Basic Customer Information

We invest in lines (metrics trends), not in dots (today metrics).

Mark Suster

In investing, what is comfortable is rarely profitable.

Robert Arnott

Diligence is the mother of good luck.

Benjamin Franklin

Chase the vision, not the money; the money will end up following you.

Tony Hsieh

Only when the tide goes out do you discover who's been swimming naked.

Warren Buffett

Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.

Paul Samuelson

Be fearful when others are greedy and greedy when others are fearful.

Warren Buffett

It’s far better to buy a wonderful company at a fair price, than a fair company at a wonderful price.

Warren Buffett

The individual investor should act consistently as an investor and not as a speculator.

Benjamin Graham

Never invest in a business you cannot understand.

Warren Buffett

How it works

Investment through Startupxplore can be implemented in two ways:

Through a Syndicate: investors invest directly in the company, through the assumption of shares via a capital increase. In order to facilitate the governance of the company, investors waive the right to attend company meetings in person, but maintain their political rights and syndicate the voting rights corresponding to their shares with the majority decision of the syndicate.
Through a Special Purpose Vehicle (SPV): At the request of the company, an SPV can be used to invest in the company. The SPV will be managed by Startupxplore, but the voting behaviour of the SPV at company meetings will be decided by the investors by vote.

Startupxplore differs from other platforms in that it contains the largest community of investors and innovative companies with high growth potential in Spain, and has a roster of benchmark investors in the technology sector (which we will refer to generically as benchmark investors), such as JME VC, Vincent Rosso, Faraday Partners, Yago Arbeloa, Javier Llorente and Carlos Domingo, among many others. These investors co-invest in the different investment projects promoted through Startupxplore, together with the investors registered with Startupxplore (hereinafter referred to as backers), who can be both small savers who want to start investing in innovative and emerging companies, always in compliance with the limits set by law regarding non-accredited investors, as well as significant assets who want to diversify their investment portfolio.

The investment process in the different projects is described below, explaining the role of each of the parties involved in the process.

Phase 1: Promotion of projects and formalization of investment commitments

Startupxplore launches each investment campaign through its website, indicating the period during which backers can participate in the campaign and the target amount of funding. Specifically, a specific section dedicated to the investment operation is published on the website with a public part summarising the generic aspects of the operation and a private part (only for registered investors) which includes business data of the operation, the questions and answers that investors may have asked and the following documentation: the Guide to the opportunity, the presentation of the company (deck) and the summary of terms and conditions (Termsheet) relating to the company's Partnership Agreement. All investors are also informed by email of the availability of the deal.

During the campaign, Startupxplore checks the profile of registered backers interested in investing in order to classify them as experienced or inexperienced and formally identifies them. It also asks them to verify their telephone number (for the purposes of subsequent communications) and asks them to sign a letter of representation via a digital signature platform (Signaturit) confirming the amount they are going to invest, that they understand the risks of investing in innovative companies, declare their investor profile (experienced or inexperienced) and adhere to the company's shareholders' agreement and, if applicable, the syndication agreement.

The duration of the Startupxplore opportunity is, by default, 30 days or until the target amount of the transaction has been reached (in case it is reached before 30 days). This period may be extended by 25% at the discretion of Startupxplore.

At the same time, investors are asked to transfer the amounts committed to an escrow account that the promoter company has previously opened with PECUNIA CARDS E.D.E, S.L. (Startupxplore's designated payment institution). In this type of account, a limitation is established so that the funds deposited are only released if at least the minimum amount of the financing is reached, and the Act of capital increase of the company and, if applicable, of the special purpose vehicle is signed.

Once the period established in the launch conditions has elapsed (30 days, by default, although the duration may be different for each operation), if the investment campaign has not been successful, the promoter and all investors are informed by e-mail of the failure of the campaign and the campaign is closed. In such a case, the funds will be returned in full to the investors.

The maximum amount that can be funded through Startupxplore is public. Once this amount is reached, the opportunity will be automatically closed, so it is advisable, if you want to invest, to confirm the investment by signing the investor's letter of representation and transferring the funds as soon as possible, to the company's account.

Phase 2: Investment execution

The campaign is successfully closed if the minimum amount is reached after the deadline or if the maximum amount is reached before the deadline has passed. Startupxplore then gives investors who have not yet signed and transferred the amount of their respective investment commitments to the promoter's escrow account opened with PECUNIA CARDS E.D.E, S.L. a period of time.

When all the funds transferred to the escrow account are available, the company formalises the capital increase by virtue of which the investors become partners in the company. In addition, the company and Startupxplore confirm in writing to the bank that the capital increase has been signed and the bank releases the funds from the escrow account in favour of the company.

As soon as the deed of capital increase is duly registered in the corresponding Commercial Register, a copy is sent to all investors.

