We've got important news for you! We're honored to have received the Crowdfunding Best Practices label by FinanceEstonia and Law Firm Deloitte Legal. Also, we have updated our business model and decided to start participating in invoice auctions, further aligning our interests with those of investors.
What is the Crowdfunding Best Practice?
FinanceEstonia and Law Firm Deloitte Legal in Estonia have drafted a Crowdfunding Best Practice, which aims to turn the ever increasingly popular crowdfunding platform providers´ activities more transparent for the clients and investors.
“A number of the platform providers´ activities in Estonia are not hit by financial regulation. The Best Practice provides behavioural guidelines for the platforms to ensure increased transparency and clarity for their clients,” explained the Head of the FinanceEstonia Crowdfunding Expert Group and Law Firm Deloitte Legal attorney-at-Law Merit Lind.
It is mainly the clients that will benefit from the Best Practice. “If a crowdfunding portal provider has joined the Best Practice framework and fails to comply with its rules or explain non-compliance, the investors will have more information to decide on the credibility of the particular platform provider,” said Lind from Deloitte Legal.
All Estonian crowdfunding platform providers can apply to join the Best Practice. The Best Practice quality labels will be issued annually and the first ones were issued on 30th May 2016. Investly stands among four other Estonian platforms that have received the label. Click here for the full text.
Investly now has skin in the game
skin in the game: to have a personal stake or investment
- We will not be prefunding invoices. Investly will be making bids alongside investors.
- To ensure a good return for investors, we will not be adjusting our rate downwards if the auction rate falls.
What you need to know:
- Our credit team runs thorough checks on all companies interested in selling invoices. Among other due diligence, this involves also checking their bank statements.
- Normally the business buying the goods or services is a large company, which decreases the credit risk.
- In addition, we ask buyers to confirm invoices. This is to ensure the validity of the invoice.
- As a safeguard, we also have the right of recourse (asking the seller to repurchase the invoice) in case of invoice disputes or repayment difficulties of the buying company.
- In order to provide invoice financing to businesses with shorter trading history, we might also require director’s guarantee from the seller company as an additional risk management measure. In all cases, the main is risk still on the buyer side, where we need higher turnovers and longer trading history.