Frequently Asked Questions

General Questions

Companisto enables equity-based crowdfunding for start-ups. Equity-based crowdfunding means that many people team up to invest in a young company (start-up) collectively. None of them could participate on their own because several thousand euros are necessary for this.

Together, the investors – referred to as Companists – can participate in a company with an investment amount of their choice and thus raise the required funds. In return for their investment, the Companists receive a share of the profit and, most importantly, of the value of the start-up.

In addition, the Companists' equity-based crowdfunding does some good in that it supports innovation, creativity, and economic growth in Germany, which in turn facilitates the creation of new jobs.

Crowdfunding and equity-based crowdfunding are related to each other, but they differ from one another in some fundamental aspects. A common aspect of crowdfunding and equity-based crowdfunding is that a large number of people make a financial contribution to a start-up.

Crowdfunding originates from the world of arts and is often used to finance music CDs or films. In the case of crowdfunding, the contributor usually only receives a symbolic reward, for instance a CD or a photo.

In the case of equity-based crowdfunding, on the other hand, contributors make a true investment. In other words, they receive a share of the start-up in return for their investment and thus participate in the profits and exit proceeds (if the company is sold).

We refer to the users of Companisto as Companists. Companists are all those people who participate in promising start-ups by means of equity-based crowdfunding and who wish to track the development of the company on the platform. Everyone can invest on Companisto; the only requirement is that users must be adults.

Companisto is a recent coinage, which is derived from the terms "company" and "companions." It hints at the cooperation of companies and their supporters (Companists) that exists in the case of equity-based crowdfunding and crowdfunding for start-ups.

Questions by Investors

Companists benefit from their share in a start-up in several ways:

First, Companists are entitled to a share of the start-up's profits. These are paid out once a year.

However, since start-ups often reinvest their profits in order to achieve rapid corporate growth in the first few years, Companists are also entitled to a share of the exit proceeds, i.e., if the start-up is sold to a large investor.

If a start-up is not sold during the holding period, a business valuation takes place at the end of this period, and the Companists are paid out according to their share in the start-up.

It is free to sign up on Companisto and to use the platform.

Companists do not pay any fees for their investment either. Therefore, the entire payment of a Companist is used for the investment; there are no deductions.

Companisto only benefits if Companists earn profits from their investment. We win if you win. Companisto receives a strictly success-based commission on the profits from the share, which amounts to ten percent of the amount paid to the Companist. This commission only comes into effect when the profits from the share are actually paid out to the Companist. Thus, the interests of Companisto and of the Companists are the same, which ensures that Companisto will always do its best.

All adults may invest on Companisto. There is no minimum investment, for the idea behind Companisto is that everyone should be able to participate in innovative companies by means of equity-based crowdfunding.

Indeed, this very idea of participation is also the underlying idea of crowdfunding for start-ups and of equity-based crowdfunding.

There is no minimum investment amount on Companisto. Consequently, it is possible to participate in a equity-based crowdfunding round and invest in a start-up starting with as little as 5 euros.

Investments in start-ups offer great opportunities, but they are risk investments. In the worst case, the entire investment amount may be lost. However, Companists are under no obligation to make further contributions to an ailing start-up.

Companists can minimize the risk if they split their investment amount between several start-ups rather than invest everything in a single start-up. Professional investors often follow this strategy because it causes the risk to be spread among several investments. In this way, successful investments can balance out other less successful investments.

The shares of the Companists are subordinated profit-participating loans ("partiarische Nachrangdarlehen" in German). Such loans are shares in a business with similar characteristics as equity. If the start-up becomes insolvent, the Companists' claims will be satisfied from the assets in the insolvency only after the claims of all other external creditors have been satisfied.

On Companisto, investments in a start-up are processed completely electronically on the platform, and they only take a few minutes. The mailing of documents is not necessary; all documents are sent electronically.

Yes, that is no problem at all. We offer several methods of payment that are available internationally, e.g., credit card payment, instant money transfer, and bank transfer (advance payment).

Yes, that is possible. You can select on the order page whether you wish to invest as a private investor or as a corporate investor.