Phase 3: Investment monitoring

Once the investment has been executed, the following financial information will be requested periodically from the promoter and provided to the investors by e-mail:

On a quarterly basis, the most relevant milestones at business level, the financial evolution and the most important metrics.
On an annual basis and as part of the relevant quarterly report, the promoter's annual accounts in registered form duly filed with the Commercial Registry.

In the event that the investment does not work out (the investee company closes down), your company will be dissolved, implying either a loss or partial recovery of the invested capital.

Phase 4: Returns

In the event that the investment obtains returns, either due to the company's decision to distribute dividends or due to a situation of exit, the investors will receive this remuneration or capital in the bank accounts they indicate, and they must be the holders of these accounts.

Deduction for Investment in Companies of Recent Creation

As a result of Spanish Law 28/2022 on the promotion of the start-up ecosystem, a new deduction was introduced, which consists of allowing those who decide to invest capital in start-up business projects to deduct 50% of the amounts contributed up to a maximum of €100,000 in base amount (deduction of a maximum of €50,000 in base amount) from their state income tax liability. Both the entities in which the investment is made and the investors must comply with certain requirements established in this Law and in the Personal Income Tax Law.

In addition, there are regional deductions, which are those issued by each Autonomous Community and which have different characteristics and requirements.

Risks

These companies are organizations in search of a business model that can be scalable and global. During the process a large number of projects fail, a few are profitable and very few produce a high return on investment.

Investing in emergent companies with high potential for revaluation is an investment product considered as high-risk investments and high potential return. Given the level of risk of these operations you should never invest a significant portion of its assets. Should invest only that amount you can afford to lose.

The investment in these companies consists of the acquisition of shares in companies already incorporated by means of the assumption or subscription of shares in a capital increase. This issue is not supervised by the CNMV and the information provided by the issuer has not been reviewed by the CNMV nor does it constitute an information prospectus approved by the CNMV.

Similarly, the participatory financing project is not authorised or supervised by the CNMV or the Bank of Spain and the information provided by the promoter has not been reviewed by them. Furthermore, the platform is not a member of any investment guarantee fund or deposit guarantee fund.

Startupxplore operates according to the guidelines of the Participatory Financing Platforms Act and, in any case, does not carry out the activities reserved for investment services companies or credit institutions. It is a participative financing platform that brings investors and companies together, enabling investors to co-invest with more experienced investors, benefiting from their knowledge and access to investment opportunities.

Any investor who makes an investment in one or more companies with high growth potential through Startupxplore, should be aware that such investments have a high degree of risk. In particular, the following risks must be taken into account:

Risk of total or partial loss of the invested capital

Investments in emergent companies with high potential have a high degree of risk and uncertainty. These companies have to face significant operational and financial risks. While the expected returns by investing in this kind of companies are high, investors should be aware that such returns may never occur or may be limited taking into account the level of risk assumed. The total loss of the invested capital is possible and can easily occur.

Risk of not getting the expected return

The investment in these companies is totally uncertain, so even if a given investment has been sold to a third party, the returns obtained may not compensate for the time spent in obtaining them or may not reach the initial capital provided.

Risk of lack of liquidity of the investment

Investments in early-stage companies with high growth capacity are illiquid and there is no secondary market for the transfer of shareholdings, there is therefore a risk of not finding a buyer for the shares or holdings acquired by the investor. The maturity terms of these investments are uncertain and may take years, in some cases, until the investment is recovered.

Dilution risk of participation in society

These companies may need more capital in the future and, as a result, agree to further capital increases. Although members are generally granted the right to take over or subscribe, there is the possibility of removing this right. It is therefore possible that the percentage of the total share capital represented by the shares acquired may be reduced as a result of future capital increases.

Risk of not having dividends

There is a risk that profits will not be generated during the year and, consequently, dividends may not be distributed to the shareholders. In addition, even in the event of profits, generally, are reinvested in improving processes, products and expanding the markets where it has presence, among others, so it is not common to receive dividends from such investments and cannot be expected.

Risk of not being able to influence the management of the company

When taking minority shareholdings, there will be no option to be a member of the company's governing bodies or to influence their management.

Requirements

Startupxplore's activity is regulated by REGULATION (EU) 2020/1503 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 7 October 2020 on European providers of equity crowdfunding services for businesses, which establishes certain investor protection measures.

In order to be considered as an experienced investor, you must declare that you are one of the following:

be a Professional Investor,
be a legal entity that meets at least 1 of the following criteria:
1. equity of at least €100,000;
2. net turnover of at least 2.000.000 €;
3. balance sheet of at least €1,000,000.
Be a natural person who meets at least 2 of the following criteria

have gross personal income of at least €60,000 per tax year, or a portfolio of financial instruments, defined as including cash deposits and financial assets, exceeding €100,000;
work or have worked in the financial sector for at least one year in a professional position requiring knowledge of the operations or services envisaged, or have held an executive position for at least 12 months in a legal person as defined in the previous point;

To renounce being considered as a Non-Experienced Investor, and to state that he/she is aware of the consequences of losing the protection linked to the category of Non-Experienced Investor, being responsible for the veracity of the information provided.

