Further information is available at Investor Resources.
Frequently Asked Questions
Is TheInvestorHQ.com a funding portal?
No. TheInvestorHQ.com is owned by Parinita Technologies and Consultancy LLC (“Parinita”). TheInvestorHQ is not a funding portal, and Parinita is not FINRA-regulated. Instead, TheInvestorHQ.com serves as a community of investors who can connect with issuers through its marketplace. Issuer Offerings are presented by Parinita’s partners, which include FINRA-regulated broker-dealers or funding portals.
Why can I invest only $1,000-$5,000 per Offering?
TheInvestorHQ encourages investors to diversify their portfolios, helping them avoid the risk of putting “all their eggs in one basket.”
What happens if I do not invest at least $10,000 annually on Offerings?
TheInvestorHQ aims to maintain an active community of investors. If you have no active investments on the platform and have not invested at least $10,000 annually, your account may be subject to deletion at our discretion.
How do I get more information on an Offering?
You can log in to the platform to view investment Offerings. When you find an Offering that interests you, click the “I Am Interested” button on its page to access all available information about the Offering. Once you decide to invest, simply click the “Invest” button.
Are there any terms that might help me with my review of an Offering?
Background Terms
Learning about this industry without any prior experience can be a daunting task and little bit overwhelming if you are not too familiar with the investing world. Here are some key terms that will help you along in this process.
Account Receivables
Legally enforceable claims for payment held by a business for goods supplied and or services rendered that customers/clients have ordered but have not paid for
Accredited Investor
A person or entity who is allowed to deal, trade and invest in financial securities as long as they satisfy one (or more) requirements regarding income, net worth, asset size, governance status or professional experience.
Articles of Incorporation
Articles of incorporation is the document that establishes a corporation as a separate business entity.
Board of Directors
A team of people elected by a corporations shareholders to represent the shareholders’ interests and ensure that the company’s management acts on their behalf.
Burn Rate
A rate at which an enterprise spends money, especially venture capital, in excess of income.
Cap Table
A capitalization table is a table providing an analysis of a company’s percentage of ownership, equity dilution and value equity in each round of investment by founders, investors and other owners.
Who are Parinita’s partners and how do they present Issuer Offerings?
Because TheInvestorHQ is not a registered broker-dealer or funding portal, it partners with registered broker-dealers and funding portals that are FINRA-regulated. These partners present their respective issuer Offerings on the site, allowing the site’s community of investors to review them.
What are the risks/disadvantages involved with each of the securities offered?
Risks
- Many Offerings on our Platform are presented by startup or early-stage companies.
- There are risks associated with particular kinds of securities (e.g., debt securities or equity securities).
Other general risks to consider include:
- You should only invest an amount you are comfortable losing, as many startup businesses fail.
- It is very difficult and even impossible in most cases to sell your shares when investing in private companies.
- Investments made in a Title III crowdfunding transaction cannot be resold for a period of one year and there may be some other restrictions on the resale of the securities.
- Purchasers of the securities offered likely will not be entitled to voting rights, such that they will not be able to exert influence in the affairs of the company.
- Future equity financings may dilute their ownership percentage in the Issuer. (The value of your investment may be diluted if more shares are issued and many start-up businesses undergo multiple rounds of funding.)
- If you invest in shares in a business, there will be no guarantee that income in the form of dividends will be paid.
- Return on investments may take many years to materialize, or they may never materialize.
Common Stock
Common Stockholders are on the bottom of the priority ladder for ownership structure; in the event of liquidation, common shareholders have rights to a company’s assets only after bondholders, preferred shareholders and other debtholders are paid in full.
Convertible Notes
There are several disadvantages for investors when it comes to convertible notes. It can be difficult for investors to establish whether the terms of a particular note Offering are fair pre-valuation. Convertible noteholders usually cannot take advantage of the long-term capital gains treatment available to stockholders until the time of the note’s conversion. Convertible noteholders are often at the mercy of others, with little power to sway the outcome of their investments (at least until the conversion event). Often, the valuation of a noteholder’s investment will be determined by future investors who may negotiate a valuation with which the noteholder does not agree. If convertible notes are uncapped, the interests of the Issuer and the noteholders are not aligned when it comes to this valuation, as Issuers want the valuation to be as high as possible, while noteholders want the opposite.
Membership Units
Unlike corporations, limited liability companies (LLCs) do not and cannot have shares. LLCs are owned by one or more members. LLC members can be people or other business entities. Each member owns a membership interest in the LLC expressed as a percentage or units of membership.
In sum, although LLCs cannot issue shares, they can create ownership structures that parallel to those used by corporations and have a fair degree of flexibility in creating the structure.
A general risk involved with these securities is there may be limited (if any) voting power due to dilution. (Dilution, or Equity Dilution, is the decrease in existing shareholders’ ownership percentage of a company because the company issues new equity. New equity increases the total shares outstanding which has a dilutive effect on the ownership percentage of existing shareholders).
What is the difference between accredited and non-accredited investors?