Yes. It is possible to use an alias for investments. If an alias is selected, this alias is displayed in the list of investors. In this case, only the start-up and Companisto can see the real name of the Companist in their documents.

In order to select an alias, log in as a Companist first and then click on "My Account" in the upper right part of the menu. Afterward, select the "Settings" tab, where you can choose an alias.

Companists participate in the start-ups in the form of a subordinated profit-participating loan.

This means that the Companists lend the investment amount to the start-up for the duration of their participation. In return, the start-ups share their profits and the possible sales proceeds if the start-up is sold (also called "exit") with the Companists. The share of the profits and of the exit proceeds are paid in the form of interest.

If participation ends at the end of the minimum holding period and the company has not been sold, the Companist get their investment amount back. Then, a business valuation of the start-up takes place, and the Companists receive compensation that corresponds to their share in the start-up's company value.

Since most start-ups require additional funds for further growth, Companisto contracts are optimized for follow-up financing by venture capital companies. This is an advantage for both the start-up and the Companists because a start-up can only grow and be successful on a long-term basis if it is able to receive venture capital.

For this reason, the shares of the Companists are pooled, and the start-up as well as venture capital companies in follow-up financing rounds have a single contact to turn to.

Without pooling, the start-up would no longer be interesting to venture capital companies because these companies do not want to deal with many different people involved.

In the case of equity-based crowdfunding rounds started before 4 February 2013, the Companists are subparticipating in an atypical silent participation.

Companists receive an overview of all profits, exit proceeds, and other income from their share. In addition to that, they may also view the published annual financial statements of the start-up. Moreover, the start-ups publish quarterly reports on the course of business.

The investment does not entail any obligations; most importantly, there is no obligation to make further contributions.

The scheduled dates of annual reports and investor updates are listed in the investors section of the respective start-up and may be accessed by Companists at any time. Start-ups who started a crowdfunding campaign on Companisto after 01 August 2014 are obliged to mention the following aspects in their investor updates:

•    Revenue of the previous quarter
•    Gross profit
•    EBIT
•    Information on Liquidity
•    Strategy & Product
•    Marketing & Sales
•    Personnel and Press

Please note: Start-ups who made contracts with Companisto prior to 01 August 2014 are also advised to use these KPIs as an orientation.

User comments and questions are an integral part of Companisto. They enrich our website and provide valuable suggestions and helpful feedback to our start-ups.

Generally speaking, it has to be kept in mind when interacting with start-ups that these usually have small teams working 60 hours or more per week on the development and success of the company. The start-ups are trying their best to reply to questions in addition to their day-to-day business, but they have to focus primarily on their core business – which is also for the benefit of the Companists. Consequently, the start-ups should be able to count on the understanding of their Companists when they direct most of their energy toward the maximum success of their business.

The tone and the quality of the comments are important to us. We want to provide an environment in which all users gladly contribute their ideas and suggestions to Companisto.

In our netiquette, we offer some advice and set some rules that you should keep in mind while writing comments. You can find our netiquette at www.companisto.com/netiquette.

During each equity crowdfunding campaign, there is an investment threshold and a funding goal.

The investment threshold must be reached in order for the campaign to be successful, and this threshold is normally €100,000.

The funding goal, on the other hand, is the amount the start-up wants to raise through its campaign. Once the start-up has reached this goal, it may stop its campaign at any time, but it may also raise an amount exceeding the funding goal.

The maximum amount start-ups may raise through Companisto is €2.5 million.

An equity crowdfunding campaign ends as soon as either the time limit has been reached, the funding goal has been reached and the start-up has decided to stop its campaign, or the maximum amount has been reached.

In case the minimum amount predefined by the start-up is not raised in the time provided, the equity-based crowdfunding round is not successful. If this happens, the Companists get their entire investment amount back.

Companisto finances itself by means of a purely success-based commission of ten percent of the raised funds. This commission is paid by the start-ups, not the Companists. Companisto uses the commission to finance all of its expenditures, for instance labor costs, server costs, and the costs of processing payments. The start-up has to pay the commission only if the equity-based crowdfunding round was successful.