If none of the aforementioned requirements are met, the category of Non-Experienced Investor shall apply. If Startupxplore considers, on the basis of the information received, that it does not have sufficient knowledge, skills or experience, such potential inexperienced investors will be informed that the services offered on the crowdfunding platforms may be unsuitable for them and will be warned of the risk of losing all the money invested.

Potential inexperienced investors shall expressly acknowledge that they have received and understood the warning issued by the crowdfunding service provider.

What is a reference investor?

A reference investor is a person (or legal person) who undertakes to associate his public image and invest his own capital in an opportunity within Startupxplore. This implies that:

Offers. He makes available to the Startupxplore investment community an investment opportunity that he considers very interesting and to which most investors would not normally have access.
Invests. The lead investor always commits capital and invests a significant amount at the same time as the other Startupxplore investors. It is not necessarily the one that must make the largest capital contribution in the investment round, but it must have a significant commitment.
Manages. He usually holds the position of advisor in the company, with which he meets at least every 3 months and where he is responsible not only for adding value and supporting the company, but also for defending the interests of all the investors he represents and helping to grow the business and take it to the next level.

What are the requirements to be considered as reference investor?

Startupxplore uses a number of criteria to accept new reference investors, and do not necessarily have to do with public visibility:

Criteria. It must be an investor with a proven ability to analyse investment operations in early-stage companies with high growth potential, and to evaluate the business of these companies and make reasoned decisions to participate in them.
Experience. One of the key aspects, he/she must have previously carried out a significant number of transactions and know all the aspects and keys to investing in this type of company, or have solvent experience in the vertical of the company.
Independence. The benchmark investor must declare any possible conflict of interest, must not have a stake in companies that are direct competitors of the company and must not have any personal or professional relationship with the company or its employees, among other aspects to which he/she is committed.
Commitment. The interests of the anchor investor are always aligned with those of the other investors, as the anchor investor invests a significant amount of the round at the same time as the other investors.
Management. The anchor investor must be committed to supporting the company at all times.

What is the process we follow in selecting projects?

We have developed our Investment Criteria, which have been published and which must be met by all companies that wish to be financed through our platform. These criteria address certain risks that we have identified as indispensable to mitigate, i. e., if the company meets these requirements it will have those risks mitigated.

In Startupxplore we take very seriously offering quality projects to our investors, so we have an investment committee, which comes into play in this next step. This committee will decide which companies will pass to the next level and which will not based on the target analysis on the investment criteria to which we have referred. Those companies that do not meet these requirements, will be informed of the impossibility to be funded through the platform and the reason why, and those who do meet the requirements will pass to the next stage, in which we analyze the company (its market potential, the product, the computer, legal aspects, etc.) in greater detail. This next level will be subject to approval of the Analysis Committee, which making use of the following analysis will finally decide whether the company is selected for its capital increase through our platform or not.

These companies will then have to undergo a thorough analysis carried out by the Startupxplore analysis team. This process will have to be surpassed by the selected companies, being this a final conditioning factor to offer the entry into capital to investors.

At Startupxplore we know that efficiency and agility are essential, and that is why we attach great importance to the speed with which we can respond to all companies with high growth potential that are interested in increasing their capital through the platform.

How is the information provided by companies received and processed? What criteria are followed for its publication?

The information provided by the companies will be received through cloud storage services where only Startupxplore and the promoter (the company) will have access. The criteria will be the same for all of them, as well as the criteria for their publication.

The information published follows totally homogeneous standards for all companies. The same information, tailored to the sectors in which it operates, will be published to ensure the same chances of success in the Startupxplore funding round based on the information provided.

What would happen if Startupxplore ceased its Activity?

In the event of the platform's operation being discontinued the investments made by the investor users are not at risk.

With regard to the services to which Startupxplore committed itself, that correspond essentially to those of communication between the promoters (the companies with high growth potential) and investors, which will be provided by an entity which will be appointed by Startupxpllore and which will be subject to approval by the investors, who will decide in the manner provided for in the syndication agreement. This mechanism will be activated automatically with the notification of the cessation of activity, fulfilling in time and form all the obligations to which the platform was initially committed and without any harm being done in the process.

What measures does Startupxplore take to minimize the risk of fraud?

In order to try to reduce the risk of fraud, Startupxplore carries out various procedures:

Checks that both the company and its directors do not have any open insolvency issues and are fully up to date with their tax obligations.
Analysis of the financial, legal and product statements to verify that the information provided is truthful, with special emphasis on those items that are relevant and where the company's greatest likelihood of fraud has been identified (essentially the debt, cash, expenses and income sections).