Investor accreditation primarily depends on net worth. Accredited investors are individuals with a net worth exceeding $1 million (excluding their primary residence) or an annual income of over $200,000 per year for the past two years ($300,000 if combined with a spouse). Crowdfunding allows both accredited and non-accredited investors to participate.
How long will Offering campaigns run?
Typically, the campaign length will be 90 days unless special circumstances require an extended duration.
Are dividends paid out to investors?
Dividends are payments made by a business to its shareholders from the company’s profits and are not guaranteed. Most issuers Offering equity on our platform are startups or early-stage companies, which will rarely pay dividends to their investors. Profits, if any, are typically reinvested into the business to fuel growth and build shareholder value. Even if there are profits, issuers are under no obligation to pay dividends to their shareholders.
Can an investor resale their shares?
Investments in crowdfunding assets should be considered long-term and illiquid. Securities purchased through crowdfunding generally cannot be resold for a period of one year, except under certain limited circumstances.
Will investors have voting rights?
This decision will be entirely up to the Issuer. Some Issuers may grant voting rights to every investor, while others may choose not to offer voting rights at all. Additionally, some Issuers might have different investment levels that include voting rights.
Does Parinita hold, handle, manage or possess investor funds or securities?
No. Funds are handled by a third party escrow service provider
What are the circumstances in which an investment commitment may be cancelled by the Issuer?
An investor may cancel an investment commitment for any reason within 48 hours from the time of their investment commitment (or a later period designated by the Issuer). After this 48-hour period, investment commitments generally cannot be canceled.
However, investors can cancel their investment if any material changes are made to the original terms. If there is a material change to the terms of an Offering or the information provided by the Issuer, the intermediary must notify any investor who has made an investment commitment. The notice will inform the investor that their investment commitment will be canceled unless they reconfirm their investment within five business days of receiving the notice. If the investor fails to reconfirm within those five business days, the intermediary must:
- Notify the investor that the commitment was canceled, explaining the reason for the cancellation and the expected refund amount.
- Direct the refund of investor funds.
Additionally, if material changes to the Offering or the information provided by the Issuer occur within five business days of the Offering’s closing date, the Offering must be extended to allow for a five-business-day period for the investor to reconfirm their investment.
Is it important to consider whether investing in a security is appropriate for the investor?
It is crucial for investors to determine whether investing in a particular security is suitable for them. The Offering page provides the essential information needed for investors to make informed decisions.
What is Parinita’s relationship with the Issuers?
Issuers will pay us to use our platform through various fee structures, including flat fees and ongoing fees for marketing and platform costs. They may also pay for specific services we provide and reimburse us for expenses incurred on their behalf.
In some cases, an Issuer might compensate us partially or entirely with its own securities, such as its own stock. This compensation will always be in the same class of security offered to investors on our platform. For instance, if the Issuer offers common stock to investors, our compensation would also be in common stock.
After an Offering is complete, we may or may not maintain an ongoing relationship with the Issuer. The Issuer might choose to use our platform for future investor outreach or utilize services provided by us or our affiliates, thereby continuing to pay compensation for these services.
Issuer Requirements
How We Screen Issuers
Parinita subjects all Issuers who it permits on its Platform to a legal and financial due diligence process. However, all Offerings remain risky and Parinita makes no representations that the Issuers’ Offerings, or investors’ funds, will be secure. By investing through this Platform, investors acknowledge investment Offerings are speculative, illiquid and involve a high degree of risk, including the risk of loss of your entire investment.
We deny access to the Platform to any Issuer if:
- We have a “reasonable basis” for believing an Issuer or any of its officers, directors, or beneficial owner of 20% or more of its outstanding voting securities is subject to disqualification under the rules discussed under “Disqualification of Issuers” below. We do not rely solely on the Issuer’s representations to form this “reasonable belief,” but conduct background checks with third parties.
- We have a “reasonable basis” for believing an Issuer or the Offering presents the potential for fraud or otherwise raises concerns about investor protection, or we cannot effectively assess the risk.
Nevertheless, we cannot conclude Offerings on our Platform represent good investments for investors. You have to make those decisions on your own.
Promoters Disclosure
An Issuer (and/or its representatives) might hire a public relations firm or other third party to promote the Issuer’s Offering on the Platform – for example, by talking about the Offering in our discussion forums.
Such persons doing the promoting must identify themselves on the Platform and disclose that they are engaged in promotional activity. In the case of a third party, the third party must also disclose that it is being paid for its promotional activity.
Investor Process Breakdown
Process Breakdown for investors
Now that you have made it to the Platform, here is what follows:
First, read through the Offering page and, more importantly, the Offer details (pre-money valuation, securities type, funding goal, minimum investment, amount per share, number of investors already committed, amount currently raised).
Once you have done all of your due diligence, you select the “Invest” button and you are sent to a contract page. Here you will input your financial information for the purchase of shares.
Once the shares are purchased, you will receive an email confirmation of the Investment Commitment. The investor will also be able to see this purchase listed in the “My Portfolio” section.
Once the funds are transferred into an escrow account, the investor will receive an email confirmation to acknowledge the funds have been received.
Investors will then begin receiving email updates and milestone notifications about the campaign as well as updates about the Issuer and/or its Offering.
