Questions for investors

Also. But if by making the donation you sign a contract to receive equity in a for-profit company, it becomes a very effective method of injecting capital into a company. That's why we're here.

Equity crowdfunding allows investors to fund a startup or business in exchange for equity (shares) in that company, meaning they become partial owners. This offers the potential for profit if the company succeeds. 

On the other hand, traditional crowdfunding, such as reward-based crowdfunding, typically involves supporting a project or company in exchange for non-financial rewards, like a product or service. 

With equity crowdfunding, you’re investing for potential financial returns, while with traditional crowdfunding, you're often backing a cause or project without the expectation of financial gain.

At Capital Cell you will be able to put your money directly in the hands of a person or company that wants to develop a specific project, and that will offer you a part of its future profits in exchange. Your money will be added to that of other investors until they have enough to start the project.

You will be the one to decide how much money you are going to invest and you will be able to choose from a multitude of projects in the world of Health and Biomedicine.

In addition to giving you control over where your money goes, of course, the great advantage of crowdfunding is the possibility of extraordinary returns; by diversifying your investment appropriately, you can enter into projects that can multiply your money by 10 or 20 times in a few years.

But beware: You are buying shares in a company that is just starting to operate, and that in a short time could go from being worth very little to having a high market value. However, if the company does not perform well, you may lose your entire investment.

It is important to emphasize this: the essence of investment crowdfunding is to have the opportunity to make small, high-impact, high-return investments, even though you know that some of them may not pay off. Some of your investments will make a lot of money, but it is almost a certainty that you will lose some of your investments. Get used to the idea before you invest.

IN FIGURES: Typically, you are making an investment whose return will be in the order of 200-1000% but which you will not be able to recover for 2-6 years, and which has a 1 in 3 chance of making a profit.

First of all, we would like to clarify that, that although the payment of the investment is made on the spot, your money will go neither to Capital Cell nor to the company you invest in, but remains in the custody of a financial institution authorized by the financial authorities. The money will only be handed over to the company when the financing round is completed and when the company has officially registered the capital increase. If not, the money will be returned to you free of charge.

Why do we need you to make the payment? We believe that financing a company requires certain guarantees that the committed funds really exist, so at Capital Cell we ask for the utmost seriousness when committing to invest.

In this way, the company knows that it will have the committed capital when the time comes to launch the project – provided the fundraising objectives are met – and the investor knows that the money will not reach the company until the minimum amount necessary for the project to be viable is raised (and the transaction is registered before a notary).

We have put a great deal of resources and legal knowledge into creating a solid and fully guaranteed foundation for both investors and entrepreneurs. In addition to years of experience in online investments, Capital Cell operates under an ECSP (European Crowdfunding Service Provider) license from the European market authority, ESMA.

First of all, the checks prior to publishing a project are as thorough as possible, and we make sure that the person behind a project gives us sufficient assurances about his intentions and identity. If we have the slightest doubt about this – for example, if the Commercial Register tells us that a potential entrepreneur has six other companies that he has not mentioned to us, or if his business plan contains errors that seem too intentional, or if, in general, something smells fishy to us – we will not publish the project.

During the process, the money that is accumulated remains at all times under the custody of an authorized financial institution, which will only deliver it to the company once it has registered the transaction with a notary public.

Finally, a loan agreement or a partnership agreement is signed between the private investor and the entrepreneur, for the breach of which the entrepreneur may face very serious legal consequences. As far as possible, Capital Cell undertakes to take an active part in pursuing any contractual breaches that may occur.

In general, yes, we are mainly looking for projects that can offer a huge return to offset the relative risk involved in investing in early-stage companies.

Capital Cell takes a small commission on the capital it helps raise - 7% per project. We'd love not to have to do that, but we have to keep the site and the people who work on it.

At Capital Cell, we ensure that every project listed on our platform has gone through a rigorous evaluation process. 

All projects are analyzed in detail by our International BioExpert Network, which includes experts from different areas who evaluate biotech startups and early-stage life science companies based on their R&D proposals.

