Equity-based Crowdfunding : Investor FAQ

Is B-a-MedFounder an All-or-Nothing fundraising site?

No, B-a-MedFounder is not an “All-or-Nothing” fundraising site. We know that investors do not wish to invest their money if the total pledged sum in a project is not close to that project’s initial funding target. The invested money is for the use in the development of the idea and not for other expenses. We calculated that, after taking into consideration the fees related to raising funds through crowdfunding and an error margin for a project owner’s needs, the minimum effective amount that can be used for the development of a project is 75 percent of its initial funding target. The project owner will receive the funds only if the funding can reach this minimum funding threshold. If the 75 percent minimum funding threshold is not reached, then all pledges will be cancelled.

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What is the difference between investing through B-a-MedFounder and making an Angel investment?

Investing through B-a-MedFounder is a new approach to funding new medical device projects. Conventional Angels usually meet the entrepreneur and can discuss the project and the terms of their investment with them to receive a slice of the company that they are evaluating. In the conventional Angel investment process, there is one or a small number of Angels that invest in the same project. B-a-MedFounder is a crowdfunding system, which means that anybody who finds a project attractive can invest. Project ideas from countries far from yours can be displayed in the B-a-MedFounder virtual showroom, and many people from several countries can invest in these projects. Donors do not become financial partners of the company that they donate to.

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Why should I invest in a project?

By investing in a project displayed in the B-a-MedFounder virtual showroom, you benefit in the following ways:

  • You can own equity (shares) in a start-up company
  • You can be one of the early investors in one or more of the upcoming and very successful medical device start-up companies
  • You can help thousands of patients
  • You can help someone to fulfill his or her dream of developing a medical device

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How can I know if a project is genuine and the project owner has the ability to develop the project?

Although our project reviewers (experts) review the medical and technological aspects of the projects, and we display the most promising ones in the B-a-MedFounder virtual showroom, it is up to you to assess the project and the people behind it before you decide to invest. In cases where equity is offered as incentive, even if you are an experienced investor you should do your own research, ask questions to the project owner and use your own judgment before investing.

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The materials posted on the project profile page may not contain enough information or data for me as an investor to feel confident to invest in that project. Is it possible to request additional information from the project owner?

All projects are displayed in the B-a-MedFounder virtual showroom for a period of ninety days. The ninety-day active funding period has been created to allow investors sufficient time to evaluate the idea as well as the people behind the project. This ninety-day window has also been established for you to make a pledge. If you need additional information about a specific project, we recommend that you post a question through the project’s discussion board during this period. The project owner is required to provide the information you’ve asked for within four days of receiving your inquiry through the discussion board. This also allows time for others in the crowd to view the posted questions, and then the answers, as well as the comments that are posted.

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How does the B-a-MedFounder system work in projects offering equity?

Each registered start-up company with a project offering equity for raising funds through B-a-MedFounder shall have an initial funding target (i.e. USD 120,000), a final funding target (i.e. USD 180,000) as well as a minimum funding threshold (75% of the initial funding target - i.e. USD 90,000). The initial funding target represents the amount of funds that is initially needed by the project owner to start or develop further the proposed project. The minimum funding threshold represents the minimum level of funding that a project needs to achieve for starting the project, until further funds will be available. The final funding target, on the other hand, represents the maximum amount of funds that a project owner is willing to raise assuming that there will be sufficient level of demand for a project’s funding round. (Please note that all numbers are before the B-a-MedFounder success fees and MangoPay transaction fees are deducted from the funds raised.)

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Can a project raise more money than its initial funding target?

Yes, and some often do. In projects offering equity as incentive, the upper funding limit (final funding target) is pre-determined by the project owner at the outset. In cases where there is strong demand in a project’s funding round and hence the initial funding target is exceeded, the project owner will provide a higher percentage of equity to the investors while the pre-money valuation is kept at the pre-determined level.

Please also note that the upper funding limit (final funding target) of a project offering equity as an incentive will need to be within the certain pre-set limits. Please contact us for specific inquiries pertaining such pre-set limits.

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What happens if the total pledged sums remain well below the initial funding target?

B-a-MedFounder is not an “All-or-Nothing” fundraising site. However, none of the investors will wish to give their money if the initial funding target is not approached. The money is invested for the purpose of developing the new medical device idea and not for other expenses. However, when 75 percent of the initial funding target is reached by the end of the listing period, we will release the pledged funds after verifying that all necessary documents have been completed, and after our success fee and the MangoPay transaction fees have been deducted.

