Risk Warning


1 Risk Warning Statement

We want you to be happy using our website (www.genervest.org), Platform (www.members.genervest) and mobile applications (the “Website”). To do this we need to let you know what the rules are, as by using it you are agreeing to them. These are our Terms of Use and they cover factors like legal protections, copyright policy, and liability.

2 Who we are:

Genervest SCE Limited, which is a European Cooperative Society (SCE) regulated under the European Commission Council Regulation No: 1435/2003 Statute for a European Cooperative Society. The cooperative is established in Croatia where financial services are regulated by HANFA, which is the Croatian Agency for Oversight of Financial Services.

Genervest SCE is not performing crowdfunding services and does not offer financial services. It is not a bank so does not need to be regulated as a financial institution. Genervestors can make loans and investments by becoming members of the Genervest SCE and investing in the Genervestee investments the cooperative has decided to invest in and listed on the Website (Website refers to the domain www.genervest.org).

3 How does it work and what type of investments can you make

Investments are made through our European Cooperative Society, Genervest SCE (“SCE”) and you do this by becoming a member of the SCE when you invest. You also become a Genervestor (Genervestors are the people who become members of Genervest SCE and lend money to or invest in Genervestees). There shouldn’t be much risk involved in this as membership does not carry any liabilities, you just get to share in any profits of the SCE. Your investment return is directly correlated to what you have chosen to invest in and the returns shown on the Website when you made the investment decision and signed the agreement. The SCE has investments on offer from Genervestees (Genervestees refers to any legal entity or person that wishes to receive funding from Genervestors and support services from Genervest) that have been carefully checked by our team but we can’t warranty anything at this stage.

Investment in these offers entails risks, including the risk of partial or entire loss of the money invested. Your investment is not covered by the deposit guarantee schemes established in accordance with Directive 2014/49/EU of the European Parliament and of the Council. Nor is your investment covered by the investor compensation schemes established in accordance with Directive 97/9/EC of the European Parliament and of the Council. You may not receive any return on your investment. This is not None of these investments on offer is a savings product and we advise you not to invest more than 10% of your net worth in crowdfunding projects. You may not be able to sell the investment instruments when you wish. If you are able to sell them, you may nonetheless incur losses.

The performance data provided for these offers are only estimates and may not be a reliable indicator of future results or performance of this investment, as well as the performance data that refer to the past and past performance is not a guarantee of future performance or a reliable indicator of future results. Please also keep in mind that any investment on offer may be affected by changes in currency exchange rates, which has an impact on your investment return.

The investments on offer will be:
Loans or mini-bonds (a form of loan to a company)
Shares in Genervestees

The risks are explained briefly below. Please be aware that there is a risk that a Genervestee may fail. Though we will take all steps we can to protect you, we do not yet have enough capital of our own at the moment to replace any lost money. With this in mind, please read the Genervstee project information and invest carefully, and only what you know you can afford. Diversify your investments and make sure you feel comfortable with what you’re doing, seek advice if you think it will help.
The investments are being offered from Genervestees. Their projects and businesses are in renewable energy, electric mobility or emission reduction and unless indicated otherwise, secured against assets (collateral) and of bank investment grade. If we aren’t happy we won’t list them.

4 What is diversification?

Diversification is keeping your savings in several places and in different types of investments. You may mix low-risk and high-risk. We have some low-risk loans and some higher-risk loans and the risk is matched by the interest rate.

5 Risks when investing in a Genervestee’s equity or funds

We will offer some equity investments, which means you buy shares. This type of investment may be higher risk, and it may be harder to get your money back or out, even if the companies you invest in are successful. This is because you will need someone to want to buy your shares off you before you can turn them back into cash again.
Liquidity in financial instruments refers to how easy it is to trade the instrument. In simple terms these shares may not be very liquid because they are not easily valued or tradeable, though we are developing the platform so that buying and selling your shares will become easier so we hope these shareholdings will become more liquid in the future. To summarise, equity investments can be illiquid and also they probably will not pay regular returns.
Why do people invest in equity in start-up companies if there are these downsides? Equity investments give you a chance to invest in what you believe in, both financially and ethically. You will own part of the company, and if it succeeds the value of your investment may increase significantly. People investing in this way usually expect quite a few to fail, but hope some will succeed and they will be part of something amazing. You may lose all or part of your money, or be unable to sell your shares and get it back, or it may become worth much more. The usual advice here is that you should only invest what you are willing to lose. If a Genervestee you invest in fails, neither the Genervestee – nor Genervest – will pay you back your investment.
We will offer funds when we are ready and these will help diversify risks, but whatever happens, risk will be there until we can underpin the investments offered on the Platform, and we are working on this.
There are two other factors to consider with equity investments:
On the equity investment side (not loans or mini-bonds) Genervest aims to help new companies and people setting up in business. These start-up businesses will reinvest their profits for the first few years at least and may not make any profits. Businesses do not have to pay dividends and probably will not until they are well established with good revenues. The way to get a return on your investment is likely to be by selling the shares after the company has become successful, either as the company gets sold to a bigger company, through an Initial Public Offering (IPO) or when another shareholder wants to buy your shares.
Start-up and new companies often need to keep raising more money by selling more shares during their early years. If you do not buy more of the new shares when they are issued then your own shareholding will become diluted and could become worth less. Equally your investment could become worth more as the value when new equity is sought may increase in a successful company. Being diluted will mean your voting power is less, your share of any dividends would be reduced and the value of your shares could be reduced. Pre-emption, non-dilution and other rights can protect you from dilution or value reduction, if you do not understand what these rights mean then you should seek advice. You can check details on the rights and how the company should operate by referring to a company’s Statutes (or Articles of Association).

