Capital at risk: Learn more about investing in early stage companies. This offering is part of the FCA’s Sandbox test.

TokenMarket
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The Investment Platform powered by Blockchain

Frequently Asked Questions

    Investing process

    Who can invest?

    Investors through the TokenMarket Platform must be:

    (a) over 18 years old and legally entitled to invest;

    (b) resident in the United Kingdom or a country where you may legally receive financial promotions of the nature provided by TokenMarket; and

    (c) legally entitled to invest in the type of investments being offered through the Platform.

    There are 4 categories of investor who can invest through the Platform and, as part of the registration process, you must confirm that you fall within one of these categories. This will entail completing a questionnaire which is available on the Platform. Part of the rationale behind this questionnaire is that you need to confirm that you understand the nature of the risks involved in investing in the types of investment opportunities available through the site. These being largely investments in start-ups and early stage businesses are inherently at the high end of the risk spectrum.

    The only circumstances in which you will not need to complete the aforesaid questionnaire is if you are receiving independent financial advice on your investments.

    Do you have any investment restrictions dependent on country?

    Countries not eligible for equity crowdfunding

    Crowdfunding investment opportunities are not available in any country where we believe it would be unlawful to accept investments from everyday investors through the TokenMarket Platform.

    If you are an accredited investor, fund or company coming from these countries you may still be eligible to invest. Contact TokenMarket investor relationships and we will set up one-to-one call with you.

    Currently residents of the following countries cannot participate in crowdfunding offers

    • United States
    • Canada
    • Japan

    Non-cooperative jurisdictions

    The investment opportunities are not available for the residents of countries that are on the high risk list of Financial Action Task Force (FATF) and the Office of Foreign Asset Control (OFAC) list

    These include:

    • Bahamas
    • Belarus
    • Botswana
    • Burma
    • Cambodia
    • Cuba
    • Democratic People's Republic of Korea (DPRK)
    • Democaratic Republic of Congo
    • Ethiopia
    • Ghana
    • Iran
    • Iraq
    • Ivory Coast
    • Liberia
    • Pakistan
    • Serbia
    • Sri Lanka
    • Sudan
    • Syria
    • Trinidad and Tobago
    • Tunisia
    • Yemen
    • Zimbabwe

    People in these countries are blocked to make payments towards any investment opportunity on the TokenMarket Platform.

    How does the investment process work?

    You will need to register as a member of the TokenMarket Platform before investing. The registration process ensures that you fall within a category of investor, that understands the risks of investing in crowdfunding. Once you are registered, you will gain additional access to the investment opportunities that Issuers have advertised on the Platform. It is then simply a case of selecting an opportunity that you wish to invest in, then enter the amount you would like to invest and follow the instructions on the Platform.

    Before being able to invest:

    1. you will firstly need to register on the Platform as an investor (see “What types of person can invest”);
    2. You will then need to carefully consider the various investments available through the site and conduct your own due diligence on these and the information they provide. In this regard, your attention is drawn by the Risk Factors on the Platform and any specific risk factors outlined in the documents relating to each investment;
    3. Having identified an investment, you would like to make, you should click on the “Invest” and follow the process to make an online payment. Lastly, click the “Confirm”.

    Subject to all the conditions to the relevant investment being met (see below), which will be set out in the investment details on the Platform, your investment has been lodged.

    Payment can be made to our third-party payment provider identified on the “Payments page” using a debit, credit or prepaid card which is authorised by the payment service provider. Payment can also be made by a BACS interbank transfer through EEA banks. See FAQ “Paying for my investments” for more details. There is no facility whereby you can pay by cheque.

    Once the investment has achieved its target funding, you will be given a copy of the constitutional documents of the Issuer of the investment and any other required legal documentation (such as a shareholder’s agreement), you are being asked to become a party to. You will then be given 7 working days to review your investment, and, if you wish to proceed, the legal documentation should be completed. During this 7-day period you may reduce or withdraw your investment by emailing support@tokenmarket.net

    In no circumstances will your money be taken if the investment opportunity does not reach its minimum funding target.

    Payment

    What is the minimum investment amount?

    The minimum investment you can make is GBP 50.00.

    What payment methods can I use?