Furthermore, our internal committee at Capital Cell validates these opportunities to ensure that only the most promising companies, with coherent funding needs and well-structured pipelines, make it onto the platform. 

In fact, only about 1 in 10 companies that apply are accepted, so if they're on the platform, you know the investment opportunity is good, and you can make your investment choice based on your interests and which campaign resonates with you the most.

Investing in early-stage companies always carries inherent risks, particularly in the biotech and life science sectors. These startups are often in the early stages of development and may face significant challenges in their R&D processes, regulatory hurdles, or market acceptance.

It’s important to note that there is a high risk of failure, and you should only invest money that you are prepared to lose. However, successful investments can yield significant returns (enough to offset the losses and more) if the company’s technology or product reaches the market and achieves widespread adoption.

At Capital Cell, we clearly state the risks of each campaign on its campaign page, so you are fully informed before making any investment. We recommend diversifying your investments and conducting thorough research on each project, as this can help mitigate some of the risks involved.

However, as with any investment, the decision is ultimately yours, and careful consideration is key.

Yes, you can invest in multiple projects at the same time on Capital Cell. 

However, before you proceed, a test will be conducted to confirm your eligibility for each campaign. This ensures that you meet the necessary requirements and can make informed investment decisions across different opportunities.

Yes, there are potential tax benefits when investing in startups through Capital Cell depending on the country in which you reside. 

For instance, in Spain and France, there are specific tax incentives for individuals who invest in early-stage companies, such as deductions or reductions on taxes for investments in qualifying startups. 

To get more detailed information about the tax considerations in your country, you can explore our resources and updates on eligibility. 

For now, we’ve explored the tax benefits in Spain and France, and more information can be found here later.

Capital Cell cannot guarantee profitability. Start-up investments, like most others (including stock market investments), always carry risks. However, we have a strict, multi-step evaluation process to select projects with strong scientific and business potential, which is why we end up publishing such a small percentage of the proejcts that reach us.

Each project is first reviewed by an external network of specialists — the BioExpert Network (BEN) — who assess the scientific validity and market potential. This expert evaluation helps us understand if the project is viable from a technical and commercial standpoint, and is available to potential investors on the campaign page.

After the BEN evaluation, our internal investment committee reviews the project. They consider the experts’ feedback along with additional partner input (such as advisors and professionals from the world of business entrepreneurship) to decide whether to proceed, and any doubts are clarified in a call with Capital Cell's local investment director.

If the project passes the internal review, it undergoes two thorough external Due Diligence processes: Financial Due Diligence to verify the company’s financials, valuation, and share price to ensure they are accurate and reasonable; and Intellectual Property Due Diligence, to confirm the company’s IP protection and rights.

We also carefully check all documentation related to the campaign, confirming tax deductibility where applicable, and validating that investment commitments are backed by, at least, signed Letters of Intent.

Last but not least, we verify the promoters’ credit history, tax and social security status, and professional background to ensure integrity. (Basically, we check that both the entrepreneurs and their projects are honest.)

Only projects that successfully pass all these steps are published on our platform, prioritizing projects that are scientifically sound, financially feasible, and led by capable teams, to give investors the best possible opportunity for success.

The European Crowdfunding Service Provider Regulation sets €5 million as the maximum amount a company can raise through a crowdfunding platform.

According to regulations, in order to invest more than €1,000 you must pass a very simple knowledge test. When you make your first investment above this limit, you will be asked to complete this test before you can do so.

You will always be provided with a risk warning and a test to confirm that you understand the risks of investing in startups, such as lack of liquidity, lack of dividends and the risk of losing your capital if the company fails to fulfill its business plan.

You can participate in businesses with very small minimum investments—under €1,000 most of the time, and even as little as €500 in some cases.

Bear in mind that these are high-risk (1 out of 4 companies is successful) high-reward (you can multiply your capital by 3, 10, 20...) investments, so keep these basic rules in mind:

• Do not invest a lot of money in a single project
• Diversify! Invest in more than one project
• Be patient. You probably won't see your money again for 3 to 6 years
• Both because you may lose your money and because you will not be able to get your money back whenever you want, the most important thing is that you should not invest money that you need to live on.

