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Jelloow 2A

Equity
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Key Investment Information Sheet Terms & Conditions
€439,500
total amount raised
  • Eligible for a tax reduction
Type 1 – Project risk

1. Risk associated with the team's knowledge of the market and correctness of forecasts 

Risk: The JELLOOW team might not have (proper) knowledge of the market and/or make uncorrect forecasts.
 Consequence: If the team does not have sufficient knowledge of the market, it could set incorrect targets. This could lead to a lower valuation in the event of a possible exit because the business plan could not be executed as planned. In that case, there could be lower or even non-existent returns. In the worst case, there could even be a liquidation and bankruptcy of JELLOOW, with partial or complete loss of the invested capital. 

2. Risk associated with the size of the team 

Risk: Given the stage of development that JELLOOW is in, it is essential to have the right team for the future development of the company. If the company relies entirely on an indispensable person, there is a risk that this person will withdraw from the company.
 Consequence: If there is only one manager or key person and that person withdraws, the company is (temporarily) without management. In case of difficulties, no one would be able to represent the company to make decisions. 

Note for both risks: In addition to the founder-director, there is also a COO who also takes on the day-to-day management as a co-entrepreneur. JELLOOW is additionally supported by the incubator Start it @KBC and also receives advice from 2 advisors of which one is part of Start-Up Grind. In addition, the company is also supported by The Harbour, including for the preparation of the financial plan. 

3. The risk associated with the need for new financing 

Risk: Given the stage of development that project owner is in, it is likely that there will be a need for new financing.
 Consequence: On the one hand, there is the risk that the company will not find investors, which would lead to the dissolution or bankruptcy of the company, causing the investor to lose part or all of his investment. On the other hand, there is the possibility that the company will find new investors, which will lead to dilution, which will be even greater if there is a lower valuation than the one currently used.
 Note: Investors will have the opportunity to co-invest in new rounds, at the then current investment conditions. 

Type 2 – Sector risk 

1. The risk associated with the specific activities of the company. 

Risk: There is a risk that it is impossible to find general characteristics per brand and agency or for every brand and agency or that it is too specific to find valuable elements. The risk is also that if JELLOOW finds general characteristics, the characteristics are too broad, and JELLOOW cannot find enough value points to connect the brand and agency.
 Consequence: If this risk occurs, the company may set incorrect goals. This could lead to a lower valuation in the event of a possible exit because the business plan could not be executed as planned. In that case, there could be lower or even non-existent returns. In the worst case, there could even be a liquidation and bankruptcy of JELLOOW, with partial or complete loss of the invested capital. 

2. The risk associated with data quality. 

Risk: Since data is foundational to any ML system, the quality of this data has a tremendous impact on the potential of the system built on top. This specific issue has been at the core of multiple projects.
 Consequence: One problem we expect is that questionnaire forms will follow many different templates making them hard to compare.
 Note: A mitigation/solution to this issue is foreseen, where JELLOOW will derive a generic set of tasks from the other templates. 

3. The risk associated with matching 

Risk: JELLOOW must use an algorithm to perform its activities.
 Consequence: If the model used does not perform or underperforms, JELLOOW will not be able to carry out its activities according to the predetermined quality, which will jeopardize the business plan if not enough customers can be attracted (as was foreseen in the business plan). 
Note: Multiple algorithms can perform multi-output regression, so JELLOOW’s plan A is to use those. Should these models underperform, JELLOOW can fall back to a similarity-matching approach where the most similar case is based on the features. The effort per subtask for this most similar task is then returned. 

Type 3 - Risk of insolvency and bankruptcy of the project owner 

Risk: The risk of insolvency means that JELLOOW does not have sufficient funds to meet its payment deadlines (cessation of payments). 
Consequence: If the company does not find alternative financing (shocked credit), it may go bankrupt. The insolvency or bankruptcy of JELLOOW may lead to lower or non-existent returns and in the worst case to a partial or total loss of the invested capital. 

Type 4 - Risk of lower, delayed or no returns. 

1. Risk associated with the lack of guarantees. 

Risk: Neither the shares of JELLOOW nor the Participatory Notes of the JELLOOW 1A compartment of Spreds Finance provide guarantees of a return or repayment of the invested capital. 

2. Risk associated with the lack of a fixed return. 

Risk: Participatory Notes do not offer a fixed return. The return of the Participatory Notes depends solely on the performance of the Underlying Asset, namely the shares of JELLOOW.
 Consequence for both risks: If the project owner's predictions do not come true (within the predetermined timing), there is a risk of lower or non- existent returns and, in the worst case, partial or complete loss of the invested capital. 

Note for both risks: Investors in Participatory Notes bear the same economic risk as if they were investing directly as shareholders of JELLOOW. 

Type 5 - Risk of failure of the financing vehicle
 Risk: Although each Spreds Finance compartment is ‘bankruptcy remote’ (meaning that no other creditor can claim a right on or against this compartment) in relation to the others and in relation to the ‘general’ liabilities of Spreds Finance itself, as a result of (i) the terms and conditions of the Notes, (ii) the articles of association of Spreds Finance and (iii) Article 4 of the Law of 18 December 2016 on crowdfunding; there is a subsidiary risk of insolvency of Spreds Finance.
 Consequence: Should such insolvency occur, Noteholders may be exposed to the risk of a significant delay in the recovery of their investment. 