    Credit and debit cards

    You can make a payment using credit and/or debit card. We accept the following cards:

    • Visa
    • MasterCard
    • Discovery

    In some cases your bank might block your credit card payment for equity crowdfunding investment. In these cases contact your bank or try a different debit/credit card.

    Wire transfers (“bank transfers”)

    You are able to make investments via wire transfer(s) from your bank by:

    • Swift (international wire)
    • Faster payments (UK bank accounts)
    • SEPA (EUR bank accounts)

    Can I pay in a cryptocurrency?

    Currently TokenMarket does not accept cryptocurrency payments, although we are keen to accept them as soon as possible and this may change in the near future.

    If you are holding cryptocurrency which you wish to invest in these projects we recommend the following

    • Globitex offers you EURO Wallet project which gives you Euro bank account - you can use this to convert you cryptocurrency to Euros and then invest
    • Wirex offers cryptocurrency debit cards in Europe
    • Coinbase offers cryptocurrency debit cards in the US
    • If you are investing a large amount, TokenMarket is happy to help you to convert the currency, please contact support@tokenmarket.net for support

    How will my payments be processed?

    TokenMarket uses two partners to process payments and hold customer funds

    • Paysafe Holdings UK Limited for credit and debit card payments
    • Clear Junction Ltd. for wire transfers

    Note: funds will not be held by TokenMarket but by PaySafe or Clear Junction. Funds will only be transferred to the Issuer or to meet fees relating to the Offer (including those of TokenMarket) if TokenMarket confirms to Clear Junction or PaySafe, as the case may be, that all of the conditions to the Issuer’s offer have been met. If the conditions are not met either payment will not be taken from your card (if they have not been transferred already) or, in relation to funds already transferred to Clear Junction’s or PaySafe’s client accounts, returned to you less any transfer charges as outlined later in this FAQ.

    The funds paid for by card will immediately display as paid in your account on the TokenMarket platform. Note that it still may take up to two business days for the card payment to settle and TokenMarket to receive the funds.

    If you deposit funds to the Clear Junction account by bank transfer, you will need to instruct an electronic transfer from your bank using the details provided. Unlike with payments made by card, these funds will only display in your TokenMarket account once they have been received into our Clear Junction client money account – you’ll receive a notification when this has happened.

    Please note that while your money is held by Clear Junction or PaySafe, such funds will not be treated as client money held by TokenMarket under Financial Conduct Authority (FCA) Client Assets Sourcebook rules.

    Neither TokenMarket nor the Issuer itself will charge you any fees for payment or deposit processing. However, you will pay (a) any bank credit or debit card transfer charges on your side to ensure that the full intended amount reaches our payment service providers; and (b) in the circumstances outlined above, any bank charges incurred by Clear Junction should the money need to be transferred back to you.

    Which identity checks will I have to perform?

    In order to confirm the identity of an investor through the platform, TokenMarket has to conduct Anti-Money Laundering (AML) checks. These are also sometimes known as “Know-Your-Customer” or KYC checks.

    There is a statutory obligation on TokenMarket to ensure that it knows the identity of each investor. Accordingly, when registering on the Platform for the first time you will be asked for documents to prove your identity and proof of your residency. The types of documents that are acceptable for these purposes are specified on the Platform when you register, these can be uploaded onto the Platform. Investments cannot be made by you unless satisfactory documentation is received and approved by TokenMarket.

    These checks will be renewed annually.

    Under the regulations set by the Financial Conduct Authority (FCA), TokenMarket must undertake these checks before investments can be made, regardless of the size of investment although greater verification, or so called “enhanced due diligence” may be required for particular investors or for larger investments.

    Acceptable identity documents include international passports and most national identity documents like driving licences.

    See the full list of supported identity documents on our compliance partner, Onfido.

    How many times can I invest into each opportunity?

    You are able to make an unlimited number of payments for a single pitch. Any number of individual payments will count as one investment.

    What happens in the case of payment issues?

    Some payment methods, like credit cards, are subject to chargebacks. Your payment might be rejected and claimed back, usually as a part of fraud investigation. This might be requested by you, TokenMarket, the card issuer, your credit card company and/or your bank on a third party payment processors.

