The CONDA Investment Guide

Decide for yourself whether the business has a chance and an investment is of interest to you.

Rely on your own judgement

An investment in a new enterprise entails, not only potential rewards, but risks as well. When assessing a project you should rely on your own judgement and gain an understanding of how the business intends to generate profits in future and whether this is realistic.

Make your assessment in a systematic way

To support your evaluation, the necessary information is made available in a clear, structured arrangement on our platform. Through the consistent presentation of relevant information you are able to compare and contrast projects directly with one another, helping you make the right investment decision.

1. Assess the Business Plan

A variety of key information regarding each business are made available to you, as a basis to make your assessment. It may be helpful to take the following 6 criteria into consideration when evaluating a business.

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Unique Selling Proposition

A key criterion that should be considered, among other things, is the unique selling proposition.

Consider what makes the product or service unique. The following questions may be helpful:

  • How high is the quality of the technology or the innovation?
  • Is there already a patent for it, or how easy is it to copy?
  • Does the product or service offer a significant advantage compared to the competition?
  • How sustainable is the technology or innovation?
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Business Model

A further criterion is the credibility of the business model.

  • What business strategy is the company pursuing?
  • Does the business have a vision?
  • How convincing is the product strategy?
  • How much of a lead does the business have over the competition?
  • How transparent and reliable is the finance strategy?
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Marketing and Sales goals

At this point it is worth considering how the business or product is being introduced to the market.

  • Are the target markets clearly defined and is the market entry explained credibly?
  • Does the sales planning seem realistic and is it achievable in the given time period?
  • Is the market potential realistic in your eyes?
  • Are the target groups clearly defined and differentiated from one another?
  • Do the planned steps for market entry will lead to the targeted results?
  • Does the business have an existing network (suppliers, manufacturers, distribution partners, cooperation partners, etc.)?
  • Is the team set up well enough and are there enough resources available for the market entry?
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Market Situation

Businesses normally have a number of market opportunities, which they initially investigate first of all, then evaluate and subsequently compare with each other. To achieve this they require values such as, the size of the market, the previous growth of the market or the market potential.

For your investment decision you should ask yourself the following questions:

  • How large is the market and is the market size defined reasonably?
  • How quickly will the market grow?
  • Is it part of a trend?
  • How is the competitive environment in these markets?
  • Is there enough market potential to admit further market participants?
  • Are there technical, legal or financial barriers to entry? If yes, how significant are they?
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Team

Finally, in order to the proposed business model described and make the project successful, people with the right expertise are needed in the right positions. Therefore the reason you should study the team behind the project closely.

  • What qualifications and expertise do the team members possess?
  • What have these people achieved previously?
  • What positions are there in the business and who holds these positions?
  • Can the business attract further qualified staff in the future?
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Funding and Target figures

An evaluation of the market development is as important as the assessment of the funding and the financial forecasts.

To make such an assessment, you must familiarise yourself with the hypotheses used by the start-up team, the appraisal of the costs of implementing these. You can ask yourself the following questions:

  • Can the business make a profit by reaching the budgeted sales and turnover targets?
  • Does the business have enough liquidity and wealth to fund the relevant milestones?
  • Does the business have liabilities which could compromise liquidity in the short-term?
  • Are the steps for a possible follow-up funding estimated realistically?

2. Discuss the Business Plan in the Investors Room

For each project there is an Investors Room, where you have the opportunity to discuss critical points in the business plan with other investors, your exchanging views and asking questions. The exchange between experienced and new investors should support personal investment decisions.

3. Read the Shareholder Contract

On the project page you will find the shareholder contract of the business for each project.

For a quick overview of each shareholder contract used and the contract elements, pay attention to the following symbols:

 

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Contract version

Every CONDA shareholder contract is based on a standardised model contract. These can be easily identified from the version number.

Contract 1 indicates a contract for participation rights, contract 2 is for a subordinated loan contract.

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Head office

Every model contract is adapted to the relevant legal conditions of the country in which the business is resident. The flag of the country gives you a quick overview of the respective location of the business head office.

In addition there are symbols which describe core elements of the shareholder contract:

crowdfunding Unternehmenswertbeteiligung
Regular interest payments

This symbol shows you that you have the right for regular interest payments which, in an ideal situation, are paid annually. The exact conditions (height of the interest rates,  etc.) are available to see in the relevant shareholder contract.

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Bonus for increase in value

If you see this symbol, you are entitled to a percentage share of the increase in the business value. This will be paid out at the end of the contract life. The precise conditions are to be found in the relevant shareholder contract.

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Lead Investor

This icon shows that the business has a lead investor. This investor supports the project both financially and through his know-how, in terms of strategic direction.

Risk information

The acquisition of an investment is linked to significant risks and can lead to the complete loss of the money invested. As a general rule: the higher the potential return or the yield, the higher the risk of a loss.