The main risk associated with any type of investment is the total or partial loss of the money invested, as well as the probability that the return obtained will be less than the expected or estimated one. You must proceed from the idea that the higher the estimated profitability of an investment, the higher the risk associated with it.
By previously assessing this issue, you will have taken an important step towards becoming informed about an investment opportunity. In this regard, we strongly recommend that you go through the rest of the information in this document.
Failures or inadequacies in processes, people or systems may have a substantial impact on an investment. This is the operational risk inherent to every activity in the market.
In wecity we have the appropriate technical and organizational security measures in place to minimize the operational risk of our activity and, therefore, also the level of risk for the investors and developers who use our platform. In addition, we have our Customer Protection Regulations, which govern the requirements and procedures of our Customer Service Department to duly address all complaints and claims that you may wish to raise, in order to solve them in a legal and effective manner.
In a real situation of inflation, with the continued and generalized rise in the prices of products and services in the market, the value loss of money is unavoidable and, therefore, your consumption and purchasing capacity are also reduced. The impact of inflation on any investment is precisely that: the real return on the investment decreases.
Before making any investment you should consider the need for availability of the money you plan to invest; will you need it in the short term? Investing entails the possibility that you may not be able to withdraw the invested money whenever you need it, and you will have to be aware of the estimated term for obtaining liquidity from your investment and obtaining the corresponding yield.
For further information, please see our General Conditions applicable to Participatory Financing Services.
We are not going to tell you whether you should concentrate or diversify your investments - that is your decision - but we do want you to understand the basic rule of diversification in finance. Diversifying, as opposed to concentrating, means multiplying and varying. In the investment world, diversification means spreading out investments, spreading them over a variety of projects and options, thus taking smaller risks, as opposed to concentrating investments in a single project, thus taking a higher risk.
The real estate market itself, as a specific market, presents a number of systemic risks that you as a real estate investor must be aware of, understand and assume. For example, the evolution of interest rates and credit spreads by financial institutions with regard to the real estate market is a systematic market risk that the investor assumes, with the possibility that changes in rates and spreads may have a negative impact on the value of real estate. Generally speaking, falling rates mean rising yields, and vice versa. Another example of systematic risk in the real estate market is its particular cyclical nature: the real estate market is susceptible to cyclicality, which leads to fluctuations in property values. Previous experience confirms this.
Risks associated with the political, economic, social and regulatory context.
Changes of government inevitably occur, so you should not fail to pay attention to the evolution of the economic, political, social and regulatory context in which we operate in the market: national and European legislation reforms, criteria of public administrations, the environment, etc. In short, these are factors that can affect the value of the property, the costs of acquiring it and, ultimately, the return that you as an investor can obtain from it
What happens if the financing target is not reached within the deadline established for this purpose? The Spanish Law for the Promotion of Business Financing allows the established deadline to be exceeded by up to 25%, provided that prior to the investment, the possibility and the circumstances giving rise to such an extension are disclosed.
Moreover, if even with the extension of the deadline the financing target is not achieved, the amounts deposited by the investors will be returned. In this case, the Law for the Promotion of Business Financing allows the project to receive financing when at least 90% of the target has been reached, after deducting the participation in the project that the Platform itself may have, and provided that prior to the investment, the possibility and the circumstances giving rise to such a decision are disclosed.
You should always bear in mind the risks and restrictions that your company's own legal framework entails, as well as any limitations that may have been established in the company's agreements or bylaws. In addition, if you have acquired securities, it may happen that your shareholding in the financed company will decrease as a result of successive capital increases.
The investment does not guarantee that the company financed through the acquisition of shares or participations will obtain dividends or that it will redistribute them among its partners.
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