    TokenMarket will aim to contact you in order to resolve these issues.

    TokenMarket will monitor payments 180 days or longer after the payment has been made. In the case of TokenMarket cannot resolve the issue with you, the investment is considered invalid and the issuer will claim back any equity tokens you have received. You may also be blocked for further usage of the platform.

    Investing in equity crowdfunding

    What is equity crowdfunding?

    Investing in equity involves acquiring a stake in a business. The reason for doing so is the hope that the value of that stake goes up over time. However, the risk is that the value of that investment goes down or becomes zero. Equity crowdfunding involves spreading that risk across a larger number of investors and such investors can also spread their risk through TokenMarket and other similar platforms across a number of similar investments. Although the risk can be spread through crowdfunding, you should be aware of the risk to your capital is still there.

    Why invest through TokenMarket?

    The TokenMarket Platform provides investors with access to early stage investments, a market traditionally only open to institutional investors. These investments are highly risky and there is a high risk that your capital may be lost as many early stage and start-up companies fail. However, there is also the possibility of very high returns on such investments if the relevant company succeeds in its objectives or there is an Exit Event (see FAQ “How does my investment make money?”). High risk investments should only be made as a small part of your portfolio to mitigate the risk of failure.

    How does my investment make money?

    You should be aware that your investment may never offer monetary rewards or any other return and may be lost completely, if the Issuer fails.

    Returns are usually generated only if the Issuer you have invested in undergoes an Exit Event in future. “Exit Events” include a sale of the Issuer or its business, the Issuer conducting an initial public offer on a stock exchange or the Issuer electing to buy-back your investment. The type of Exit Event an Issuer is aiming for may (but may not) be contained in the investment information.

    How does investing actually work?

    Under the TokenMarket model, investments in a business will result in you becoming the holder of the beneficial interest in a share of the Company that owns that business together with a token which represents those shares in a blockchain form on the TokenMarket Platform (a “Token”). The Tokens will have the same rights as the underlying shares. For more information on Tokens see FAQ “Tokens”.

    Your percentage ownership interest in a business will be determined by the amount you invest and the nature of the security you invest in. It may also be determined or varied by the amount others invest in the business, now or in the future.

    You should regard any investments made as long term as there is no ready market for the shares or Tokens although you may, through the TokenMarket platform, be able to sell to other share and token holders in the same business. However, this cannot be guaranteed. In addition, the investment you make will be invested in the business to enable it to expand but there can be no guarantee that it will grow and such an investment is, by its nature, likely to be long term and high risk.

    You should check carefully the rights attached to the investment in tokens and shares that you make. Many offerings are for tokens and shares in a crowdfunding have no pre-emption rights (which are rights for you to participate in future issues of shares and tokens to avoid your stake being diluted) or voting rights on future business decisions which might affect your investment.

    Companies can also offer shares and tokens with voting and pre-emption rights at the same time as offering shares and tokens without those rights but only if your investment is above a certain threshold. You should therefore read the terms of any offer carefully., so please check the pitch carefully.

    Please note that many of the investments available on the TokenMarket Platform will be into start-up and early stage businesses. These are high risk investments as the majority of start-ups fail or do not deliver shareholders a return on their investment. Liquidity, or the ability to cash in your investment, is limited as it often relies on the company being sold or obtaining a listing on a stock exchange, both of which may never happen. Dividend payments are rare, and the likelihood of an investor's percentage shareholding being diluted by future fundraising is high.

    Investors should therefore implement a diversification strategy when building an investment portfolio. Diversification involves spreading your money across multiple investments and will give you, as an investor, greater peace of mind that your investments will be sustained in adverse market conditions, and losses will be cushioned. However, it will not lessen all types of risk.

    What risks are there in participating in an equity crowdfunding offer?

    You are urged to carefully consider all of the risks to crowdfunding which are set out here.

    Many of the issuers using crowdfunding are at an early stage in their development or are start-ups which are, by their nature, risky investments. You are urged to diversify your investments to spread this risk across several investments rather than invest into just one issuer.