6 Risks from loans and mini-bonds

Loans, bonds and mini-bonds (together called “Loan or Loans”) are similar instruments and are ways to lend money to a Genervestee. These ways are not the same as investing in a Genervestee as an equity investor through buying shares. You should expect to receive periodic interest, debt service payments and your initial investment back, either during the period or as a lump sum at the end of the Loan period (this is called “maturity”). Genervest will secure your loan as much as possible, usually through securing collateral from the borrowing Genervestee (the “Issuer”). This security is usually against tangible assets (real things) like the renewable energy equipment being bought with the money, and sometimes land and additional removable assets. We will not take security on assets already secured by another lender (like the Issuer’s bank) as the bank will have first call on these assets so it is unlikely they will offer much recourse for our Genervestors.
Issuers and Genervest create the Loan instrument (agreement) for each Loan and they will be the same for each specific fundraise but may be different for each Issuer. They can also be different for the same Issuer at different times. It is important that you read the Loan agreements carefully and check all the details before investing. Make sure you agree to the exact terms and conditions, including the amounts and dates of interest payments; and when the final repayment is made. Whilst we will take care to carry out careful due diligence on all Issuers, the fact remains that they are solely responsible for maintaining a good financial status and ensuring their ability to pay interest when it falls due, and to return Genervestors’ capital when Loans mature. Genervest does not issue the Loans listed on the Genervest platform and is not responsible for their performance.
Loans like this are not protected during this early stage of Genervest’s development and could represent significant risk. We therefore ask you to please think carefully about the risks when investing and seek advice if you have any concerns.
Loss of investment and interest payments
All businesses can find themselves in financial difficulty. Although many Issuers on the Website are established renewable energy businesses with secure revenues, they may still end up in financial trouble. So, investing in Loans may put you at risk of default if an Issuer becomes unable or unwilling to meet payments of interest and capital. If this happens you may lose some, or perhaps all, of your initial investment and not receive outstanding or future interest payments. Genervest will take steps to make sure this is avoided and support the securing of assets offered as security under the loan agreement.
In the unlikely event that an Issuer completely ceases trading, neither the Issuer nor Genervest will be able to pay back your investment at this stage. These Loans are not yet insured and they are not regulated by any financial conduct authority. As with the equity investment warning, we suggest that you should only invest an amount that you are willing to lose.
Investments in Loans through Genervest should be viewed as long term and illiquid investments.
Loans from Issuers on the Genervest platform may be transferable if specified in the Loan Instrument and we aim to make them transferable through the secondary market on the Platform during 2023. Please check what the individual Loan contracts specify for full details of transferability.
Interest rate and inflation risks
Usually Loans will pay fixed interest rates so, although they may seem good at the time of the investment however relative performance may be impacted by rises in underlying interest rates. If your Loan is held during an inflationary period the relative value at the end will reduce over time.
Limited redemption rights
Please note that the only way you will be able to redeem your initial investment is as specified under the Terms and Conditions of the Loan Agreement. Your capital will be locked up for the entire term of the Loan unless it becomes tradable. This will usually be over the course of several years.
Secured investment
Genervest will only include secured Loans on the platform unless otherwise set out in the Loan instrument, however recourse can be difficult to enforce.
Early call risk
An Issuer may include the right to repay your investment at any time prior to the formal repayment date, however this must be included in the Terms and Conditions of the Loan instrument. This may reduce the value of your investment.
Other people getting paid before you do
There may be other entities, like administrators, banks and employees, who will receive repayment first if an Issuer fails. We will aim to protect you by securing Loans with specific assets that are unsecured and have not been taken as collateral by other creditors when Genervest creates the Loan agreements. This means it is likely Genervestors, whose secured investments sit below all of the previously mentioned in the queue, may still have their initial investment and outstanding interest payments returned to them after higher ranked creditors are repaid.

7 Things you want us to change

If there is anything we should be aware of, or you think changes are needed please do tell us by emailing the Compliance Team .
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