How Will Investors Get Their Money Back
Understanding Returns on Investments
At Pitch-Investors, we ensure that our investors are informed about how they can expect to receive returns on their investments. The methods for obtaining returns vary depending on whether you are involved in equity or debt investments.
1. Equity Investments
Equity investments offer several ways for investors to earn returns:
- Returns through Dividends: Investors in equity may receive dividends if the business distributes profits to its shareholders. The amount and frequency of dividends depend on the company’s profitability and dividend policy.
- Capital Gains: Investors can also earn returns by selling their shares in the future at a higher price than they initially paid, assuming the company grows and increases in value over time.
- Exit Strategy: Some businesses may have a defined exit strategy, such as a buyback option, a merger, or an acquisition, where investors can sell their shares back to the company or to new investors.
2. Debt Investments
Debt investments provide a more structured return mechanism:
- Interest Payments: Investors who participate in debt instruments (such as bonds or loans) will receive regular interest payments. The interest rate and payment schedule are predefined and outlined in the terms of the debt instrument.
- Repayment of Principal: At the end of the debt term, the business is obligated to repay the principal amount initially invested. This is often done in a lump sum or through amortized payments throughout the term.
3. Security and Risk
Understanding the risk and security measures associated with your investment:
- Risk Level: The return of investment (ROI) depends on the performance of the business and the type of investment. Equity investments are generally riskier but offer higher potential returns, while debt investments are usually less risky with more predictable returns.
- Security Measures: Debt instruments might be secured against the company's assets, offering additional protection to investors. In case of a default, secured creditors may have a claim to the company's assets.
4. Platform Support
Pitch-Investors supports investors throughout the investment lifecycle:
- Monitoring and Updates: Investors can monitor the performance of their investments via the Pitch-Investors platform, where we provide regular updates on the businesses they have invested in.
- Facilitating Returns: Pitch-Investors facilitates the process of distributing dividends, interest payments, and principal repayments to investors according to the agreed schedules.
5. Default and Recovery
In the event of default, Pitch-Investors takes the following actions:
- Default Procedures: If a business is unable to meet its repayment obligations, Pitch-Investors will initiate default procedures, which may include negotiations for restructuring the debt, liquidating assets, or other recovery methods.
Understanding these mechanisms helps investors make informed decisions and manage their investment risks effectively. At Pitch-Investors, we are committed to providing clarity and support throughout your investment journey.