The general risks of investment crowdfunding and what you can do to mitigate them.


Everyone at Spreds wants to be sure that our investors understand the risks involved when investing on our platform. We strive to include a balance of both risk and reward concepts 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 Information Note 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 co-investors. Investing in an early-stage business, whether it is a startup or scale-up, micro-enterprise or SME, are all more risky investments than the stock market, and can take longer to mature.

Never invest more than you can afford to lose.

Loss of investment or tax relief

The majority of start-up businesses fail or do not scale as planned. It is possible that you may lose all or part of your investment. If a company you have invested in declares bankruptcy, it does not usually have funds available to repay debts or 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 below.

Under the Belgian startup tax shelter program, investors that pay income tax in Belgium may qualify for a tax reduction of 25-45% of their investment.

Spreds has carefully examined all Tax Shelter investment opportunities and presents them in a transparent manner. However, the tax relief depends on the individual circumstances of each investor and is not guaranteed.

If the Tax Shelter conditions are not met, the investor may be obliged to refund a portion of their tax reduction received, pro-rata according to the remaining time of the 4 year period.

If you are in any doubt about the availability of any tax relief or the tax treatment of your investment, you should obtain independent tax advice before proceeding with your investment.

The startup Tax Shelter program has a number of conditions to comply with to ensure the full benefit of your tax reduction, including:


You must keep your Notes for at least four years. Similarly, Spreds Finance cannot sell the participation of the company during the 4 year period.


The company you invested in cannot change their business. It cannot later become an investment firm, financing enterprise or treasury company; or a management company; or a real estate company.

Use of funds

The company cannot use the funds raised to distribute as dividends to acquire shares or to issue loans.


Dilution occurs when a company issues more shares. Any investment made on Spreds may be subject to dilution in the future. This means that if the business raises additional capital at a later date, it will issue new shares to the new investors, and the percentage of the business 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 buy any of the new shares being issued. Spreds will inform all Noteholders if their investments are subject to dilution.

Absence of dividends

Dividends are payments made by a business 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.

Investing through Spreds is illiquid, as we don’t organise a secondary market where Notes can be sold. Investors can sell their Notes at any time if they can find a buyer privately.

Investors can have a return on their Notes under certain circumstances including: the business is sold, or the business floats on a stock exchange, the shares in the company held by Spreds Finance are bought.

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.

Have questions?

Read our Frequently Asked Questions. Our team can also help, simply contact us to discuss.

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