It is important to remember that investments carry a degree of risk. When investing, your principal is at risk.
The following risk factors are not exhaustive nor a comprehensive explanation of the risks involved.
- Issuers using the Platform include start-ups, early stage and growth stage businesses.
- Investment in these types of businesses carries a considerable level of risks.
- Crowdfunding platforms are vulnerable to attacks from hackers and cyber-criminals the same as any online business. However, Ethis will implement a high level of security both on the back-end and the front-end of the platform to ensure users digital safety and personal data are given highest priority.
- Investor who invests through equity crowdfunding has an expectation of some return on investment in the future. However, return on equity crowdfunded ventures may take many years to materialise.
- The Issuer listed on the Platform may require further funding in the future. It is possible that the Issuer will issue more shares, which would lower the value and/or the proportional holding of the shares of the Investor.
- The Investor may lose the entire investment, and must be in a position to bear this risk without undue hardship.
- Whilst reasonable care is taken to ensure reliability and accuracy of information on the Website, neither the offering being made on the Website nor the registration of the Website with the Securities commission Malaysia, is to be taken as an indication of the merits of the offering.
- Any loss resulting from investment made through the Website is not covered under the Capital Market Compensation Fund.
Duty of Investor
Ethis encourages the Investor to do the following to mitigate risks:
- (a) diversify their investments across multiple campaigns, to lower overall portfolio risk.
- (b) ask questions and seek assistance from our staff.
- (c) seek independent financial advice.
- (d) read all relevant information regarding the services on the platform and the business of the Issuer.
- (e) do own research before committing to any investment.
Security Risk
Ethis’ business is largely online. Therefore, ensuring the security of the system is key. Ethis implements a high level of security both on the back-end and the front-end in developing the platform to ensure user digital safety and personal data are given highest priority. The below highlights our building blocks for system integrity and security:
- SSL certificate is incorporated in the system to ensure the user information and database are protected at all times.
- MD5 encryption technology is used for user password and personal info protection.
- Ethis’ server is also manually backed up daily to conserve the information in the database (secondary backup system). We also have a mirror server which forms our backup in the case of a compromise on the main server (see business continuity).
In terms of the front-end security of users, investors and issuers will have to log in to our platform with a username and password. To increase security, we will require users to create a password with at least 8 characters, including one capital letter, one small letter, and one number). Furthermore, all major transactions will have increased security through captcha.
Political Risk
Ethis has a strict policy of being apolitical to ensure that we are inclusive, and also to prevent being involved in any political sensitivities or issues.
Economic Slowdown
A slowdown in the economy is likely to increase the credit profile of most SMEs in Malaysia. This is likely to increase default risk. In a situation like this, Ethis will become increasingly selective in our deal selection. SMEs looking to raise financing will be stress-tested to determine whether or not they are able to repay investors in a worse-case scenario.
Information or Materials
An Investor may not be given all the financial, business documents or other information of the Issuers which could be relevant for an investment decision. Furthermore, in preparing and obtaining the information published on the Website, whilst reasonable care is taken to ensure reliability and accuracy, Ethis and its associates, directors, employees and partners does not guarantee to its contents and completeness and does not accept any liability for losses which arise from relying on the documents published.