What are the main risks of Reg CF investing?

Regulation Crowdfunding (Reg CF) lets you invest in private companies, but private securities can be speculative, illiquid, and risky. You should not invest unless you can afford to lose the entire amount you invest.

The main risks to weigh before you commit:

• Total loss. Issuers may fail, underperform, miss projections, change plans, or never provide a return. Invown does not guarantee that an issuer will succeed, that an offering will close, or that you will receive any return.
• Illiquidity. For one year after they are issued, Reg CF securities generally may not be transferred except in limited cases, such as back to the issuer, to an accredited investor, or to certain family members. Even after that year, there may be no market for them.
• Small-company risk. Many issuers depend on founders or a small management team, may be unable to raise the additional capital they need — or may raise it on terms that dilute you — and may run short of cash. Projections may be wrong because assumptions change.
• Limited information. Reg CF requires significant disclosure, but not the same level required in registered public offerings. Annual reports may provide limited information and may stop when the issuer becomes eligible to end reporting.
• Where you sit in the capital structure. Equity holders are generally paid after creditors. Debt may be unsecured or subordinated. SAFEs typically do not pay interest, may have no maturity date, and may never convert into equity.
• No recommendation. Invown does not recommend or endorse any investment, and platform review does not mean Invown guarantees an issuer’s statements.

Two protections are worth knowing. You may cancel an investment commitment for any reason until 48 hours before the offering deadline, and your funds are held in escrow with Enterprise Bank until closing — if the offering does not close, committed funds are returned to you.

Before you invest, ask whether you understand the specific security you are buying and whether a full loss would leave you financially okay. The investor education page covers these risks in more depth, along with investment limits and cancellation rights.