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Invesdor - Ready for New Cross-Border Growth

Invesdor has merged with an Austrian crowdfunding platform and is now ready to launch its renewed growth plan and the new Invesdor brand in the Nordic and German-speaking markets.

Our story

Change in Growth Focus

In the last funding round, Invesdor was expecting to see major growth in its core businesses, which until this year have been in organizing equity funding rounds for Nordic growth companies, and in technological solutions (Platform-as-a-Service a.k.a PaaS, and white label offering). Even though Invesdor has been able to maintain its market share in the Nordic equity scene since its last funding round, the growth was not as fast as anticipated for the reasons specified later in this material. Also, as explained in the section about Invesdor’s PaaS offering below, the technological solutions were much slower to set up than expected. 

Invesdor has always been a platform looking for international expansion outside the Nordics. That is why Invesdor reacted fast when the right opportunity came along in late 2018: in May 2019, the company merged with an Austrian crowdinvesting platform, Finnest GmbH, the leading digital financing platform for mid-size (“Mittelstand”) companies in the German-speaking countries.

Finnest’s expertise was an excellent combination to Invesdor’s: they already have a strong presence in the major German-speaking DACH (Austria, Germany and Switzerland) market, their own product and expertise is in debt crowdfunding and they are accustomed to work with companies with turnovers ranging between 10-200 million euros, which is much larger than the typical Nordic SME sector Invesdor has so far been working with. 

Invesdor’s cash flow comes from its current main business lines, which are the equity business in the Nordics and Finnest’s debt business in the DACH area. However, after the merger, Invesdor sees three main growth areas for the newly created group: 

  1. Bonds to Nordics: Invesdor has used Finnest’s debt and bond expertise to set up a more professional bond practice that will be offered in Nordics to larger, mid-sized companies that Invesdor hasn’t so far been able to reach with the equity product. Invesdor can also offer bonds to DACH customers in addition to the existing Finnest debt products.
  2. Equity to DACH: Invesdor can bring its sophisticated equity knowledge from the Nordic markets to the DACH area, which is showing great growth potential. Vienna stock exchange recently introduced "Direct market plus" for SME's in Austria, which gives huge opportunity for Invesdor to offer pre-IPO and IPO rounds in the DACH area. With Invesdor’s extensive experience with 154 successful equity funding rounds organized through its platform invesdor.com, the merger created a fast lane to start offering the well-functioning equity product in the DACH market: the Finnest brand is already well-recognised in the area, and with the tied agent structure in place, Finnest can now, as a subsidiary of Invesdor Ltd, offer Invesdor’s equity product to Finnest’s existing network.
  3. PaaS to Nordics and DACH: The development of the PaaS offering took longer than anticipated (see the section about the PaaS offering), but the product is now ready and the first partnership deal was signed in October 2019. 

Therefore, even though Invesdor did not meet its estimates set in the funding round in 2018, the management team is confident that they have managed to set a stronger foundation for future growth in the long-run. To support this growth, Invesdor is looking for a new CEO with expertise in taking businesses cross-border to take Invesdor to the next level (see Our Team section below for further information). Invesdor is also launching a completely renewed Invesdor brand in H1 2020 together with an enhanced platform to complement its new strategic focus towards more established companies and a genuinely international investor base. 

Invesdor is now looking for funding for three purposes: supporting the company’s sales operations, launching the new Invesdor brand, and improving the company’s working capital. 

After establishing its position on current key markets, Invesdor is planning continued growth into other European countries, financed by further equity rounds if necessary.

Years 2018 and 2019: Setting up a Foundation for Future Growth

The year 2019 has been a year of big strategic changes for Invesdor. The company has executed a merger with Finnest GmbH, created a plan for using its expertise cross the two companies, created a new strategic plan, tightened its Investment Committee requirements to improve the quality of the dealflow, and introduced a number of new key people on Invesdor’s Board of Directors (“Board”) and in the management group. 

