Frequently asked questions for Investors
A startup is an early stage high-growth company using technology and innovation to tackle a huge, usually global, market. The defining feature is the use of disruptive innovation to reshape the way entire industries work by using technology and business model innovation to displace established competitors.
Jelix investors must qualify as a ‘sophisticated’ or ‘wholesale’ investor in Australia or the equivalent in their country of residence. In Australia, a sophisticated investor provides their qualified accountants certificate confirming that they have net assets of no less than A$2,500,000 or a gross income for each of the last two financial years of at least A$250,000 per annum (the amount specified under regulations 6D.2.03 and 7.1.28 of the Corporations Regulations 2001). The certificate must not be more than 6 months old.
If you are not a resident of Australia, then you must meet your country’s income, asset, and/or experience criteria.
Our compliance team may contact you as part of our verification process.
An angel investment syndicate is a group of people or entities that invest together in an early stage startup on the same terms. Angels invest early to take advantage of low prices and valuations. These Angels take on the early stage risk in return for a potentially super high return. To mitigate and spread risk, angels invest together in groups or syndicates, with each angel typically making many smaller investments to develop a diverse portfolio. An online equity crowdfunding platform makes the process easier.
The Jelix equity crowdfunding platform is different in that:
- we invest our own funds;
- our investment opportunities are highly selected and rigourously vetted;
- you invest alongside us on the same terms; and
- our investment opportunities are only available to accredited investors.
‘Equity Crowdfunding’ is where funds are raised by aggregating relatively small investment amounts from a large number of investors to finance a business, usually a startup.
An online equity crowdfunding platform makes the process of syndicating ‘angel’ or ‘early stage’ or ‘seed’ investments into startups easy and usually extends the investment opportunity to the public, or the ‘crowd’.
The Jelix platform is different in that:
- we invest our own funds;
- our investment opportunities are highly selected and rigourously vetted;
- you invest alongside us on the same terms;
- our investment opportunities are only available to accredited investors; and importantly,
- we do not take fees from startups to raise funds for them. Instead, we are incentivised by investment-performance-weighted fees and investing our own funds to select startups in the strongest position to produce outsized returns.
Yes. You must provide the exact legal name of the individual or legal entity, including the trustee of your trust, or self-managed super fund together with the name(s) of the authorised signatory(ies) and evidence of their current authorisation.
Individual investments via the Jelix platform: AUD$10,000.
The minimum investment in the Jelix early stage venture capital fund depends on the terms of the fund.
You can make your investment commitment on our platform. Go to the top of the particular investment opportunity details to be guided through the process. Or, you can simply email email@example.com.
One successful Sydney angel investor who has made over 70 angel investments, advises that psychologically he ‘posts angel investments in a post box’ and never expects the funds to ‘return’. This is sound advice. Angel investing is high risk. While Jelix’s rigorous approach to risk mitigation can help you minimise risk and increase the probability of making outstanding returns, you must always be aware that you can lose your investment entirely.
Our founders approach to risk mitigation was cemented in her earlier climbing career. Flushed with pride after leading a particularly hard climb she was devastated when her belayer, a world class climber, summited angry. Instead of placing the best protection available she had made a merely adequate placement. Andrea learned a lesson now imbedded in her DNA, that in taking risks in pursuit of outstanding rewards, maximum risk-mitigation is critical. This approach is the bedrock of Jelix’s investment strategy. It underpins Jelix’s investment selection, due diligence and deal structuring processes, all of which are informed by the collective expertise of the Jelix team in investing, founding and running startups, acting as board directors of startups at various stages, global investment banking and the law.
To mitigate risk, wise investors:
- build a diverse portfolio, across time, company stage and sector and only invest in opportunities with the potential to produce outstanding returns (this is where Jelix can help you) sufficient to produce the returns you require from your entire startup portfolio.
- invest in startups as a proportion of their portfolio, with the majority of their investments in lower risk and more liquid assets.
Successful angel investors suggest investing small equal amounts into a minimum of 20 early stage startups over two years.
Startups usually re-invest profits to accelerate growth to build longer term value for investors. So even if the company performs well you are unlikely to receive dividends, at least for some years.
Future fundraising will dilute the percentage of all shareholders’ equity unless they invest the minimum amount in the next investment round to prevent dilution. Dilution can also affect voting rights, dividends (if any) and value.