The profits are paid out once a year. Consequently, Companists already benefit from current profits and do not have to wait until the company is sold or until the holding period ends.

In the case of private individuals, profits from the shares are considered income from investment of capital and are thus subject to the capital gains tax (25 % plus solidarity surcharge).

The capital gains tax is withheld and paid to the tax authority directly by the start-ups.

In the case of corporate investors, the profits from the shares are subject to corporate income tax and trade tax. Thus, the capital gains tax withheld by the start-ups may be deducted from the corporate income tax and the trade tax.

Profits from shares in start-ups whose equity-based crowdfunding round started before 04 February 2013 are taxed with the personal tax rate of the Companist.

Companisto does not guarantee that the above tax information is accurate.

No. The risk of the Companists is limited to losing the amount of money they invest in a start-up. There is no obligation to make further contributions. In other words, the Companists do not have to invest additional money in any case.

Since the contracts of participation are concluded between the Companists and the start-ups, a possible insolvency of Companisto would not influence the share. Thus, the shares of the Companists would remain valid even if Companisto became insolvent.

Generally speaking, Companists may sell their shares to third parties if they do so independently and sell all of their shares in the company. To do so, Companists have to inform the start-up and Companisto about the transfer of shares, and the purchaser has to confirm that he/she wants to receive the shares. As there is no regulated secondary market for Companisto shares, these shares cannot be traded freely.

Once the minimum holding period has ended, the share may be terminated.

If the share is not terminated, the Companist continues to participate in the company and benefit from its profits and exit proceeds (i.e., profits in case the company is sold).

If the start-up terminates the share, a business valuation according to the IDWS1 procedure takes place. The IDWS1 standard was developed by the institute of auditors, and it is the standard procedure used for business valuations in Germany. Companists are then paid out according to their share in the company value.

If Companists terminate their share themselves, they may choose whether they want a business valuation according to the IDWS1 standard to take place or whether they want the company value to be calculated by means of a multiplier method.

If the multiplier method is chosen, the company value is calculated by multiplying the result (EBIT) of the last fiscal year with a factor of 6.5. The sales multiple is used instead of the EBIT multiple if the product of the sales of the last fiscal year multiplied by 1.0 is larger than the product of the EBIT multiplied by 6.5. Thus, this method always considers the larger of the two company values.

A long minimum holding period is essentially an advantage for the Companists, for this period determines the minimum time during which investors are entitled to a share of the start-up's profit. It is better to participate in the profits for 8 years than for just 5 years.

Moreover, the 8 years do not mean that the profits will be paid out after a period of 8 years. Instead, the profits are paid out once a year, i.e., also during the 8-year period.

Consequently, a long minimum holding period is a very important aspect to which investors should pay attention whenever they invest in a start-up.

The company valuation is used to calculate the respective participation rate of each investor and is conducted by the start-up itself. Prior to the equity crowdfunding campaign, Companisto and the start-up negotiate the lowest company valuation at which the start-up is willing to participate in a crowdfunding campaign. The company valuation is based on the start-up's expected business development and on its expected earnings. The company valuation is not related to the start-up's existing assets. Consequently, it is based purely on the start-up's market opportunities and involves a high level of discretion. The company valuation does not reflect the start-up's profitability or a secure investment in any way.

Ultimately, however, the Companists decide whether they want to invest in the respective start-up under the terms offered.

Crowd voting provides the Companists with additional rights and more influence on a start-up's decisions, and it reduces their risk. It establishes a safety net for investors despite investments in the venture capital sector.

After the completion of a start-up's equity crowdfunding campaign, the start-up will immediately receive 2/3 of the Companists' total investment. The remaining third will be deposited in an escrow account protected against insolvency, and it will not be paid out before the Companists have agreed to the payout by means of a majority decision (weighted according to investment amounts).

The vote is scheduled to take place 6 months after the end of the equity crowdfunding campaign. At the request of the start-up, the vote may also take place earlier than that. If the Companists do not agree to the payout, the remaining third will be repaid to them free of charge.

