Neon crowdinvesting - 2022 edition

After a first go at it in 2021 (topic Neon Crowdinvesting), Neon is starting another crowdfunding campain.

I had a look at the T&C and am writing this post to spare others the effort.
TL;DR: It doesn’t look great.

The shares being sold are non-voting. To earn money, you need to either (1) find a greater fool who buys them from you, or (2) wait until the company ever pays dividends.

However 4.3) of the T&C implies that the company can buy back your shares for their initial cost of 200F, plus 20F for each year you held them. After 5 years, this corresponds to a 8.5% compounding yearly interest.
Furthermore, 4.4) is phrased in such a way that controlling shareholders could effectively dilute crowdlenders to nothing over time.
And finally, 58% of outstanding shares are preferred shares, and nothing specified which conditions they got. Who knows how the dividend would be shared?

Thus in the end, you’re lending money to a startup who can decide to either pay a <10% interest rate at some point, or maybe not to pay, assuming it ever gets in a situation where it could pay back.

Is the deal as bad as I think it is, or are there constraints on Neon that make the investment attractive somehow?

Some numbers (not that it really makes a difference, given the T&C):

  • Outstanding shares: 375’667 divided in:
    • 93’336 common Shares, 227’746 preferred Shares, 29’585 non-voting shares.
    • this operation would issue another 25’000 shares for 200F each.
  • 151’000 clients, about 0.4 client/share.
  • 6m revenue, about 15F/share, or about 40F/client (this surprised me)

A post was merged into an existing topic: Neon crowdinvesting (2022)