Risk Warning Statement
Investment opportunities offered by Jelix on this platform include new or rapidly growing ventures. Investment in these types of ventures is very speculative and carries high risks.
You may lose your entire investment, and must be in a position to bear this risk without undue hardship.
Even if the company is successful, the value of your investment and any return on the investment could be reduced if the company issues more shares.
Your investment is unlikely to be liquid. This means you are unlikely to be able to sell your shares quickly or at all if you need the money or decide that this investment is not right for you.
Even though you may have remedies for misleading statements in the offer document or misconduct by the company, you may have difficulty recovering your money.
There are rules for handling your money. However, if your money is handled inappropriately or the person operating this platform becomes insolvent, you may have difficult recovering your money.
Ask questions, read all information given carefully, and seek independent financial advice before committing yourself to any investment.
1 Angel Investing, David Rose, pg.3
Jelix does not issue shares; the investee company issues shares.
Jelix no longer uses unit trusts to hold syndicated investments because they are expensive to establish and maintain.
On the advice of our lawyers and accountants, Jelix has established a nominee company (for more, see FAQ below) to hold our syndicated investments on behalf of investors. Essentially, the aggregated investment amount is invested in the Jelix nominee company which in turn invests it into the investee company. The Jelix nominee company simply holds the legal title to the investments, while investors maintain the full beneficial entitlement to their investment.
This provides our portfolio companies with a single entity on their capitalisation table, representing the entire Jelix syndicate’s investment. This is important because too many investors on an early capitalisation table can be an impediment to future funding rounds which can impede investee company growth.
When the company is acquired or goes public.
Some bigger startups do trade on a secondary market to get liquidity for early investors and staff, however, this is not currently usual in Australia. While we do expect a secondary market to eventually develop over time, investors should not rely on this.
We focus on deep technology companies in a variety of sectors providing the opportunity to build a diverse portfolio.
We invest considerable time and effort into getting to know the founders and their business. When it is too early to invest immediately this process can be over a year or longer. Then we carry out our formal due diligence process researching the company thoroughly including analysing the market and corporate strategy. This will often include a specialist technical due diligence report. The proposal is then submitted to our investment committee comprised of experienced entrepreneurs and angel investors.
Yes. You will receive quarterly investment updates which you will soon be able to view on your Jelix investor dashboard at any time.
Founder retention provisions, 1x liquidation preference and follow on rights. However, the terms of each investment round vary according to circumstances. Jelix invests on the same terms as you.
It is important that startups do not have too many investors on their capitalisation table because this can be an impediment to future fund raising and therefore company growth. (It is also time consuming for founders to communicate with too many investors. Instead, Jelix communicates with Jelix investors for our portfolio startups.)
So on the advice of our lawyers and accountants, Jelix established a nominee company which acts as a single shareholder on the investee startup’s capitalisation table, representing all the Jelix investors’ interests.
Instead of our syndicate members investing directly into our portfolio startups, we all invest through the nominee company, Jelix Ventures Nominee Limited (“the Jelix Nominee”). The Jelix Nominee holds the legal title of ‘Jelix’ investments. The sole purpose of the Jelix Nominee is to hold assets on behalf of our investors and ourselves; it does not trade in any way. Our investors will always retain beneficial ownership of their investments and retain the right, at any time, to require the transfer of the legal title back to them. Should Jelix Ventures cease trading, the assets held by the Jelix Nominee will be transferred back to the investor, as beneficial owner, who will then directly hold those assets.
Where investors are eligible for the ESIC tax breaks we understand that the the CGT benefit should flow through to investors. However, investors may not be able to claim the rebate on the amount invested. Jelix does not take into account the specific circumstances of any investor. Prospective investors should therefore obtain professional tax advice that takes into account their specific circumstances before making the decision to invest.
This statement is necessarily general in nature and is not intended to be either a definitive or an exhaustive statement of the possible tax treatment of investing in companies through the Jelix Nominee. Please see the Australian Tax Office website for details of the tax incentives for early stage investors.
No. We do not take fees from startups to raise funds for them. We are incentivised by investment performance weighted fees and investing our own funds to select startups in the strongest position to produce outsized returns.