These changes have required a lot of time and focus. Also, personnel changes at the top of Invesdor’s Nordic sales organisation and the generic downturn in the IPO market (see section “Our Business and Market Situation” below) has affected the Group’s revenue streams. This left Invesdor Group’s cumulative revenue for the first three quarters of 2019 at €1.0M, compared to €1.2M from the same period in 2018[1]. In 2018, Invesdor’s revenue grew by 53% to €1.56M from €1.02M in 2017. 

New, Professional Bond Practice

Invesdor’s revenue has so far mainly been generated through equity funding rounds organized mostly for Finnish growth companies. Invesdor is a well-known player in this field and will continue to grow its market share there. However, the company recognises that the growth potential in the equity crowdfunding market in Finland is limited. 

Invesdor believes that there is a market gap and substantial growth potential in the transferable bond market in Finland and other Nordic countries: crowdfunding platforms focus on straight debt products, and the traditional investment banks focus on large bonds. The potential in the bond market is also backed up by market research: the loan-based crowdfunding volumes rose 29%, going from €76.0M in 2017 to €98.3M, in 2018.

The Invesdor management team believes there is a demand and room for bonds with compelling fee structures in the middle-sized company sector. That is why Invesdor recruited Raine Luomanen to the team as VP, Nordic Corporate Sales to set up the sales organisation for bonds in the Nordic. Luomanen started in the company on August 12, 2019.

Invesdor’s new bond practice offers investors a way to expand their portfolio with a more stable investment option. Focusing on bigger companies, Invesdor plans to offer its investors €1M - €25M crowdbond rounds for companies with over €5 million turnover and a positive cash flow.

The new COO of Invesdor Group and co-founder of Finnest, Günther Lindenlaub, has been a major asset in setting up and selling the new bond practice. He was an investment banker for 20 years, leading Raiffeisen Bank International's capital markets unit before he founded Finnest. Through the merger, Invesdor gained a great deal of insight into the sales and execution of debt and bond fundraising, as well as deep knowledge about the funding needs of larger companies.

Launching of Invesdor’s new, improved bond practice is already approaching. The first new bond round is planned to be launched on invesdor.com during Q1 2020. 

PaaS offering ready and first partnership signed

During its previous funding round, Invesdor expected to receive major growth from its technological solutions, Invesdor Technologies, that would comprise of commercializing its proprietary technology platform by 1) offering it as a Platform-as-a-Service product to financial institutions, and 2) offering White Label Solutions to licensed customers. 

However, further investigations and early experience showed that the white label offering would require major investments and new expertise in-house. Hence, Invesdor decided to reshape the intended offering and only concentrate on the PaaS product, which was closer to the key competencies within the team. 

The development of the PaaS offering turned out to be much slower than Invesdor anticipated in 2018: the legal work, the corresponding technological development work and the development of the service concept together with the long lead times with industry partners required a great deal of effort before the company could expect to see results from this line of business. 

Now, Invesdor is happy to tell that the product is ready, and the first PaaS partnership deal was signed in October 2019. Invesdor still believes that the PaaS business holds great growth potential and is also more scalable than its traditional fundraising business, but the expected revenue has shifted forward.

[1] All figures for Q1-Q3 2019 are stated with Invesdor’s contributions included from January 1, 2019 to September 30, 2019 and Finnest’s contributions included from May 15, 2019 to September 30, 2019. All figures for 2018 are prior to the merger with Finnest and thus include only Invesdor’s contributions.

Our business & market situation

Invesdor Group’s revenue was down to €1.0M during Q1-Q3 2019 compared to the €1.2M from the same period in 2018. In January-September 2019, Invesdor Group’s cumulative EBITDA amounted to €-1.3M (€-0.5M in corresponding period in 2018).[1] The pro forma figures for Invesdor Group, which include Finnest figures from the beginning of the year 2019, were: Revenue €1.5M and EBITDA €-1.2M.

