This is a new type of investment project where investors can help Borrowers realise new business ideas or launch new products by investing their money in return for a share in the company when launched instead of loan interest. Investments can start from as low as €1000.
An important difference in this type of investment project is that each investor will receive a share in the company as well as regular income from their investment in the form of dividends.
A share is a percentage of ownership in a company. Investors who hold shares in a company are known as shareholders. So, if you own shares, you own a little bit of the company and therefore benefit from a proportion of the company's profits. And when you sell your shares you can gain if the value of the company has risen.
Shareholders are paid dividends by the company which is a share of the company’s profits.
Privately-owned companies may have only one or several shareholders and are often owned by the founders or partners of the business. Whereas, other companies issue shares that can be traded on stock exchanges and are known as publicly-traded companies.
Companies issue shares to raise capital and use it to grow and operate their business. Capital raised in this way is different from money obtained by borrowing from a bank as the company issuing the share has no obligation to repay investors. Shares may pay dividends as an allocation of profits, but they do not normally pay interest.
As companies grow, shares are sold to outside investors in the primary market. These may include friends and family, or angel and venture investors. When a company grows really successfully, it may need to raise more capital and can sell shares to the public on the secondary market by an initial share offering, or IPO. The company's shares are known as publicly traded following an IPO and become listed on a stock exchange.
Thus, with our new investment program, you can become one of the first co-owners of the most fast-growing disruptive companies.
How does it work?
1. Investors put their funds into one of the convertible projects (Share Finance) on the TFGcrowd platform. Here TFGcrowd proposes exciting investment opportunities for investors of all levels to participate in and benefit from the potential gains and regular dividends generated by the Share Finance projects.
2. TFGcrowd aggregates and transfers the funds collected to a Borrower.
3. The Borrower uses the funds to build the business and issues shares that TFGcrowd nominee will hold in a year.
4. TFGcrowd nominee pays out dividends, or a portion of the profits made by the Borrowers, to investors proportionate to the number of shares owned by the investor.
How you can benefit from this type of investment?
In one year, all investors receive their shares in the company which gives the following options:
1. Sell the shares back to the company on the secondary market at an agreed price. (ideally higher than the purchase price).
2. Continue receiving dividends from the company shares they own, the amount of which is determined by the profits the company decides to distribute to its shareholders each year.
3. If the company is being sold the investors are entitled to a share of the profit (for example, you bought shares worth €100, after 3 years the company’s shares are worth €300, giving you a profit of €200 per share).