Investing in startups involves risks, including loss of capital, illiquidity, lack of dividends and dilution, it should be done only as part of a diversified portfolio. These investments are targeted solely at investors who are sufficiently sophisticated to understand these risks and make their own investment decisions.
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FAQ

Investing in start-ups involves risks, including loss of capital, illiquidity lack of dividends dilution, and it should be done only as part of a diversified portfolio. These investments are targeted solely at investors who are sufficiently sophisticated to understand these risks and make their own investment decisions.

It is important that you carefully read and understand the terms upon which you invest and the rights that attach to the shares that you invest in.  
 
FREQUENTLY ASKED QUESTIONS


A. GENERAL QUESTIONS
 
1. How does Ice Dragons crowdfunding work?
 
In its simplest form:-
 
· An Entrepreneur creates an online listing on the Ice Dragons website explaining its business and what it aims to achieve with the investment.
 
· A listing will give details of the target amount of money an Entrepreneur wishes to raise and the percentage share of the business they are offering in return.
 
· Entrepreneurs then upload their listing to the Ice Dragons website where it can be viewed by Investors who have the opportunity to invest money in the listing in return for shares in the Entrepreneur.
 
2. What fees do you charge?
 
It is free to register as an Investor or an Entrepreneur and to add a listing to Ice Dragons.
 
When an Entrepreneur successfully raises their target amount Ice Dragons will deduct a success fee of 6% of the target amount raised.
 
If you invest in an Entrepreneur and go on to sell your shares in the Entrepreneur at a later date then, to the extent the consideration you receive for your shares exceeds the amount you originally invested in the Entrepreneur, we shall charge you an amount equal to 10% of any profit you make (e.g. if you invest £10,000 in an Entrepreneur and go on to sell you shares for £15,000 (being a profit of £5,000), the fee we shall charge you will be £500, being an amount equal to 10% of the £5,000 profit you made on your investment).
 
For Investors using GoCardless there is a transaction fee (from GoCardless) of 0.5% of the monies you invest in an Entrepreneur so that, for example, if you invest £500.00 you will pay £2.50.
 
3. How will my money be held?
 
We do not hold your money. The monies you invest will transfer directly by direct debit from your account, through GoCardless to the Entrepreneurs lawyers account, who will be mandated to release monies only after they have confirmed that all relevant paper work has been completed e.g. your share certificates have been produced, share register completed and Companies House notified.
 
4. Can I transfer my Ice Dragons membership?
 
No. Your membership of Ice Dragons is personal to you and cannot be transferred to any other person.
 
5. Are you authorised and regulated by the Financial Conduct Authority (FCA)?
 
Ice Dragons is authorised and regulated by the FCA (No. 583315).
 
 6. What rights will my investment shares have?
The rights attaching to the shares that you buy will generally be set out in the Entrepreneur's articles of association.
Once the target amount is reached, the Entrepreneur will usually be required to adopt our standard Ice Dragons Articles of Association ("Standard Ice Dragons Articles of Association"). Ice Dragons may allow some Entrepreneurs to keep their existing articles of association if it deems it appropriate in the circumstances. This will be decided on a case by case basis.
Occasionally an Entrepreneur will also have a shareholders' agreement or an investment agreement in place which you may be required to sign up as a condition to investing.
All this information together with the terms of the investment and the key provisions of the articles of association of each Entrepreneur will be summarised in the 'Corporate Term Sheet' document which can be found on their listing on the Ice Dragons website.
It is important that you carefully read and understand the terms upon which you invest and the rights that attach to the shares that you invest in. 
For more information about specific share rights see Questions 12, 18, 20, 21 and 22 below.
 
B. INVESTING
 
6. Can I invest?
 
To invest in an Entrepreneur through Ice Dragons you must be over the age of 18, resident in the United Kingdom and self-certified as either a High Net Worth Individual or Sophisticated Investor.
 
Self-certification occurs as part of the registration process to become an Investor.
 
