Frequently Asked Questions

What are the risks linked to an investment?

Everyone at Spreds wants to be sure that our investors understand the risks involved when investing on our platform. Although the investment opportunities offered can generate important returns, they also bear high risks, which is why we strive to be clear about the risks in all of our messages and conversations about investment opportunities.

Most of our materials include a warning, like this one: “Investing carries serious risks, including partial or total loss of capital. Please read the key investment information sheet and the risk factors before investing.”

A different asset class

Investing is always risky. It is important to remember that we offer access to a new and different type of asset class, which was previously available only to professional investors or high net worth individuals. Investing in startups, scale-ups or SME’s is more risky than investing in large companies on the stock market, and can take longer to mature.

Never invest more than you can afford to lose.

There is a rule of thumb that you can use, the 10/10/10 rule. Invest only 10% of the liquidities you can afford to lose and don’t need for the next 10 years, in 10 different companies, in order to diversify your risk.

Loss of investment

No investment proposed by Spreds is guaranteed in any way. This means that investors risk losing all or part of the amount they invested.
This is particularly true for equity investments made in young companies, as the majority of start-up businesses fail or do not scale as planned (see the statistics). If a company you have invested in, is declared bankrupt, it does not have funds available to repay its shareholders. According to law, the shareholders are the last to be reimbursed, after debtors and other parties. If that happens, Spreds is not responsible to pay you back for your investment. We explain some ways to mitigate this risk here.

Debt investments in SME’s, although less risky than equity investments, still bear risks. The company can have business set-backs hampering its ability to reimburse the loan (temporarily or definitely). The debt investment proposed on Spreds will not all be secured by underlying guarantees (pledges, mortgage, …). Spreds does not guarantee the reimbursement or payment of the interests. Spreds will however do its utmost best to ensure that the company pays its dues and will pay any sums received from the company to the investors.

Loss of tax shelter

The investor must hold his investment for 48 months. If the investor sells his or her investment earlier or if the company is voluntarily liquidated, the tax reduction is taken back for the months remaining. 

In case of a liquidation due to bankruptcy, however, the investor does not lose his tax reduction. 

Also, in case of death of the shareholder, the heirs are not bound by the retention obligation.


Any equity investment made on Spreds may be subject to dilution in the future. This means that if the company raises additional capital at a later date, it will issue new shares to the new investors, and the percentage of the company that you own will decrease. This does not mean your investment is making a loss, as the value of the company will likely increase as well.

Dilution affects every existing shareholder (or Noteholder) who does not subscribe to any of the new shares being issued. Spreds will inform all Noteholders if their investments are subject to dilution and propose them to invest to avoid dilution (except if a decision is made by the investors to forfeit their right to participate, upon request of the company, in order to let an important new investor participate).

Absence of dividends

Dividends are payments made by a company to its shareholders from the company’s profits.

Investing in equity does not involve a regular return on your investment like bonds or public stock which offers dividends paid regularly. Any profits generated from the companies on our platform are typically re-invested back into the business to grow and scale the business.

A business has no obligation to pay any dividends to shareholders.

Lack of liquidity

Liquidity means the ability to quickly buy or sell an asset or security.

The shares or loans in which investors invest directly or through Spreds Finance are most of the time illiquid.

This illiquidity can be caused by statutory rules prohibiting the sale of the securities (which is often the case with shares in young companies) or by the absence of an organised secondary market.

The Participatory Notes in which investors invest can however freely be sold at any time.This does not mean that an active secondary market exists. Investors will need to find a buyer privately. Therefore, investing through Spreds Finance remains relatively illiquid. 

Exit and capital gain on shares

Investors can have a return on their Equity-Linked Notes under certain circumstances including: the business is sold, the shares of the investors are bought or the shares of the company are listed on a stock exchange allowing for an easy way to sell their individual shares.

The time to mature differs depending on the business, but it is typically projected around 5 to 8 years from the initial investment. That means you won’t be able to recover your investment or expect any returns for 5-8 years.