The downturn in revenue is in part the result of major changes in company structure and strategy brought by the merger with Finnest, which required management’s time and attention. Additionally, Invesdor tightened its Investment Committee requirements for Target companies during 2019 to improve the quality of deal flow and attractiveness of valuations for investors. Invesdor Group focused heavily during the first three quarters of 2019 on carrying out integration efforts and formulating a joint strategy across the Group. Additionally, a certain amount of headwind seen on the broader financial market has potentially affected Invesdor’s operative environment: in Europe the number of IPOs dropped by 40% and they raised 40% less proceeds in the first 9 months of 2019.[2]

The merger, while taking time from sales efforts, was carried out to strengthen the Group’s position as a European player in the long-run. Invesdor’s long term vision is to build a better Europe by creating the most outstanding digital financing ecosystem. This new strategic direction is first implemented by stabilising and growing the company’s market position in the current Nordic and DACH markets. This, in turn, is supported also by Invesdor’s new, improved bond offering for both markets and the introduction of a new equity offering in the DACH market. In the future, Invesdor is also looking to further develop its platform towards a community platform, where it is easy for investors to interact with interesting European companies and find relevant information.

Beyond the changes brought by the merger, Invesdor Group has seen a steady flow of funding rounds. In all of 2018, approximately €23M was invested through Invesdor.com, while during the first three quarters of 2019, the total invested through Invesdor.com and Finnest.com platforms was €15.2M, including Finnest’s numbers since the merger from May 15 onwards. The average funding round in 2018 was ca. €800k, rising slightly to approximately €804k during the first nine months of 2019. The Group’s success rate for public funding rounds has stayed steady, being around 70% during the years 2018 and 2019.[3]    

The New Invesdor Group

Invesdor Group is a digital fundraising and investment platform company that connects ambitious European growth companies with investors worldwide. This year, Invesdor Ltd merged with the Austrian company Finnest GmbH, the leading digital financing platform for mid-size (“Mittelstand”) companies in the German-speaking countries. The transaction was approved by Invesdor’s Annual Shareholder’s Meeting in April and the share swap was finalised in May 2019. After the transaction, the Invesdor Group consists of four companies: Invesdor Ltd and its 100% owned subsidiaries Finnest GmbH and Invesdor Services Oy, and a 100% owned subsidiary of Finnest GmbH, Finnest Slovakia. 

Invesdor Group provides an efficient process for setting up funding rounds, managing their progress and receiving funding from a registered base of around 57,000 users on its two platforms, invesdor.com and finnest.com. Invesdor.com showcases equity and bond funding rounds that can currently come from five countries: Finland, Austria, Sweden, Denmark and Norway. Invesdor is also working on setting up a tied-agency in Germany, to be able to start offering rounds for German countries, and is likely to achieve this during 2020. 

Finnest.com, in turn, will also continue to run normally under the Finnest brand, which is well known in the DACH area. Finnest.com offers debt fundraising and payment-in-kind loan products; due to Finnest’s license, these products can currently only be offered to companies and investors from the DACH area and Slovakia or Croatia. Finnest also provides a platform for professional investors, lenders and arranger banks; this service is called Finnestpro.com.

Through the parent company Invesdor Ltd, Invesdor Group is licensed to expand operations to 28 countries in the European Economic Area (EEA), including in IPOs. The Group is headquartered in Helsinki, with offices also in Vienna and Stockholm, and has 35 team members operating in five countries. The total value of capital invested through Invesdor Group’s platforms over the years is over €150M. The Group has facilitated more than 180 successful public funding rounds.

 

Group structure chart

 

Market situation

The European alternative finance market has been on a steady growth track over the course of Invesdor’s history, going from €1.12bn in 2013 to €10.44bn in 2017, as shown by the study by the Cambridge Centre for Alternative Finance. The relatively big UK market has had a disproportionate impact on the size; if the UK is excluded, the European alternative finance market went from €0.33bn to €3.37bn during the aforementioned period. [5] We believe the market growth in Continental Europe is still ahead of us.