7. How do I invest?
 
Once you have been authorised to invest and you have found an Entrepreneur you would like to invest in, you simply enter the amount you would like to invest and click the 'Invest' button
 
8. Is there a maximum or minimum amount that I can invest?
 
An Investor should invest at least £100 in any one investment as, in the first 12 months of your membership of Ice Dragons an Investor will also be obliged to make investments totalling at least £1,000 across any number of businesses. This is an FCA requirement and reflects the High Net Worth/Sophisticated Investor status of each Investor.
 
If your portfolio of investments by the end of your first year of membership does not meet or exceed the £1,000 investment level, we have the regulatory obligation to contact you to discuss why, and we may need to suspend your membership which will prevent further investment opportunities. In the event that this occurs you keep your existing equity investments but will no longer be able to access the Ice Dragons website until we reinstate your investor membership.
 
As an Investor there is a suggested minimum amount of £100 per transaction that you can invest. However given the high-risk nature of investments through Ice Dragons you are strongly encourage to invest no more you can afford to lose without impacting on your lifestyle.
 
There is a further practical limitation, this being that an Investor is limited on an investment by investment basis to investing a maximum of the difference between the money a startup is seeking, and sum that has already been indicated for investment in that startup by other Investors.
 
9. How do I transfer the money to make an investment?
 
To invest in an Entrepreneur you will be required to set up a direct debit through GoCardless for the amount that you are to invest.
 
When using GoCardless you will be asked to fill in your details including your bank details. You will subsequently be added to the list of funders and upon the listing hitting its target, the money that you have pledged will be taken out of your bank account.
 
Investing in a listing this way is immediate and removes the need to make a bank transfer payment, which can take up to 72 hours. The funds will not leave your bank account until the listing hits its funding target but you won’t miss out on investing in a business because of the time to process a bank transfer.
 
10. If funding fails, do Investors pay anything?
 
No. if the target amount is not reached then no money will be taken from Investors.
 
11. What are the risks of investing?
 
Investing in start-up and early stage businesses is high risk. The majority of start-ups fail or do not deliver shareholders a return on their investment. Liquidity, or the ability or cashing in your investment is limited as it often relies on the company being sold. Dividend payments are rare and the likelihood of an investor's percentage shareholding being diluted by future fundraising is high.
 
Share dilution can happen at any time when an Entrepreneur needs additional capital. There is always a risk of dilution. If the Entrepreneur raises more capital later on through the issue of new shares (which most successful start-ups need to do), the percentage of equity you hold in it will decrease unless you exercise any statutory rights of pre-emption that may exist (please see FAQ 12 – "What are pre-emption rights?" - for more information). The potential upside of share dilution is that the additional capital the company receives from issuing additional shares can improve the Entrepreneur's profitability and the value of its stock.
 
Investors should implement a diversification strategy when building an investment portfolio. Diversification involves spreading your money across multiple investments and will give you, as an investor, greater peace of mind that your investments will sustain in adverse market conditions and cushion losses. However, it will not lessen all types of risk.
 
12. What are pre-emption rights?
 
Pre-emption rights are a right of first refusal that existing shareholders have over the issue of new shares in a company in which they hold shares. A pre-emption right allows existing shareholders to preserve their percentage shareholding in a company if they have sufficient funds available to be able to take up their rights.
 
Such pre-emption rights are set out in the Companies Act 2006 which requires that a company proposing to allot shares must first offer them to each shareholder of ordinary shares in proportion to his existing shareholding.
Therefore, as a shareholder in an Entrepreneur, you may have the right to protect your shareholding from dilution by being given the opportunity to subscribe for a proportionate part of any issue of new shares.
This right may however be varied or superseded by the terms of the Entrepreneur's articles of association or any shareholders agreement which you may be required to sign up to as a condition of your investment.
It is important therefore that you carefully read and understand the terms upon which you invest and the rights that attach to the shares that you invest in.  See Questions 13 and 14 below for more information.
 