Note: The probability of this risk occurring is extremely low given the structure and organization of Spreds Finance, in particular the compartmentalization mechanism and the "bankruptcy-remoteness" described above. Each participation taken or loan granted to a project owner is recorded in a separate compartment and is appropriately accounted for in the accounts, taking into account the fact that the accounts are kept by compartment. As a result of (i) the conditions attached to the issue of Participatory Notes, (ii) the articles of association of Spreds Finance and (iii) article 10 of the law regulating the recognition and delimitation of crowdfunding and containing various provisions relating to finance and notwithstanding articles 7 and 8 of the Mortgage Law of 16 December 1851, the assets of a particular compartment serve exclusively to guarantee the rights of investors with respect to this compartment. 

Type 6 - Risk of illiquidity of the investment 

1. Risk associated with the absence of an organized exchange market for Participatory Notes 

Risk: Neither the project owner nor Spreds Finance organizes an exchange market for Participatory Notes. It is thus up to the investor himself to find a buyer for his Participating Notes. Given the absence of an exchange market for Participatory Notes, there is no way to adequately establish a comparative pricing methodology for Participatory Notes.
 Consequence: A holder of Participatory Notes may not be able to find a buyer for the Participatory Notes it wishes to sell (at the price at which it wishes to sell). 

Note: The intention is not to sell the Participatory Notes but to sell the Underlying Asset, often on the occasion of the sale of the Underlying Company itself (see Appendix B, (d)). 

2. Risk associated with the vote by the general meeting of holders of Participatory Notes to sell 

Risk: Any decision by Spreds Finance to sell shares of JELLOOW is subject to the approval of the holders of Participatory Notes representing at least 75% of the outstanding Participatory Notes, unless Spreds Finance is required to sell them under a contractual or statutory provision. 
Consequence: Investors thus bear the risk that the general meeting of the holders of Participatory Notes may refuse to approve the sale of the participation, in which case all investors are bound by this decision and thus must wait to obtain redemption of the Participatory Notes. 

3. Risk associated with an investment in a young company 

Risk: Investing in shares of young companies entails the risk that a buyer for the shares will not be found, or not at a fair price yielding a market return, or that a buyer will not be found within a reasonable period of time.
 Consequence: If no buyer is found for the holding, redemption of the Participatory Notes is not possible.
 Note: Spreds Finance will make every effort within its powers to obtain the best possible price. 

Type 7 – Other risks 

1. Risk associated with the absence of an analysis by Spreds Finance 

Risk: Spreds Finance has not conducted an analysis of the proposed project or of the financial situation of the Underlying Company. 
Consequence: Any investor considering subscribing to Participatory Notes should make its own analysis of JELLOOW's solvency, activity, financial situation and prospects.
 Note: Any decision to invest in Participatory Notes should be based on a comprehensive analysis of the project and of this sheet of essential investment information. Spreds Finance's model does not provide for the presentation of analyzed projects to investors but allows investors to invest based on the information made available to them, after making their own analyses. 

2. Risk associated with the name of the Underlying Company 

Risk: Another player on the market has a very similar name.
 Consequence: This could create confusion between the 2 brands for (potential) clients.
Note: Today competitors on the market focus on connecting brands with marketing agencies or freelancers but ignore the importance of relevant messages. On the matching part, JELLOOW competes against players such as Sortlist, Fiverr, Freelancers.com. However, no competitor uses deep industry insights, market trends and real-time data tracking to enable businesses to run successful marketing campaigns.
 To the best of the project owner's knowledge, there are no other material risks associated with its activities. 

TAX SHELTER 45%

Investments in this company benefit from a 45% personal income tax reduction. Read more…
A remaining amount of €340,500 is available for the Tax Shelter benefit.

Fact sheet

Advised by a professional start-up advisor
Valuation is set by the co-investor or incubator
Co-investor or incubator will be members or observers to the board
At the closing, an incubator, accelerator, or studio will have shares
At the closing, the entrepreneurs have contributed a minimum of €15,000 in cash in exchange for shares
Emits less than 3.7 t of CO2 per year, per employee
At the closing, a professional co-investor will have invested at least €25,000
Prior fundraising in equity or convertible loan with 10 or more investors
Seasoned entrepreneurs
Considered “compliant” on the assessment tool of Tapio
Minimum 2 active entrepreneurs
Valuation set by an organisation specialized in valuations of comparable size
Valuation is less than €1 million or 10x last year’s turnover

Raise summary

Crowd investments €39,500
Committed by others €400,000
Amount raised €439,500
Minimum round €25,000
Maximum round €945,000
Shares in the company (total round) 46.21%
Pre-money valuation €1,100,000
Post-money valuation min. €1,125,000
Post-money valuation max. €2,045,000