According to Bank of Finland, the total crowdfunding market in Finland in 2018 was €307.2M. The funding volume of investment-based crowdfunding decreased by 8% from 2017 to 2018, going from €62.8M to €58.0M. In the same period, the volume of loan-based crowdfunding rose 29%, going from €76.0M to €98.3M - while the sector’s figures rose, the growth slowed down from the 64% that it was from 2016 to 2017.[5] Invesdor’s leadership believes the company’s new strategic shift in the Nordics towards looking for growth with the bond product is therefore also supported by the broader market sentiment, where loan-based crowdfunding has not slowed down as fast as the equity market.

The broader financing market has seen a slump in sentiment in 2019. The professional services firm Ernst & Young reports that the IPO market in the EMEIA area (Europe, Middle-East, India and Africa) has experienced lowered investor confidence in 2019 as geopolitical issues, such as the trade-related tensions between the United States and China and the prospect of a hard Brexit, have taken their toll.[6] For context, in Europe the number of IPOs and their proceeds both saw a 40% drop in the first three quarters of 2019 compared to the same period in 2018.[7]

Changes in market sentiment in public and unlisted markets will always have impact on Invesdor business. But we have maintained a steady deal flow and believe our market position is strengthening. We are well positioned for future growth. 

Invesdor has also received industry recognition during 2018 and 2019. In October 2018, the company was chosen as the Best Nordic Fintech in the Nordic Startup Awards. In September 2019, Invesdor received the The Award for Innovation with Turnover of €0-25M in the European Business Awards, being one of the Finnish National Winners. 

[1] All figures for Q1-Q3 2019 are stated with Invesdor’s contributions included from January 1, 2019 to September 30, 2019 and Finnest’s contributions included from May 15, 2019 to September 30, 2019. All figures for 2018 are prior to the merger with Finnest and thus include only Invesdor’s contributions.

[2] EY. More unwelcome delay or an extended opportunity to prepare? Global IPO trends: Q3 2019. p. 25. 

[3] All figures for Q1-Q3 2019 are stated with Invesdor’s contributions included from January 1, 2019 to September 30, 2019 and Finnest’s contributions included from May 15, 2019 to September 30, 2019. All figures for 2018 are prior to the merger with Finnest and thus include only Invesdor’s contributions.

[4] Ziegler, T., et al. 2019. Shifting Paradigms: The 4th European Alternative Finance Benchmarking Report. Cambridge Centre for Alternative Finance. University of Cambridge Judge Business School. p. 22

[5] Suomen pankki. Further growth in peer-to-peer lending to individuals. 21 March, 2019. 

[6] EY. More unwelcome delay or an extended opportunity to prepare? Global IPO trends: Q3 2019. p. 21-22. 

[7] EY. More unwelcome delay or an extended opportunity to prepare? Global IPO trends: Q3 2019. p. 25. 

Our team

Our team

Management team

Invesdor’s management team has been strengthened following the merger and the team is extremely happy to have Günther Lindenlaub as COO, bringing deep knowledge of debt products to the Invesdor team. Günther is in charge of Invesdor Group’s revenue generation with the Sales and Investor & Campaign Management teams. He was an investment banker for 20 years before he founded and managed Finnest.

As mentioned in the introduction, Invesdor announced in September that the co-founder and current Chief Executive Officer Lasse Mäkelä would be stepping down. Lasse expressed that it is the right time to bring in a new leader with expertise in taking businesses cross-border. Currently Lasse remains Invesdor’s largest shareholder; after the new CEO has been recruited and onboarded, Lasse plans to join the Board at the next general meeting and focus on the sales and business development activities. 