It is up to the Companists to decide whether the remaining third will be paid out to the start-up or whether the remaining third will be repaid to the Companists, causing their share to remain 2/3 of the total investment. All start-ups offering crowd voting are marked accordingly.

Questions by Start-ups

Start-ups can apply directly and easily via our website. Simply go to Apply as a Company and fill in your application form. Here you can also find more information about the application process. We always enjoy meeting company founders and learning about their promising business models.

Ultimately, the team and the business model have to convince the Companists. The crowd decides.

Companies may raise amounts of up to €2.5 million on Companisto.

In the case of a subordinated profit-participating loan, investors do not have any influence on the operative business of a company. The start-up continues to make its own independent business decisions.

Shares are bought and payments are processed directly via the platform. Neither the Companists nor the start-up bear any administrative burden, for the shares of the Companists are pooled, and the start-up only has to interact with Companisto.

Apart from financing, start-ups on Companisto benefit primarily from the crowd. Our Companists are the best crowd one could imagine because there is only a 100 Euro minimum investment amount on Companisto. Indeed, this enables a large number of people to participate. Most importantly, for the first time in the history of equity-based crowdfunding, it is possible for young, well-connected people with a high internet affinity – who often have a good nose for trends – to participate in the "next big thing." From the start-up's perspective, these Companists are valuable fans, who can help increase the start-up's popularity and participate in open innovation processes if they are really enthusiastic about the start-up's idea.

The start-up does not bear any administrative burden, for Companisto pools the shares of the investors and serves as the contact for the start-up. Shares are bought and payments are processed directly via the platform.

Companisto receives a purely success-based commission: We win if you win. Companisto charges start-ups a success-based ten-percent commission on the raised investment amount for all services related to the crowdfunding campaign. This commission also covers the costs for processing payments. In addition, Companisto charges start-ups a management fee for administrative tasks performed on behalf of the start-up.

Yes. Companisto is the first equity-based crowdfunding platform to have designed the contracts of participation in cooperation with venture capitalists and corporate finance experts.

Freedom of Action: The Companisto model of participation provides start-ups with the necessary entrepreneurial freedom in terms of their operations. Thus, the start-up's freedom of action and autonomy are not limited.

VC Compatibility: The standardized Companisto contracts were designed in cooperation with VC companies and corporate finance experts.

Crowd: Since there is no minimum investment amount, a large number of people can participate. This is also an important advantage for the start-ups. The larger the start-up's fan base is, the more successful it is as a company. Only on Companisto do young people with a high internet affinity have the opportunity to show their support.

No Administrative Burden: The start-up benefits from considerable publicity without having to bear an administrative burden because Companisto pools the shares and serves as a contact for the start-up.

Marketing: Apart from financing, start-ups on Companisto receive an excellent marketing tool: The start-up can present itself to a wide audience and thus increase its popularity considerably. As a result, the start-ups primarily receive publicity, marketing, and a fan club of their own.

Open Innovation: If the Companists participate themselves, they also have a vested interest in the positive development of the company. Therefore, they are particularly motivated to contribute and support the company in the best way possible.

Do you have any questions about investing on Companisto? Please do not hesitate to contact me via email, chat, or phone. If you'd like to give feedback, please send a message to feedback@companisto.com.
Andreas Riedel
Investor Relations

Toll-free phone number for investors

0800 - 100 26 70 (DE)
0800 - 10 02 67 (AT)
0800 - 10 02 67 (CH)

Service hours Mo-Fr 9 a.m.- 7 p.m.



Please note
The acquisition of this asset involves considerable risks and can lead to the complete loss of the assets used.

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Your contact for all questions about investing on Companisto:
Andreas Riedel
Investor Relations

Toll-free phone number for investors

0800 - 100 26 70 (DE)
0800 - 10 02 67 (AT)
0800 - 10 02 67 (CH)

Service hours Mo-Fr 9 a.m.- 7 p.m.

Companisto GmbH
Köpenicker Str. 154
10997 Berlin
TÜV geprüftes Online-Portal | Companisto
Source: Own research. Based on data from the German Private Equity and Venture Capital Association - BVK, among others.
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