Many small businesses in the U.S. go out of business every year. It is difficult to know how companies will grow, what changes might occur in the market, or the many ways a company can stumble. If the company goes out of business, your shares will be worth nothing. The securities offered on the OmegaPoint™ site are not publicly traded and may not retain any value. These investments are intended to be for investors who do not have a need for a liquid investment. Companies seeking private placement investment tend to be in earlier stages of development and have not yet been fully tested in the public marketplace. Investing in private placements requires high risk tolerance, low liquidity concerns, and long-term commitments. Investors must be able to afford to lose their entire investment.
It is important to read the investor documents but investors typically receive preferred shares issued directly by the company. These shares represent an ownership stake in the company. If the business is sold at some point, these shares entitle the owner to a percentage of what is earned in the sale of the business. In addition, if there is a dividend, you receive your share of the distribution. Investors holding shares of preferred stock are often paid out ahead of the holders of common stock on dividends or proceeds from a sale, up to a certain amount. When the 'preference' is equal to the amount the investor originally paid for the shares, the holders are said to have a '1x' liquidation preference. In other cases, investors may receive common shares, or convertible debt in the company. The rights of these investors will differ from above. As always, please review the offerings documents carefully to understand the investment. If you have questions or concerns, be sure to consult your advisors.
Minimum investment of $25,000 and maximum of $2,000,000
Currently, not through OmegaPoint Partners.
In many ways, an LLC is similar to a corporation: members of an LLC have an equity interest in the business, and his/her personal assets are separated from the debts of the company. However, investing in an LLC has significant tax implications compared to investing in a corporation. For example, an LLC provides pass-through taxation, in which the LLC's individual members are responsible for reporting and paying all taxes on the business profits that flow-through to them. Each member receives a Schedule K-1 annually from the company, reflecting his/her share of the business's profits or losses. These profits or losses must be reported on each member's personal tax return, and each member may be liable for tax payments even if he/she has received no proceeds from the LLC. Please consult your tax advisor for other issues that may affect your investment decision.
Issuers set the valuation of the company whereby there cannot be any assurance the valuation is accurate or in agreement with the market or industry valuations. Valuations are intended to be in line with industry comparable on a revenue and net profit basis.