Invesdor’s other new Management Team members are bringing their own specialised expertise to the group in the following ways: Robert Sjöblad as VP, Finance and HR, Katri Koponen as VP, Marketing and Communication, and Juho Niemistö as VP, Development. The management team is headed by Lasse Mäkelä as CEO, until a new CEO is ready to take charge. 

To ensure that the Management Team has a sufficient view of all the markets and their sales functions and operational level, the Extended Management Team includes three additional members who provide added perspective when necessary: Raine Luomanen as VP, Nordic Corporate Sales, Riikka Koskenohi as VP, Investor and Client Management, and Reinhard Hoenig as Head of Sales, DACH.

Board of Directors

In 2019, Invesdor got a new, international Board of Directors, led by the Chairman of the Board, Tero Weckroth. The new Board members are Jörg Flöck and Guzel Gumerova from Speedinvest, Pekka Mäki from 3TS Capital Partners and Petteri Poutiainen from Digitalist Group.

Ownership Structure

There are altogether 52,341 Invesdor shares outstanding, and the company’s share capital, as required by the investment services regulation, is EUR 125,000. Invesdor has altogether 685 shareholders with the three largest being Larzon Capital Oy (Lasse Mäkelä, 21.0%), SpeedInvest with three different entities (12.3%), GJMR Core GmbH (Günther Lindenlaub and three other Finnest founders, 11.3%) and Taaleri Varainhoito Oy (7.0%). Other Invesdor founders (excl. Mäkelä) and board members own a total of 13.7% of the shares. The acting management holds 1,453 options. In addition, 875 options are owned by other current and former employees.

Lasse Mäkelä

CEO, Co-founder, Member of the Management Team

Invesdor's co-founder and CEO, Lasse is responsible for the general management and leading of the company. His prior work experience includes CFO and M&A positions at Corbel, Consti, and KONE, and investment banking at Icecapital and Merrill Lynch London. Lasse holds an eMBA in General Management.

https://www.linkedin.com/in/lassemakela/

Günther Lindenlaub

COO, Member of the Management Team

Günther leads Invesdor's Sales Team. It is his goal to make Invesdor the leading alternative financing platform for Nordic and German-speaking companies. He was an investment banker for 20 years before he founded and managed Finnest. Finnest is now part of the Invesdor Group. Günther holds a M.Sc. degree in Business Administration.

https://www.linkedin.com/in/guenther-lindenlaub-5141219a/

Katri Koponen

VP, Marketing and Communication, Member of the Management Team

Katri leads Invesdor’s Marketing and Communications team and is in charge of growing the recognition and reputation of the Invesdor brand globally. Katri has been with Invesdor since May 2019. She holds an M.A. degree in organizational communication.

https://www.linkedin.com/in/katrikop/

Juho Niemistö

VP, Development, Member of the Management Team

Juho leads Invesdor’s Development team. He has over 10 years of experience in software development. Juho has been with Invesdor since March 2018. He holds a M.Sc. degree in Computer Science and a M.A. degree in Musicology.

https://www.linkedin.com/in/juho-niemisto/

Robert Sjöblad

VP, Finance & HR, Member of the Management Team

Robert leads Invesdor's Finance and HR team. Robert has 20 years of experience in various financial tasks. Robert started at Invesdor in August 2019. He holds a M.Sc. degree in Business Administration.

https://www.linkedin.com/in/robert-sjöblad-4096bb6/

Reinhard Hoenig

Head of Sales, DACH

Reinhard joined Finnest in 2015 as the CSO responsible for the sales team in the DACH region. He has some 25 years of corporate finance expertise and led corporate business & product units at different banks. He holds a doctoral degree in Law.

https://www.linkedin.com/in/reinhard-hönig-3860a663/

Riikka Koskenohi

VP, Investor and Client Management

Riikka leads the Investor and Client Management team. Her goal is to ensure target companies get well connected with Invesdor’s investor community. Before joining Invesdor, she was the COO of Dynamo&Son Oy. Riikka holds a B.A. degree in Finance.