You can consult this series of tips to establish your own investment figure:

Tips for investing without making too many mistakes

In order to optimally structure your investments, we have chosen to use STAK (Stichting Administratiekantoor)—a type of Dutch company—as an investment vehicle.

Why use an investment vehicle?

Due to the high number of investors that participate in our financing rounds, is it necessary to group them together so that company meetings do not become unmanageable. In addition, a company with dozens or hundreds of investors that are not grouped together into a single legal entity will not be able to attract the Venture Capital funds it may need in the future.

Why STAK?

A STAK is a Dutch foundation that manages shares in the name of the investors. It is managed by a Board of Directors which includes an independent and impartial managing director.

The decision to to use STAK came after an in-depth study of all the possible investment vehicles in the Union European Union. It has the advantages of security, simplicity y fiscal efficiency, and we believe that it is the best way to legally group the investments for everyone involved (company and investors alike).

In everyday use, the STAK functions quite similarly to a holding company, allowing flexible management of voting rights and distributions. Investors receive certificates that represent their voting and economic rights (such as dividends), but it is the STAK that legally owns the shares. This separation between the legal ownership of the shares, held by the STAK, and the economic rights, held by the investors, is very common in this type of investment.

STAK has significant advantages over other types of investor groupings:

• Separation of rights: The STAK is the legal owner of the company's shares, while you, as shareholder beneficiary, hold the economic rights. This separation simplifies the management of your investments. (In simple terms, the STAK deals with the legal hassles, you get the money.)
  
• Transparency: in most European countries your investment is still eligible for tax deductions even if it goes through STAK.
• Independent administration: the STAK is managed by a board of three directors, one appointed by Capital Cell and and two independent directors in charge of the audit and supervision of the STAK's activities. This guarantees an impartial and stable management that is aligned with the investor's interests.
• Security: The STAK is an independent legal entity. This means that, even if our crowdfunding platform were to disappear, the STAK would continue exist and manage your investments independently.
• No taxes on profits: Unlike other common types of syndications (such as the limited liability companies, or LLCs), STAK does not pay any tax on the future profits from the sale of the company.
• Transactional ease: You will be able to sell your "shares" in the STAK without the need for notaries or complex transactions. All you have to do is find a buyer, carry out the transaction and inform us so that we can change the ownership of the shares.

In choosing STAK as our investment vehicle, our objective is to offer a our investors a robust, secure y flexible structure, aligned with their long-term interests.

The premoney valuation refers to the estimated value of the company before any new capital is added from the campaign. This value is validated by the lead investor of the round.

Equity offered refers to the percentage of company ownership that investors will collectively receive in exchange for the money they invest.

The estimated exit refers to how and when investors might eventually see a return on their investment — typically through an "exit event" such as:

• Acquisition: Another company buys the startup.
• Initial Public Offering (IPO): The company goes public and shares are sold on a stock exchange.
• Secondary sale: Shares are sold privately to new investors or another fund.

In our campaigns there is usually a discount for early investors and/or for those who invest a high amount. This discount is applied to the price per share.

Yes, you can invest as a legal entity. Simply choose this option during the investment process and in addition to your personal details we will ask you for your company details.

At the end of the investment process we will ask you to choose your payment method. If you choose credit card (Visa or Masterclass) you will be redirected to the payment platform. If you choose bank transfer we will give you the details to make the transfer, which we will also send you by email and which you will be able to consult in your user area.

Once you have made your contribution, you will have 7 days to retract it, in which case, Capital Cell will give you your money back with no questions asked. Once these 7 days have passed, you will only be able to get your money back by negotiating directly with the company.

The campaign must reach 100% of its funding target for Capital Cell to transfer the funds to the company.

If the target is not met, the campaign will be canceled and all committed funds will be returned to all investors free of charge.

Capital Cell performs a multitude of checks on the proposals it receives, and we try to ensure the integrity and honesty of all projects that are published.

