranty that our Services will be uninterrupted, error-free or free of harmful components, or that any information and data, including your data, will be secure or not otherwise lost or damaged.

Secondary Market

If you use Bulletin Board, please keep in mind that any buying and selling activity on Bulletin Board is at the Investor's discretion and responsibility. Bulletin Board does not provide you with a market to buy and sell the shares/stocks in which you have invested, and you should be aware that when you invest you may not be able to sell your investment. Although we allow you and other Investors to interact directly with each other to advertise interest in buying and selling investments, the Bulletin Board is not used to bring together buying and selling interests through the Platform's protocols or internal operating procedures in a way that results in a contract. The Bulletin board is also not an internal matchmaking system that executes your orders on a multilateral basis. We do not have a trading system. We do not guarantee that your shares will be sold thanks to Bulletin Board for a fair price and that you will receive a return on your investment.