https://www.linkedin.com/in/riikkakoskenohi/

Raine Luomanen

VP, Nordic Corporate Sales

Raine's main focus is to acquire new customers in the Nordic countries. He has extensive experience in crowdfunding and corporate finance, having worked at Privanet and Taaleri, as well as managing the Finnish operations of FundedByMe. Raine started at Invesdor in August 2019. He holds a M.Sc. degree in Economics.

https://www.linkedin.com/in/raineluomanenfin/
Risks

Unlisted growth companies are high-risk investments. Making a high-risk investment involves risks, for example the risk of losing your investment, lack of liquidity, irregular or rare dividends and dilution of your stake. Please study this risk warning before making a high-risk investment.

It is recommended that you familiarize yourself with the investment target of your choice, reduce risks by investing in several investment targets and balance your investment portfolio with more liquid investments. We also advise you to pay attention to the Target Company specific risk descriptions, which you will find included in the pitch materials.

Attached to the pitch there is a creditworthiness report that may be relevant for the investment decision

Risks related to the operating environment

In recent years, there has been considerable fluctuation in the overall economic and capital market conditions in Europe and elsewhere in the world in consequence of, inter alia, the debt crises of certain European countries. Even though the overall economic and capital market conditions have somewhat improved lately, this is no guarantee that similar fluctuation would not continue in the future. The Company is especially vulnerable to macroeconomic conditions in Finland and Europe but also local economic problems in areas where the Company has a good market position and a large number of customers may have an adverse effect on the Company’s business.

Concerns over geopolitical tensions in areas including the Middle East, the debt crises of certain EU Member States, and political development and its trade policy impacts, such as the envisioned exit of the United Kingdom from the EU (“Brexit”), and the decisions taken by the administrations of various nations on customs duties and equivalent tariffs have affected and are likely to continue to affect global economic conditions.

Uncertainty and unfavourable development in the economy and capital markets may have an adverse effect on the Company’s business and customers, operating results, financial condition, liquidity and the value of the offer shares.

Risks relating to the company’s business

The successful implementation of the Company’s strategy depends on several factors, some of which are at least in part beyond the Company’s control. The Company may not necessarily be able to successfully implement its strategy and achieve its financial targets due to e.g. the market situation or failure in the management of the company. There can also be no assurances that the strategy chosen by the company is the right one.

The Company may not necessarily be able to implement its strategy or adjust it to changes in the operating environment, or the chosen or implemented strategy may turn out to be wrong.

Interest outlook risks

While interest rates around the world have been historically low for years, investing in alternative financial products has become increasingly popular. If the interest rates turn, or the economic atmosphere otherwise changes so that investing through service providers like Invesdor becomes less appealing, it will have an adverse impact on Invesdor's operations.

Operational risks

Incumbent financial institutions and new challengers can create competition risk for Invesdor. Through continuously focusing on improving its positioning and delivering top quality service to its clients, Invesdor aims to increase their loyalty and ensure its overall good reputation in the market. Invesdor also increasingly aims to co-operate with other players in the industry. By offering the Technology and other services to other investment service providers, a potential competitor may turn to a partner. The company may not necessarily be able to respond to tighter competition, develop its services or solutions in line with competitors, or digital development may force the company to make additional investments.

Operations may not succeed as planned. Invesdor's expansion requires high-quality execution, successful recruitments and good timing. Invesdor must continuously try to enhance its service and products while maintaining transparency and high quality for its customers. It is not guaranteed that Invesdor will succeed in its pricing, market positioning or product offering which may affect Invesdor's business.

Invesdor has been testing the Technology in practice for the past 6 years, and now the plan is to start selling it for other investment companies to use. With a new product there might be regulatory aspects and such that create more costs than estimated. It might also be that the Technology does not attract as much interest as planned. Launching a new product carries several risk factors, and an unsuccessful launch may negatively impact the value of the company.