In addition, the investment includes the obligation for the company to issue a quarterly report on the progress of the project.

That said, once the project is underway, there is little we can do from here to INFLUENCE the progress of the companies, which is why we make sure that all the companies have at least one reference investor who is responsible for ensuring the smooth running of the project. 

But if in the future you have doubts about how a company you have joined Invested is behaving, and you do not have a lawyer to turn to, write to us and we will do our best to give you a hand.

Some projects incorporate future salary limitations in the partner agreement. Check before you invest.

In addition, you will receive the company's accounts once a year. If it is obvious that the company's profits are being wasted on inflated salaries, you have every right to report this to the authorities (or to ask us for help), who monitor that a company's salaries do not cause it to make a loss, nor decapitalize it, and that they are in line with the salaries offered by the market.

Basically, your shares can be bought and sold, with some limitations depending on each particular company. Generally, the preferential right of purchase of the company and its founding partners must be respected, which means that if you receive a purchase offer for your shares, you must give the company and other existing investors the opportunity to buy them first.

As the mechanisms for this are set out in the Investment Agreement that you sign when you take the shares, we recommend that you read it carefully.

On our platform you have a secondary market where investors interested in selling can get in touch with those interested in buying.

In certain cases, you may be required to sell your shares if the company’s shareholder agreement includes a drag-along clause.

This clause allows majority shareholders to compel minority shareholders to sell their shares if the company is being sold, ensuring the buyer can acquire 100% — or at least a controlling stake — of the business.

For small investors, this means they could be obliged to sell their shares under the same terms as the majority, even if they personally disagree with the sale.

However, this also ensures that minority shareholders are not left behind and can benefit from the same exit opportunity and financial conditions as the main shareholders, often at an attractive valuation.

The rights and obligations of the company are well specified in the legislation and the processes that are put in place in such cases are fairly standardized; it would be normal for the company to complete the liquidation and you can deduct THE AMOUNT INVESTED as losses on your tax return PROVIDED THAT YOU HAVE GENERATED GAINS IN ANY OTHER INVESTMENTS.

In case of doubt, we recommend consulting a tax advisor AS DIFFERENT COUNTRIES HAVE DIFFERENT PROVISIONS ON HOW TO COMPENSATE INVESTMENT LOSSES.

There are 5 scenarios in which you must declare your investments to the tax authorities:

1. In case you sell your shares and have generated a profit.
2. In case you sell your shares and have generated a loss.
3. In case of being subject to the filing of wealth tax.
4. If you have Invested in a non-Spanish company and you are subject to the declaration of assets abroad.
5. If you have Invested in a company that offers tax incentives under the concept of "Innovative Start-up Company".

If your particular case fits in any of the above assumptions, you must inform the Tax Authorities by means of the corresponding informative forms in each case.

Please seek the advice of a tax consultant or a tax expert to help you prepare the necessary documents to properly fulfill your tax obligations with the tax authorities.

You can deduct an investment if the following requirements are met:

1. You have Invested in a company certified by ENISA as an innovative start-up company.
2. You and your first and second degree relatives do not hold more than 35% of the capital of the company.
3. You are a tax resident in Spain.
4. Your investment has been channeled directly into the capital of the company, i.e. you have not Invested via a special purpose vehicle or SPV.

* In Capital Cell, if a company offers tax incentives we will always announce it in the same investment campaign.

Yes, if you are eligible to declare your wealth according to the requirements of your country of tax residence, then all newly acquired assets must be included in the annual wealth declaration.

Yes, you will be able to declare a loss on your investment so that Hacienda can compensate you with other gains generated in other investments. Hacienda gives you up to a maximum of 4 years from the filing of the loss to generate other capital gains.

You must keep the following documents:

1. Investment agreement signed with Capital Cell.
2. Notarized document of capital increase in which your name will appear.
3. Bank receipt certifying the transfer of funds related to your investment.
4. Certificate from the company in which you have Invested confirming that it complies with the requirements to offer tax incentives to its investors.