13. By allowing an Entrepreneur to make a listing are you recommending it as a good investment?
 
No. The listing of a business on the Ice Dragons website does not infer that Ice Dragons is recommending that you invest in it.
 
Ice Dragon's Investment Panel does review and approve every listing that appears on the Platform as a financial promotion for the purpose of the FCA Rules and will have concluded that the information provided to Ice Dragons by the business seeking investment, is "fair, clear and not misleading."
It is important that you carefully read and understand the terms upon which you invest and the rights that attach to the shares that you invest in. 
 
However ultimately you have to use your experience and judgment to decide if the business idea has merit. For advice on investment, taxation, legal, financial or other matters you should consult your own professional advisers accordingly.
 
14. Am I able to ask the Entrepreneur questions about their business?
 
Yes. We provide a discussion forum for each listing where you can ask questions which the Entrepreneur will reply to. All discussions between an Entrepreneur and Investors should take place on this discussion forum.
 
15. Can I cancel my investment?
 
You can withdraw from your investment at any point before an Entrepreneur reaches its target.
 
At the point that an Entrepreneur reaches its target, you will then have a cooling off period of 7 days in which you will be able to cancel your investment. If at the expiry of this 7 day period you have not cancelled your investment, you will become liable to pay the money you have pledged to the listing.
 
16. Will my investment be public knowledge?
 
Any investment you make will be visible to other Investors on an anonymous basis. This gives other investors an indication as to the number of other investors and the range in size of the investments.
 
You should note that even though your investment is private on the website, the Entrepreneur will be informed of your identity before the investment is completed, in preparation for the issuing of shares and your investment will be recorded in the Entrepreneur's register of members. In addition your shareholding will be recorded at Companies House in the Entrepreneur's annual return.
 
17. How will the startup use my investment?
 
In the listing we request that the Entrepreneur describes what it intends to use the investment for. However a business needs flexibility and if a better way to use the money to grow the Entrepreneur's business subsequently arises then it may decide to use the monies for that purpose instead.
 
18. How do I make money out of my investment?
 
As a shareholder in the Entrepreneur you may be entitled to receive dividends as well as any monies raised out of a subsequent sale of those shares you hold in the Entrepreneur. Dividends are a company's profits that are made available for distribution amongst shareholders of a company in proportion to the number of shares held by them – dividends are not guaranteed and payment of them is typically subject to approval by both the board of directors and the shareholders of the company.
However, you should note that the majority of start-ups fail or do not deliver shareholders a return on their investment and as such you should not expect to get anything back on your investment.
 
Please see FAQ 11 (What are the risks of investing?) for more information.
 
19. What information am I entitled to as a shareholder?
 
As a shareholder of the Entrepreneur, you will usually be entitled to receive:-
 
· copies of the Entrepreneur's annual accounts and reports for each financial year; and
 
· notice of the Entrepreneur's general meetings.
 
You will also usually have the right to inspect and receive copies of the minutes of members’ general meetings. In addition, you will also be entitled to all the company documentation that is on file with Companies House as this is public information.
 
20. Can I transfer my shares?
 
The ability of an Investor to transfer or sell its shares (and any restrictions on such transfer or sale) will be set out in the Entrepreneur's articles of association.
 As a shareholder in an Entrepreneur you may also have the benefit of what are commonly known as 'tag along rights'.
If these rights are contained in the Entrepreneur's articles of association they will enable you, in the event that a majority shareholder(s) wishes to sell their shares in the Entrepreneur, to force that majority obtain an offer for your shares also.
In the event that you do sell your shares, you must immediately inform the Entrepreneur of your actions so that it can update its share register.
 
21. Can I be forced to transfer my shares?
 
The articles of association of the Entrepreneur may contain what are commonly known as 'drag along rights'.
 
These drag along rights are common and usually provide that if the holders of a specified percentage (commonly 75%) of the shares in a company wish to accept an offer to buy their shares, they can force the other shareholders to also accept such an offer.
 