    The principal risks to investing in equity in a company are:

    1. If the business fails you will not get you money back or,
    2. if the business fails to fulfil its potential, you may make no return on your investment
    3. Investments into private companies are illiquid. You are therefore locked in to your investment, potentially for a very long time if not forever and even if the business succeeds you may get no return for several years as early stage companies tend to reinvest profits rather than pay dividends. 
    4. If your investment does not have any pre-emption rights, and many investments through the TokenMarket Platform do not, there is a risk that your investment may be diluted (see FAQ “What is Dilution”) when the issuer raises further finance.

    What is dilution?

    Dilution is what happens when the Issuer issues more shares/tokens after the crowdfunding and an existing investor such as yourself does not buy more tokens so that your overall percentage ownership of the Issuer decreases.

    If an Issuer I have invested in fails, what happens?

    Investing in startups and early stage businesses involves a high level of risk. See FAQ “What risks are there in participating in an equity crowdfunding offer?”

    If an Issuer through the TokenMarket fails and you are an investor TokenMarket will notify you as soon as possible

    To mitigate your risk, you should have in place a strategy for diversifying your risk by making risky investments across a number of investments. Accordingly, if one fails, this is not fatal to your whole portfolio of investments. It does not, however, mitigate all risk; it just lowers your risk profile.

    Loss Reliefs in the event of business failure

    If tokens become worthless because the Issuer fails or the tokens are disposed of for less that an investor paid for them, the investor may be able to offset that loss against his tax.

    In general, investors should take independent advice on their personal tax position.

    However, for UK investors the loss can generally be offset against either against other capital gains or against their income in the year in which the loss is crystallised or against that of the previous year. Usually, any income tax relief already claimed on the investment will be deducted.

    Can I invest in equity pitches via a Company or SIPP?

    You can invest via a company on the TokenMarket Platform but the company will also need a Wallet (see FAQ “Wallets”). To invest via a company, you will need to provide “know your client” or “anti-money laundering” details on the company and its beneficial owners. Details of the documents to be provided will be provided to you when you register on the Platform and TokenMarket will need these before you can invest.

    Investments through SIPPs may be possible. However, you should contact us or your SIPP provider for details on how this may work

    Are EIS or SEIS tax relief schemes applicable to this TokenMarket Ltd crowdfunding campaign?

    No, TokenMarket Ltd is a Gibraltar company and not eligible to participate in EIS or SEIS.

    After investing

    What happens after I have invested?

    Each Issuer will set a minimum target for the investment it wants. Once the Issuer reaches its target all investors will receive a copy of the Articles of Association of the Issuer and possibly other documents via email and will be informed of the cooling off period which is generally at least 7 days. If you do not withdraw your investment during this period payment will be taken in the manner you have requested. and then electronic tokens representing shares (and not share certificates) are issued to your Wallet (see FAQ “Wallets”).

    What happens to my payment in the case of minimum funding goal is not reached?

    No funds will be held by or transferred to TokenMarket or any Issuer itself until the relevant offer is unconditional. In the interim, funds will be held by PaySafe or Clear Junction in designated client accounts.

    If a pitch fails to reach its funding target (the “Goal”) within the time specified on the Platform funding goal by the time the pitch expires, may at the discretion of TokenMarket be allowed an extension, particularly if there is still investor interest. However, if not, the Issuer will have to withdraw the offer. If an offer is withdrawn no investor money will be taken.

    TokenMarket will process to refund all payments. There may be a refund fee up to 15.00 GBP.

    • Card payments will be returned to your payment card
    • Wire transfers are returned to the IBAN account where they came from

    How long is my payments cooling off period and I can ask for a refund within that time?

    Payment will be made by way of our service providers. These are identified on the Platform. Larger investors may be asked to use other means and such investors will be notified by the Platform and may be subject to additional due diligence. Payment will only be taken once the Issuer has reached its target and the legal documentation has been provided. After reaching the relevant target, you will still be given at least a 7-day period to review the Issuers Articles of Association and other documents relevant to your investment prior to your money being taken.

    During the 7 day cooling-off period your proposed investment can be reduced or revoked by contacting info@tokenmarket.net. You may also raise any queries you may have.

    When is payment for my investment collected?

    See FAQ “Funds Flow.” No funds will flow to the Issuer or TokenMarket unless any condition to the offer is met and the cooling off period has expired. Once these have happened you will be sent an email confirming when your payment will be collected and your investment completes.