When 75 percent of the initial funding target is reached, we encourage the project owner to try to find additional investors, friends, and family members to invest in their project and reach 100 percent, and pay less success fees to B-a-MedFounder. (See the relevant question in FAQ).

Although B-a-MedFounder will make more money if the total pledged sum remains between 75-99 percent of the initial funding target, we prefer to have the project owner collect the maximum necessary funds for his or her project, and that he or she is successful and comes back again for the next step of the project and look for additional funding through us.

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What happens to the pledged sums if the minimum funding threshold is not reached?

All total pledged sums that are below 75 percent of a project’s initial funding target by the funding target date will be cancelled and payments submitted through MangoPay will be refunded. Please see further details in the relevant question on this subject.

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Can the project owner change the funding target(s)?

This is not allowed. Once a project is displayed in the B-a-MedFounder virtual showroom, the project owner cannot change the funding target(s). However, the project owner can retrieve his/her project and start the entire process from the beginning with new funding target(s).

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As an investor, how do I make a contribution?

After you enter your pledge amount in the dedicated field on our website, you can submit your pledge through MangoPay.

In equity based projects, pledges will be submitted via MangoPay in the form of actual payments using credit cards (Visa or Mastercard) and such payments will be refunded in case 75 percent or more of the initial funding target is not reached by the funding target date. On a daily basis, you can follow the project’s pledge activity where you’ve made an investment.

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Do investors and project owners have to use MangoPay?

Yes. Investors are required to use MangoPay to make a contribution to a project with their credit cards (Visa or Mastercard). Project owners are also required to have MangoPay e-wallets in order to receive funds after the successful completion of a project’s funding. B-a-MedFounder has an arrangement with MangoPay for the receipt and administration of pledges during a project’s funding period, as well as the disbursement of such pledges to the project owners at closing, assuming that the project reaches or exceeds its minimum funding threshold.

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In which currencies can I make an investment?

In equity-based projects, project owners are currently only allowed to select U.S. Dollars as their funding currency when they submit their projects; such projects will be open for pledges from all countries except those that limit equity-based crowdfunding or have restrictions regarding the use of MangoPay’s payment services. Please see relevant explanation in the Project Owner FAQ.

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Can I cancel my pledge?

No. In equity-based projects, you are requested to make a definitive payment at the time you submit your pledge and such a payment will only be refunded in case the project does not reach its minimum funding threshold.

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Can I add to my pledge?

On a daily basis, you can follow the project’s pledge activity where you’ve made a contribution. If you wish you can make additional pledges to a project. However, please note that an investor can only make up to four pledges to the same project during the active funding period.

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Can my pledge be refused by the project owner?

The project owner has the right to refuse pledges from persons who have a contradicting interest with the project. Such persons can own or work in a company that may compete with the project they are investing. B-a-MedFounder will send each project owner a list with the names, locations (country) and pledge amounts of all investors that participated in a project’s funding round and will ask them to get back to B-a-MedFounder within 48 hours with requests to exclude any of the investors that made a pledge to their projects.

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Are there minimum and maximum amounts applicable to individual investments?

The minimum investment through B-a-MedFounder is set as USD 5,000 while there is no upper limit set for investments.

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Will you share the personal information of the investors?

No. The personal information of the investors will not be shared with third parties. However, the names, abbreviated surnames and locations (country) (i.e. John B., United Kingdom) of investors that have made a pledge to a specific project will be visible through that project’s dedicated profile page on our website. Furthermore, the full names and surnames, email addresses and other pledge details of the investors will be disclosed to the project owner for his/her approval before the closing of the funding round takes place. Please see more details in our Privacy Policy.

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If I am not a resident of a European Union member country, how can I know if I’ll be able to invest in a project displayed on B-a-MedFounder?

If you are not based in the European Union, you can invest in equity-based projects through B-a-MedFounder, but be aware that you do so at your own risk. As a non-European Union citizen you must strictly adhere to the laws of the country you are legally residing in.

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Does B-a-MedFounder take a percentage of ownership or intellectual property from the projects displayed on the website?

No. B-a-MedFounder does not take any percentage of ownership in any of the projects or in the intellectual property (“IP”) of the projects displayed on its website.

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