What measures does Startupxplore take to minimize operational risk?

In order to ensure that operational risk is mitigated, Startupxplore carries out various procedures:

Identification and evaluation. In order to identify the operational risk of the platform, internal factors such as the structure of the platform and the nature of its activities, and external factors such as changes in the sector and technological advances that may affect the development of the activity, are considered. Startupxplore holds a meeting every six months in which these components are analysed beforehand and the analysis carried out by the management at the meeting where the heads of each department are present.

Control and Mitigation. Startupxplore has control processes in place to ensure compliance with the operational risk management policy. In order to ensure the continuity of the operating capacity and the reduction of losses in case of business interruption, the platform has contingency and business continuity plans, according to the size and complexity of the operations as indicated in the section on cessation of activity.

What does Startupxplore do to avoid conflicts of interest?

Check out our Code of conduct and conflict of interest management.

Is Startupxplore Audited?

All Participatory Financing Platforms registered in the CNMV are required to be audited, that is why we have a first level Auditor: Auren Auditores SP, S.L.P.

What is the Startupxplore complaints and claims procedure?

In Startupxplore we want to be close to our clients (investors and companies) in the good and bad, so we have implemented a clear and simple troubleshooting procedure in case something fails or can be improved.

The first and most importantly, how you can contact us if something goes wrong?

Email: complaints@startupxplore.com
Address: C/ Baldoví, 2 Ofic 11 46002 Valencia

What procedure will we follow to resolve a complaint or claim?

In an ideal scenario, we will resolve it on the spot, but that will not always be possible. Therefore, those that cannot be resolved immediately will follow this procedure:

Identification of the client and of the incidence

The complaints or claims shall be carried out personally with supporting documents at STARTUPXPLORE’s address or by means of electronic media (e.g. email or other electronic messaging or a telematics system) to the e-mail address complaints@startupxplore.com.

The procedure is initiated by the filing of a document which will include:

The identity of the client: First Name, Last name (or company name) and address of the claimant and, where available, of the representative, duly accredited with; DNI/NIE if person and CIF if it is a legal entity. E-mail address and contact telephone number.
Reason for the complaint or claim, with express mention of the matters on which a ruling is requested.
A copy of the documents that support the complaint or claim.
Place, date and signature.

Acknowledgment of receipt

Once you have notified us of such complaint or claim, it is up to us to notify you (acknowledgement of receipt) of the e-mail from which we have received such notification (within 15 days) that we are aware of the filing of the complaint or claim and to gather further information if necessary.

Admission to filling and processing

At this point we analyze aspects such as:

Subject: That the person who presents it is truly a Startupxplore client (promoter or investor).
Deadline for submission: That no more than 2 years have passed since the customer had knowledge of the facts leading to the complaint or claim.
Causes of rejection (apart from the violation of the two above):
- When the complaint or claim does not provide necessary data for analysis or nothing is request in this regard.
- When the complaint or claim has been resolved, identifying the client and the facts, or has already been processed by other administrative, arbitral or judicial proceedings.
- When the complaint or claim is oblivious to the rights of the customer with respect to the obligations of STARTUPXPLORE.

The rejection of the complaint shall be communicated to the client, giving him a term of ten (10) calendar days to correct the defects. Once received, if the causes of rejection are kept, the final resolution shall be notified to the customer.

Startupxplore can ask to the customer data or additional information it deems pertinent to adopt its resolution. If it doesn’t do so within 10 calendar days his complaint or claim will be archived. If you once archived the client provides the necessary documentation, Startupxplore will reopen the file.

The term given to the client to correct errors or complete the documentation will not be taken into account for purposes of calculating the period of 2 months for the resolution of the file by Startupxplore.

Notification of resolution

The resolution shall be notified to the customer by email or other electronic messaging system or a telematics system in a maximum period of two months.

With the resolution, the file can be concluded by any of the following circumstances:

The friendly settlement agreement between the parties, once adopted it shall be binding on the parties and the complaint or claim will be archived.
Burglary at the client's request on behalf of STARTUPXPLORE.
customer dissatisfaction with the resolution. The customer, in the event of a disagreement with the outcome of the pronouncement, or after the period of two months without having obtained answer, may refer the matter to the competent authorities.
Withdrawal of the customer: The client may at any time desist from his claim, with which the procedure will end.

In addition, a file will be kept of all complaints and claims received, their status and, in case of being closed, the final resolution taken. Startupxplore PSFP will inform you of its inclusion in the register and the other conditions set forth in the Law 15/1999 of 13 December on the protection of personal data. The data entered in the register shall be kept for at least five (5) years after having been registered or updated for the last time. The data from that file will be strictly confidential.