    Can I vary my investments after making them?

    Investments may be varied until any conditions are satisfied and the cooling-off period expires. After that occurs, all investments are legally binding.

    Instructions on variations can be found on the Platform. Any reduction or cancellation will be confirmed by email.

    What happens if the amount raised by an Issuer exceeds its target?

    If the target amount an Issuer is seeking is met, it can choose to take an excess amount BUT only if it increases the amount of Tokens being offered (at the same issue price). This will also have to be reflected in the percentage offered by the Issuer. However, the Issuer is not obligated to offer this and may only accept the target amount.

    Tokens and electronic wallets

    How do I receive shares as equity tokens?

    The TokenMarket Platform is different to other crowdfunding platforms in that it enables issuers to issue their equity in the form of electronic tokens, In order to make an investment through our platform and receive your tokens you will need an electronic wallet.

    What are the benefits of security tokens?

    Tokenisation is a rapidly growing branch of blockchain technology and its lists of attributes are diverse, especially when applied to the securities market. Here are some of the key advantages investors can benefit from:

    • Regulatory compliant
    • Transparency
    • Fractional ownership
    • New investor access
    • Intrinsic value (asset backed)
    • Less manipulative markets
    • Potential for greater liquidity
    • More efficient transfer of ownership
    • Potential for 24/7 markets

    Are equity tokens bearer shares?

    TokenMarket issued equity tokens are not bearer shares.

    Bearer shares is a term for share certificates where the certificate owner can act as a shareholder without proof of identity. All TokenMarket issued equity tokens have a matching capital table and shareholder registry with identity records held in a central database. The shareholder registry is usually also updated to Companies House or other national institution maintaining company records.

    The matching book entry accounts of hold numbered shares is kept in blockchain. You cannot become an owner of equity tokens without registering your identity with a central database first.

    What token protocol does TokenMarket use for its security tokens?

    The tokens issued will use TokenMarket security token protocol.

    As blockchain technology continues to develop we may choose to move to non-Ethereum blockchains or multiple blockchains, thus the token protocol for issued tokens may also change dependent on this.

    Which wallets are compatible with your security token protocol?

    Currently supported wallets are listed under Wallets section of Your account on TokenMarket platform.

    Currently we support Ethereum public blockchain wallets support either

    Please note that TokenMarket is actively working on partners and equity tokens may be migrated to another blockchain.

    What happens if I lose access to my electronic wallet?

    Your equity tokens are controlled by the private key that is stored in your wallet. If this private key becomes lost or stolen, you will lose direct access to your equity tokens.

    Unlike cryptocurrencies, equity tokens are controlled by the issuer. The issuer can invalidate lost tokens and reissue you new tokens in a new wallet.

    You are able to get your lost tokens back by:

    • Getting in touch with TokenMarket support
    • Pass identity verification procedures
    • Register a new, functional compatible wallet
    • Due to wallet address changes, there may be a public record for recovering your lost tokens, similar to updating shareholders registry on Companies House
    • There may be a fee included for token recovery

    What happens if I forgot to register a wallet?

    In the case if you make an investment and forget to register a wallet address, the token delivery for your wallet will be pending until you register one.

    You are still marked as a shareholder in the shareholder registry. You will receive your tokens after you register a wallet.

    Registering a wallet may be prerequisite for shareholder actions, like viewing investor communications from the issuer.

    What happens in the case tokens are migrated to a new blockchain?

    Tokens may need to be moved to a new blockchain platform for various reasons, including e.g. optimisation of token transfers speed, higher security and/or wider support of different wallets.

    In the case the equity tokens need to be moved to a new blockchain in the future, you can register another compatible wallet for the future blockchain.

    • Tokens in your wallet are “frozen” - you cannot move them
    • You can register a new wallet for a new blockchain on TokenMarket
    • You receive equal amount of newly issued tokens in your new wallet as you previously held.

    Acting as a shareholder and corporate governance

    Do I become a real shareholder?

    Tokens present real shares and you are a real shareholder of a company, with all shareholder rights as described in the Articles of Association of the issuer.

    Your name is written in the shareholder registry.