Invesdor is currently not aware of any litigation processes against them, but there's a risk that Invesdor faces these issues in the future, which brings costs and risk for reputation that might have negative effects to the value of the investment.

Information security risk

IT systems and telecommunications connections are of considerable importance to the Company’s business. The company’s operating conditions are dependent on the uninterrupted functioning of IT, reporting and monitoring systems. The renewal of IT systems, if and when necessary, may cause considerable costs to the company. 

The ability of the company to provide its services is also dependent on its ability to store, retrieve, process and manage databases that are essential to the continuity of the company’s operations and to expand and update its data processing methods. The loss or destruction of stored data, mechanical malfunction or malfunctions in the operation of hardware or software, malfunctions in telecommunications or fires, power outages or other disruptions may have an adverse effect on the company’s business, the continuity of its business, operating results and/or financial condition. 

Invesdor may also fail in the identification of information security and cybersecurity risks, control and management of resourcing of risks and in compliance with regulation.

Personnel risk

Invesdor has a relatively small team of skilled employees and failure to recruit skilled management or personnel or loss of key employees may affect the company’s ability to pursue its business or to grow. 

Liquidity risk

Invesdor Group is loss-making. Even though the Group aims to start making a profit in the near future, the goal might not be reached and/or the profits may not be enough to cover all costs. There's a risk that future investment is needed, which might have a negative impact on the value of the investment. The next funding round is planned to be executed already in the near-term future. There is no guarantee that future fundraising will be successful.  

If fundraising is not successful, Invesdor will need to find alternative methods or options to support its growth rate or shut down operations.

Solvency risk

Under the provisions applicable at a given time, the company shall satisfy the solvency requirements as well as the risk and solvency management requirements applicable to its operations. The objective of the solvency management process is to assess whether the amount and nature of the company’s capital is adequate relative to the nature, extent and complexity of the company’s operations and sufficient to cover all risks of the business and the operating environment. 

Solvency regulations applicable to Invesdor may be tightened and changes concerning the solvency or authority decisions may have an adverse effect on Invesdor.

Reputation risk

Reputational risk may arise from, inter alia, failures in business expansion, failed investment actions, dissatisfied customers, possible sanctions imposed by the authorities and legal proceedings, employee error and unethical conduct, failure to provide a high-quality service and failure to comply with laws, rules and regulations, failed cooperation with contractual partners, information security breaches, misconduct on the part of partners, and equivalent factors. If realised, reputational risk may have a material adverse effect on the company’s business, financial condition, operating results and future prospects and on the value of the shares.

Regulatory risk

The company operates in a regulated and supervised industry. The provision of financial services is tightly regulated and the predictability of the legal operating environment is important to the company. 

There can be no assurances that the authorisation granted to the company by the authorities or its other authorisations will not be rescinded or their contents changed in a manner unfavourable to the company’s business, or that the authorities will in future grant the company any authorisations that it may require. Furthermore, unfavourable changes in legislation and unforeseeable interpretations of legal praxis or by the authorities may have an adverse effect on the company’s capacity to pursue its business. There can be no assurances that the company will succeed in adjusting its business or strategy to changes taking place in the regulatory environment, regulatory interpretations, or loss of advantages concerning a specific status or authorisation. Change in the regulatory environment might also increase Invesdor's compliance costs and have an effect on the company's business. 

If realised, the aforementioned and other risks relating to the supervisory and regulatory systems may have an adverse effect on the company’s business, financial conditions, operating results and future prospects and on the value of the shares.

Compliance risk

Compliance with the legislation concerning the prevention of money laundering and terrorist financing is an integral element of the company’s business. In the provision of investment products and investment services, the company must comply with the procedural requirements imposed in the Act on Investment Services.

The company and its employees are required to comply with numerous different laws, regulations and decrees at both the national and EU level and there is a risk that the company’s employees may neglect to comply with legislation or regulations, the terms and conditions of authorisations and regulatory approvals, or internal company policies.