FAQ

Further information is available at Investor Resources.

Frequently Asked Questions

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 is a community of investors who can meet Issuers in its marketplace. Issuer Offerings are presented by Parinita’s partners, consisting of FINRA-regulated broker-dealers or funding portals. 

Parinita aims to have investors diversify their holdings to avoid putting “all their eggs in one basket.”

Parinita aims to have 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 is subject to deletion at Parinita’s discretion.

You can log in to the Platform to see investment Offerings. When you click on the “I Am Interested” button on an Offering page that interests you, you will be able to see all of the information available about the Offering. Once you decide to invest, click on the “Invest” button.

Because Parinita is not a registered broker-dealer or funding portal, it partners with registered broker-dealers and funding portals which are FINRA-regulated. Those partners present their respective Issuer Offerings on the Site where the Site’s community of investors can review them.

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).

Accreditation for investors all boils down to net worth, Accredited investors are individuals with a net worth greater than $1 million (excluding their primary residence) or an annual income exceeding $200,000 per year for two years ($300,000 if combined with a spouse). With crowdfunding, both accredited and non-accredited investors can invest.

Typically campaign length will be 90 days unless special circumstances require more time.

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 any dividends to their shareholders.

Investments in crowdfunding assets should be viewed as long-term and illiquid investments. Securities purchased in a crowdfunding transaction generally cannot be resold for a period of one year, except for certain limited circumstances.

This will be totally up to the Issuer. For some, every investor will have voting rights; for others, none of the investors will have voting rights. Some Issuers may elect to have different investment levels that will include voting rights.

No. Funds are handled by a third party agent.

An investor may cancel an investment commitment for any reason within 48 hours from the time of his or her investment commitment (or such later period as the Issuer may designate). After such 48 hour period, an investment commitment in most cases may not be cancelled.

Investors may also cancel their investment if any Material Change is made to the original terms. If there is a material change to the terms of an Offering or to the information provided by the Issuer, the intermediary must give or send to any investor who has made an investment commitment notice of the material change and that the investor’s investment commitment will be cancelled unless the investor reconfirms his or her investment commitment within five business days of receipt of the notice. If the investor fails to reconfirm his or her investment within those five business days, the intermediary within five business days thereafter must: (1) give or send the investor a notification disclosing that the commitment was cancelled, the reason for the cancellation and the refund amount that the investor is expected to receive; and (2) direct the refund of investor funds. Also if material changes to the Offering or to the information provided by the Issuer regarding the Offering occur within five business days of the maximum number of days that an Offering is to remain open, the Offering must be extended to allow for a period of five business days for the investor to reconfirm his or her investment.

It is very important for investors to consider whether investing in a security is appropriate for the investor. The Offering page should provide the necessary information for an investor to make an informed decision.

Issuers will pay us to use our Platform. They might pay us flat fees, and ongoing fees for marketing and Platform costs. They might also pay us for specified services we provide to them and reimburse us for expenses we incur on their behalf.

In some cases, an Issuer might pay us in whole or in part with its own Securities, e.g., with its own stock. This will always be the same class of Security that is being offered to investors on our Platform. For example, if the Issuer is Offering common stock to investors, only common stock could be used for our compensation.

After an Offering is complete, we might or might not have an ongoing relationship with the Issuer. The Issuer may decide to use our Platform to attract investors in the future, or use services provided by (and pay compensation to) us, or entities affiliated with us.

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.

 

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.

Risks

Many of the Securities listed on our Platform are speculative and involve significant risk, including the risk that you could lose some or all of your money. In Investor Resources (“GENERAL RISKS COMMON TO ISSUERS”), we describe two of the factors that make these investments risky:

  1. Many Offerings on our Platform are presented by startup or early-stage companies.
  2. There are risks associated with particular kinds of securities (e.g., debt securities or equity securities).

When you review a particular investment Offering, the Issuer will also provide a list of risks specific to that Offering.

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.

Your Consideration of Risks

  • It is very important to know and understand the inherent risks that are involved with crowdfunding. Here are a few things to consider.
  • 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 crowdfunded investments may take many years to materialize, or they may never materialize.