22. What happens to my shares if I die?
 
What happens to your shares if you die will usually be set out in the Entrepreneur's articles of association.
The articles of association of each Entrepreneur that adopts the Standard Ice Dragons Articles of Association will provide that upon the death of an Investor, title to the Investor's shares will transfer to the Investor's successor in title.A transfer of this nature will be permitted transfer without the requirement to first offer the shares to the other shareholders of the Entrepreneur.
A different transfer process may apply to Entrepreneurs that do not adopt the Standard Ice Dragons Articles of Association.
 
C. ENTREPRENEURS
 
23. Can I be an Entrepreneur?
 
To be an Entrepreneur you must ordinarily be a private company limited by shares and registered in England and Wales. Ice Dragons may chose to consider applications to list from public limited companies from time to time. Any such decision will be made at Ice Dragons' sole discretion.
 
To be approved to list your business on Ice Dragons you will need to provide a business plan that clearly explains the investment proposition. This will be reviewed and, if successful, approved for listing by Ice Dragon's Investment Panel.
 
Your directors will also be required to give certain confirmations as to the accuracy of the information that is provided by you in your business plan and as part of your listing.
 
24. Who is on Ice Dragon's Investment Panel?
 
The Investment Panel consists of a core of 6 permanent individuals who may invite particular industry specialists to join to comment on a particular fund raising project. For a current list of panel members, plus a short biography of each, please see the 'About Us' pages of the Ice Dragons website.
 
In general terms, the Investment Panel consists of experienced business individuals who have been in senior corporate positions or run their own businesses for many years. They have a wealth of experience across the service sector, the energy sector and private equity in the U.K. France and USA. At least three members of the panel are qualified Chartered Accountants and one, as an Associate of the Chartered Institute of Secretaries and Administrators (ICSA) is a Company Secretary.
 
25. How long do I have to raise my target amount?
 
This will vary from listing to listing depending on how much money an Entrepreneur is looking to raise and will be decided by the Entrepreneur in conjunction with the Investment Panel.
 
26. What happens if I do not reach my target?
 
Ice Dragons operates on an all-or-nothing basis so if an Entrepreneur does not reach its target in the given time frame it gets nothing.
 
27. Is there a maximum or minimum target amount that I can raise?
 
There is no minimum, however, to achieve publication on the Ice Dragons website there is a considerable amount of preparation and supplying of good quality information making the raising of sums less than £20,000 rather uneconomic.
 
We do not set a maximum but would encourage a business seeking more than £1,000,000 to look at other sources of financing.
 
28. What happens once I have raised my target amount?
 
Once the target amount is reached, the Entrepreneur will usually be required to adopt our standard Ice Dragons Articles of Association. Ice Dragons may allow some Entrepreneurs to keep their existing articles of association if it deems it appropriate in the circumstances.
 
Once this is completed, the investment money will be transferred to the Entrepreneurs' bank account and share certificates can be issued to the Investors and the Entrepreneur's register of members updated to reflect the new shareholdings.
 
29. Can I edit my listings after it has been launched?
 
Listings can be edited and updated at any time, however all amendments do need to be passed through the Investment Panel to ensure they are in line with the proposition.
 
30. Can a listing raise more money than the target amount?
 
No. As soon as the target amount is reached the listing will automatically close to any new investments.
 
31. Can I increase/decrease the target amount that I am looking to raise?
 
No. Once a listing is live the Entrepreneur may not increase/decrease the amount it is looking to raise, please see 32 below.
 
32. Can I increase/decrease the equity I am offering?
 
No. Once a listing is live the Entrepreneur may not increase/decrease the amount of equity it is offering.  If you wish to change either the target amount or amount of equity, the project can be cancelled and an updated on listed.  This ensures that all investors invest on the same terms.
 
33. Can I end a listing early?
 
Yes. If you wish to cancel your listing for whatever reason please contact us.