In the last few months, we received multiple questions from our investors and fundraisers. The subjects of the questions vary from the investor test to the maximum amount an investor can invest. In this article, we will answer some of the most frequently asked questions.
The maximum amount for an investor
Dutch regulations allow a maximum of €80,000 in outstanding investments at any time per individual. If you have a joint (and/or) bank account linked to your account, you can request a joint account on Max Crowdfund. The maximum then doubles to €160,000.
It’s possible to request a joint account in your profile on Max Crowdfund. You can find it under ‘my preferences’. We will then process it in our system and increase your limit to €160,000. We often can recognize it by a bank account; if not, we need proof of this. This can either be a bill or an invoice with both your names on it.
Unfortunately, the Dutch regulations currently do not take into account so-called qualified investors. However, an exemption rule applies to investments of €100,000 or more in a single loan. Therefore, these are not included in the calculation of the maximum outstanding investment amount.
The above only applies to private investors. However, if you invest via a business account, there are no restrictions.
The investor’s test
The AFM obliges every Dutch crowdfunding platform to take an initial (extensive) investor test when crossing the €500 limit in investments. Upon passing €5,000, €10,000, €20,000 and €40,000, another (shortened) investor test follows.
The test should identify whether the investor has the necessary knowledge and experience to understand the risks associated with the project, crowdfunding in general and the specific platform. The test must also show whether the investor invests a responsible part of their freely investable assets in crowdfunding. An inventory must therefore be made of freely investable assets. The AFM considers that a responsible party is, in any case, a maximum of 10% of the freely investable capital.
The private round
The AFM requires that every investor has equal opportunities to participate. This is the so-called equality principle. Before an investment opportunity is opened, it must be available for at least 48 hours so that everyone can do their due diligence on the loan in advance. As soon as the loan is drawn up for a public subscription, the principle applies: first come, first served. The moment of confirmation of your registration applies to this. If there is still enough space for your registration at that time, this will be recorded, and the remaining space will be reduced.
A private round in which the fundraiser can invite his personal network is optional, which is the private round. We try to reduce this as much as possible because an almost fully paid loan is not what we want from our platform before it goes live to the public. We recently wrote an article about the private round, you can read it here.
As soon as the target amount is reached, the registration closes, and the reflection period of 24 hours starts. You can no longer change your investment during the cooling-off period, but you can cancel it if you wish. The AFM also requires this. During the 24 hours, you can still do some research after the investment, and if you don’t feel comfortable with the loan, you can still cancel it without any costs. Your registration will be final after the cooling-off period.
If the minimum amount has been reached, we will arrange the formalities and aim to activate the loan within 72 hours. The fundraiser will owe the interest and principal as specified in the repayment schedule from the moment of activation. This means that the investor will start receiving interest within 72 hours. The return will be paid out monthly or per annum, decided before publishing the loan on the platform.
We have a loyalty program for our investors. Whenever you invest in more loans or with larger amounts of money, you will receive a discount. You can read more about the loyalty program here.
The referral program
Did you know that you can earn money with your account on Max Crowdfund? We have a referral program, which means you have a unique link to the Max Crowdfund website. If people create an account and invest money in a loan, you will receive 1.25% of their investment during the first 180 days. On the other hand, your friend will get a 0.5% discount on their investments during the first 90 days. On top of this, when your friend applies for fundraising and their loan is approved, you will also receive €100-.
Communication from Max Crowdfund
Whenever a new loan is published on our website, we send out a newsletter containing all the new loan information. This is mostly 48 hours before the loan will go live on our platform so that people can do their due diligence and make a well-considered choice whether they should invest in the loan or not. Besides the newsletter, we will always post our loans on our social media channels. So keep an eye on our channels if you want to be up to date on our loans.
You will always receive an email from Max Crowdfund when you have invested in a loan, which states that the 24 hours will start and that you have the opportunity to cancel your investment. After 24 hours, you will receive an email saying that the loan is fully subscribed, and as soon that all conditions have been met, the loan will be paid out to the fundraisers. Then, each month for the loan term, you will receive an email saying that the interest will be paid out to your Max Crowdfund account.
We value transparency and clarity at Max Crowdfund. Besides, we want to keep our investors and fundraisers up to date with all the news about the loans on our platform. We are always transparent with our fees, so you will never have unexpected costs.
Written by: Julia van der Kooij