    Is my ownership public?

    The shareholder ownership may be public or private depending on the home country of the issuer.

    TokenMarket mainly works with UK and Gibraltar based shareholders, but you need to check each issuer individually. As a shareholder, your name will be written in the shareholder registry that is delivered to the Companies House of the issuer's home country.

    How can I make a return on my investment?

    See FAQ “How does my investment make money?

    In addition to those exits outlined in the above FAQ, some Issuers may begin to pay dividends but this can only occur once a business is profitable and the Issuer elects to return profits to token holders rather than invest these into growing the business.

    What happens once I've received my tokens?

    When all of the conditions to the Issuers offer have been met and your funds have been transferred to the Issuer your details will be entered onto the Company’s register of members and your tokens will be issued to your wallet.

    The Issuer will thereafter be able to update you directly, usually through the Platform, on future developments and any matters relevant to you as a token holder. The level of communications depends upon the Issuer concerned, but most provide regular updates as well as periodic updates when they have news. We anticipate that many will continue to use the Platform on an ongoing basis to maintain a two-way communication channel with Investors. Including blogs and noticeboard. This of particular benefit to Issuers and Investors so that awareness of the Issuer and its business remains high. It may also lead to invitations to you to participate in future fund raising.

    Do I need to tell you if my details change?

    Please update your details on the Platform if you change any of your details such as your address so that we can facilitate communications between the Issuer and yourself. It also enables us to make sure you are apprised of any other opportunities available through the Platform

    Is it possible to sell my tokens?

    The transferability of your tokens and the mechanism by which they can be transferred depends upon two things:

    1. The Articles of Association (or other constitutional documents of the Issuer) and the rights attached to the class of shares underlying the tokens you have; and
    2. Whether there is any market in the tokens, otherwise known as liquidity. \

    Please note that in any event you will be unable to sell your tokens without the underlying interest in the shares of the Issuer being transferred at the same time.

    Restrictions in the Articles

    You should consult the pitch documents produced by each Issuer on the Platform to determine what class or type of shares underly the tokens you are buying. Once you have done that, you need to examine the Articles of Association (or other constitutional documents of the Issuer) to see what rights attach to the tokens you are buying, including any transfer rights and the mechanism by which tokens can be transferred.

    In early stage Issuers, the Articles frequently contain so-called, pre-emption rights. This means that your shares/tokens cannot be transferred without them having to be offered to other existing holders of shares first who will have the first option to buy them. It is likely that these restrictions and the way in which they will operate will vary from Issuer to Issuer

    TokenMarket does not provide legal or investment advice so if you are in any doubt about the pre-emption rights or any provisions of the Articles, you should seek independent legal advice.

    Liquidity

    Many, if not all, of the Issuers on the TokenMarket Platform will be early stage private companies so there is unlikely to be any market in these tokens. There is therefore a major risk that you may not be able to sell your tokens due to a lack of liquidity. By issuing their securities in tokenised format the Issuers expectation is likely to be that a market in its securities will develop faster than may otherwise be the case. However, it is important to note that markets for tokenised equity and therefore this liquidity does not exist currently and may take some time to develop.

    It is possible that you may be able to sell your tokens to existing holders of other tokens in the same issuer through the Platform, but this facility does not currently exist.

    Can I ever be forced to sell my shares?

    Many, if not all, Issuers using the Platform will want to preserve the right of the majority equity holders to take advantage of an “exit event” if it is attractive to them. This generally takes the form of a so called “drag along” procedure in their Articles of Association. This enables the majority to effectively drag all share and token holder into the same exit event. An exit event may be a sale to a third party or a listing on an exchange, each of which would need all share/token holders on boa articles of association.

    The drag-along clause in each Issuers articles of association are likely to be different and should be considered before you make your investment. 

    If there are drag-along provisions the overall effect is that the minority holders of shares/token have to go along with the will of the majority even if any proposed transaction results in a loss for investors in the crowdfunding.

    Support

    How can I contact TokenMarket?

    Note: TokenMarket does not give and is not authorised to give investment advice. If you need investment advice you should seek that independently.

    Please use the in-page chat widget or email support@tokenmarket.net to contact us for any enquiries.

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