ANGEL BUSINESS CLUB
|Club||The Angel Business Club a limited partnership incorporated in Luxembourg|
|Club Administrator||Angel Club Services SA being the General Partner of the Club|
|Club Services||The services provided by the Club from time to time including without limitation member events, investor education, access to our Participation Companies and the ability for appropriately qualified Members to participate directly in follow-on funding rounds by Participation Companies|
|Member||A Member of the Club|
|Participation Company||A company in which the Angel Business Club is the legal owner of share instruments issued to it in the furtherance of the Club’s business model|
|Participation Shares||Securities in a Participation Company, which are deposited with the Custodian|
Discretionary weekly allocation of Equity entitlements, determined by type of membership, made by the Club Administrator to Members.
|Share Entitlement||A right, which entitles the holder to require the underlying Participation Share (in certain defined circumstances) to be transferred to them.|
The Club is not suitable for everyone
The Club is intended for individuals with an interest in participating in unquoted businesses, which carry with them a high degree of risk and who wish to exchange information and market knowledge about this form of investment. You should only consider becoming a Member if you understand the Club’s business model, have sufficient expertise to understand the risks involved in angel investing and have sufficient financial resources for such investments to represent part of a balanced portfolio. If you are in any doubt whether you are suitable to become a Member you should seek the advice of an appropriately qualified financial adviser.
Depending on the jurisdiction in which you are based, Membership of the Club and/or the acquisition, of Equity entitlements or Participation Shares may not be legally permitted under applicable securities laws. If you are in any doubt as to your personal legal position, you should seek local advice from a lawyer or other appropriately independent qualified professional adviser.
Membership of the Club is not an investment
The Angel Business Club is a private members’ club whose members pay a capital contribution for its Services only. Services provided include member events, investor education, access to our Participation Companies and the ability for appropriately qualified members to participate directly in follow-on funding rounds by Participation Companies. As part of their membership package, the club may at its own discretion allocate free equity entitlements to its members.
Member capital contributions are used by the Club to provide the Services including payment of the Club's Administrator Angel Equity. Members may receive introductory payments in respect of new members they introduce
Your member capital contribution is payment for access to the services of the Club and does not entitle you to receive allocations of equity entitlements. Member capital contributions should therefore be regarded as an expense only. You should only pay The Angel Business Club an amount that you are willing to pay to obtain access to the Services. The cost of membership may be offset by the proceeds from sale of Equity entitlements, which may be allocated to you. However, these proceeds could be less than the member capital contributions paid by you and any amounts subsequently realised in respect of equity entitlements or the underlying Participation Shares, if any, could be less than the value attributed to those Equity entitlements at the time they are allocated to you.
If a Participation Company in which you hold a Equity entitlement or a Participation Share fails, neither the Club nor any of its advisors or partners nor any financial services compensation scheme will reimburse you for any loss, which you may suffer.
Portfolio Shares carry a high level of risk
As a Member, you may be allocated an entitlement to Participation Shares held by the Club, which can include shares in start-up, early stage, pre-revenue and other unquoted private companies. Participation Shares in such companies involve risks, including loss of value, illiquidity, lack of dividends and dilution, and you should hold such Equity entitlements only as part of a diversified portfolio:
- Loss of value
The majority of start-up and early stage businesses fail or do not scale as planned and therefore shares in these businesses may involve significant risk. It is therefore possible that Participation Shares may lose all, or part of, their value.
- Lack of liquidity
Liquidity is the ease with which investors can sell shares after they have purchased them. Participation Shares acquired by The Angel Business Club may not be sold easily and may not, either now or at any point in the future, be listed on a recognised market. Even if a Participation Company is successful it may choose not to seek a listing for its shares. Participation Shares held by the Club may be subject to restrictions on sale.
- Non-payment of dividends
Participation Companies are typically at an early stage of their development and may not pay dividends to their investors, choosing instead to invest profits, if any, in future growth. In case of a dividend payment to the Club, the Club is not required to pay such dividend on to a Member. Instead, the increase of value of a participation and allocation may be reflected in the capital account dedicated to each Member.
Any Participation Shares acquired by the Club may be subject to dilution at a later date. This will happen if the Participation Company concerned issues more shares after the original acquisition of the interest. The effect of the subsequent issue of shares will be to reduce the proportion of shares held by existing shareholders who do not acquire shares in the subsequent issue. This will affect rights to receive dividends, voting and the value of the shareholding.
Members are allocated rights over underlying Participation Shares held by the Club. These Share Allocations are in respect of Equity entitlements, which are derivative securities and you will not own Participation Shares directly. The Club will continue to exercise rights over those Participation Shares in the interests of the Members. Your Share Allocation is apportioned according to your class of membership and is not otherwise linked to your monthly member capital contribution.
Limited Marketability of Share Entitlements
Equity entitlements are not currently transferable through the Club and may have limited marketability. There can be no guarantee that you will be able to sell your Equity entitlements at an acceptable price, or at all.
Valuation of Share Entitlements
From time to time the Club will review the value it places on its underlying Participation Shares. Share Allocations will be made on a basis, which reflects this valuation, which may be higher or lower than the price at which Club originally acquired the Participation Shares. If you cease to be a Member, your Equity entitlements will be purchased from you at a Fair Value which will be determined by the Club in its absolute discretion, acting reasonably or, where permitted, the underlying Participation Shares will be transferred to you.
Purchase of additional Share Entitlements
From time to time you may be offered the opportunity to purchase additional Equity entitlements in addition to your Share Allocation. You are reminded that Equity entitlements are a high risk investment and that you should only purchase Equity entitlements if you can afford to lose the money invested. Any such activity should be undertaken only by those who are sufficiently sophisticated to understand the risks involved and make their own decisions accordingly. If you are in any doubt about the action to take you should consult an appropriately qualified independent professional adviser.
Any income or capital gains which you derive from sale of Equity entitlements or Participation Shares may be subject to direct or indirect taxation depending on the jurisdiction in which you are based. This will affect the net proceeds you receive in respect of Share Interests or Participation Shares.