When will the investor portal be released?
The investor portal is currently being developed and we plan to release it in beta form in Fall 2017.
How can I be notified when the investment portal is released?
To be notified when the investment portal is launched, go to our pricing page, click ‘Get updates’, and enter your email address. We will reach out to you closer to the release date. If you have any specific questions regarding the investor portal please visit our contact page - we would love to hear from you!
What is an investor account?
An investor account is for accredited investors interested in funding opportunities in established businesses. An investor can invest individually or collectively (syndicate) to finance deals.
How much does an investor account cost?
Investor accounts are free to set up. Tresle charges a 3% carry only on positive investment returns. See ‘What is Carry?’ for more details.
What is an accredited investor?
An accredited meets the requirements set by the US Securities and Exchange Commission (SEC) which allows them to invest in certain private securities opportunities.
The SEC website contains a full explanationAs an overview, being an accredited investor means you meet the following criteria:
- Individuals with annual income over $200K (individually) or $300K (with spouse) over the last 2 years and an expectation of the same this year
- Individuals with net assets over $1 million, excluding the primary residence (unless more is owed on the mortgage than the residence is worth)
- An institution with over $5 million in assets, such as a fund or a trust
- An entity in which all equity owners are accredited investors
Why do I need to show that I’m an accredited investor?
The SEC requires companies that publicly discuss their financing to take strides towards verifying accreditation. Simply stating that you are accredited is not considered enough by the governing body.
What do I need to provide to prove I am an accredited investor?
There are several ways you can go about proving accreditation:
- Accreditation based on income - you will be required to provide documentation of income for the past 2 years. The documentation can be in the form of tax returns, W2s, or any other formal documents.
- Accreditation based on assets - you will need to provide recent brokerage statements that include your name, the date, and your account total(s). If this route is selected, a credit report will be required to derive your net assets (mortgage debts not included).
- Accreditation based on confirmation - you will need to provide a recent letter from either a CPA, attorney, or an investment advisor/broker confirming you meet the accreditation benchmarks.
Why is a credit report necessary?
A credit report is only necessary if you are claiming accreditation based on assets. The reason why is to prove your net assets are greater than $1 million. This is done by submitting your total assets-in form of brokerage statement-and subtracting your total debt (mortgage not included)- in form of credit report.
Will my credit be impacted by such a credit report?
No. We carry out a soft inquiry on your credit report- which will not impact your credit.
Do I need to meet the same investor accreditation benchmark as U.S. investors if I’m not in the U.S.?
Yes, the same regulations apply to all investors. Not just U.S.-based investors.
Are the documents I upload available to everyone at Tresle?
No, the various documents you upload as evidence of accreditation are kept private. Only a select group that includes licensed attorneys and CPAs will review these documents for the sole purpose of ensuring current ‘accredited investor’ minimums are met.
Are there tax consequences to investing on Tresle?
No, there are not any tax consequences. The funds do not earn interest and are not treated as an investment. Be sure to meet your a tax advisor to consult you on your specific position.
What is carry?
Carry is an agreed upon percentage of the capital gains (profits) generated by a liquidation event that is paid to the managers of an investment (see ‘Syndicates’ FAQ subsection for more detail’).
A carry is only paid if the investment is successful. If the investment fails, no carry or fees will be owed. In other words, you only pay carry if you make money on the investment.
When do I see my returns?
Whenever there is a liquidation event (i.e. annual dividend, exit, etc…) all investors involved in the deal will see a return on their initial investment. Of this total, the set carry amount will be paid to the lead (if applicable, see ‘Syndicate’ FAQ subsection for more detail’) and to Tresle (3%).
What is a syndicate?
A syndicate is a temporary group formed to pool together resources for the purpose of handling a large transaction that would otherwise be impossible for individuals to complete by themselves. Think of it as everyone coming together, forming a group, pitching in funds, and sharing the appropriate risks & returns.
Who manages the syndicate?
A syndicate is managed by the lead investor. The lead is the individual that begins the investment by committing his/her own money to the deal as well as pulling in funds from other investors (backers). Once the investment is made, the lead basically acts as the representative for the syndicate and communicates everything between the backers and the investment recipient.
All of the accounting, legal work, profit distribution, taxes, and investment monitoring is done by a third-party regulatory agency (discussed below). The lead then gets this information and passes it along to his/her backers.
How much do syndicates cost?
All investors generally pay between 0-25% deal carry to the syndicate lead (depending on the lead), and a 3% carry to Tresle.
Investors also pay upfront for each deal- around $8,000. This cost is split evenly between all investors (including lead) and are paid to third parties such as state regulatory agencies, payment processors, and accountants that administer the investment for up to 10 years. For example, if there are 50 investors in a deal, each would pay $160 (8,00050). Tresle does not profit from these costs.
What is the structure of a syndicate?
Syndicate investors don’t invest directly in the company seeking financing on Tresle. They invest in a special purpose vehicle (SPV) that is created solely to make the investment in the company seeking financing. The SPV is created as an LLC.
What documents do I need to sign?
Investors sign documents to invest in a SPV that then invests in the company. You do not sign any of the company’s direct financial documents. The company’s financial documents are handled and signed by a third-party fund management firm.
What is the 99-investor limit?
Due to regulations, syndicates can only have 99 investors in a given deal.