Risk Description

General information

Lending funds to project owners, including real estate developers, manufacturing, agriculture, or forestry companies and other business entities can be highly profitable, taking into account that our offered annual interest rate is usually from 9% to 12% per year. Our Credit Committee members perform a detailed assessment of all projects before they are accepted and placed on our Platform as an investment offer to minimize your risk-return ratio. However, we are unable to completely eliminate the impact of risks, the realization of which can lead to the reduction and/or delay of expected revenues or even a complete loss of your investment.

Inter alia,

1) Past performance is no indicator of future performance. Past performance indicators make no guarantee for future returns.

2) Pledged real estate appraisal and/or other valuations or appraisals do not guarantee its prompt sale for market price.

3) The total forecasted returns on an investment are a forecast, that can change, subject to various factors and risks.

4) Estimated project owner and project risk level and credit score does not exclude its failure in future.

5) Platform’s historical results, including average profitability, do no guarantee the same in future.

To minimize the negative impact of risks on each separate investor’s quality of living, as a precaution, we strongly recommend not to lend more money than one can afford to lose without altering their standard of living. For additional security, we also recommend to diversify one’s investments by lending to a range of different project owners as well as spreading the invested funds between various types of projects.

Please note:

Any investment you make via the Platform will be absolutely illiquid, which means that you will be unable to withdraw your funds before the end of the investment term (loan maturity date). At the moment, we have not launched a secondary market for the loans and currently have no plans to do so. The only way you can release your money is: a) conventionally, at the end of the investment term; b) in some cases when the project owner repays the loan before maturity; c) exceptionally - if the loan becomes defaulted as the result of a debt collection procedure, enforced sale of collateral and distribution of proceeds amongst investors.

How we work

Protecting investors’ funds is our absolute priority. It is always our responsibility to take our best efforts to address each and all of the risks involved to mitigate their effect on your investment.

Our whole approach to risk mitigation is based on the three pillars, providing maximum protection of investors’ funds.

The three pillars are:


Our experts provide a comprehensive analysis of each project, including exploring legal, AML, financial, economic, and marketing issues on the investment object and business (the project owner and associated companies). As the result, we accept only feasible and sustainable projects with sufficient marketability, investment attractiveness and low risk-return ratio, delivered by financially sound business owners with good reputation.


All projects placed on the Platform are secured with collateral, which is 1 st rank mortgage, registered in favour of FUNDAUS OÜ on a real estate object with a clear market value and liquidity, according to official valuation, performed by a certified property appraiser, or a commercial pledge of the project owner’s assets or property. FUNDAUS is the holder of all documentation associated with pledging and the representative of investors’ interests in case of project owner’s failure. The maximum amount of loan, issued to the project owner, is 70% of market value of the entire collateral provided to secure the project owner’s liabilities.


A team of educated and experienced professionals regularly monitors project implementation process to reveal possible divergences at an early stage, as well as possible changes in project owners’ financial state and the market it operates in in order to perform re-assessment of the loan in case of any negative developments are observed. In the event the results of re-assessment show a worse result, the offer is being downgraded that leads to an increase in interest rate and the investors are updated accordingly. We also monitor project owner’s payment discipline and, if payment delays exceeds 30 days, the offer is being downgraded, but, following 90 days of delay, debt recovery procedure will be initiated.

The aforementioned three pillars of security are intended to reduce each of the risks pertaining to lending via the Platform.


Although being regulation-compliant, project descriptions provided on the Platform are not exhaustive and not purported to provide complete information to the investors. No information or project or project owner placed on the Platform as a whole or a part of it should be interpreted as investment recommendation or advice to make an investment.

Project description and documentation pertaining to the aforesaid includes certain statements, estimates and projections, provided by the project owner and assessed or derived by the Platform with respect to anticipated future performance of the business. Such statements, estimates and projections reflect significant assumptions and subjective judgements by the Platform experts concerning anticipated results. These assumptions and judgements may or may not prove to be correct and there can be no assurance that any projected results are attainable or will be realized. The results of initial assessment of the project and project owner are subject to change in course of re-assessment that may lead in changes in the offer.

The provided information has been prepared in good faith based on public and non-public sources of economic, financial, technical, and market information which we believe to be safe and reliable. FUNDAUS makes its best efforts to verify all information, used for assessment, including accounting statements, estimates and projections, using, to the extent possible and applicable, information from officially recognized sources, experts’ opinions, and conclusions, including auditors’ statements, real estate appraisers’ valuations, however, it does not make any representations or warranties as to the accuracy or completeness of any estimate or projection provided.


1. Risks that may cause the failure of the project

Investment offers, placed on the Platform, encompass inherent risks that could potentially lead to project failure. These risks include, but are not limited to: risk of compliance with project implementation schedule, risk of poor project management and non-achievement of results, risks, related to supplies or labor force, etc.

Assessed project risk and project owners’ credit score do not eliminate the risk of failure in the future. Even with a positive assessment, unforeseen challenges may have an adverse effect on project implementation.

To mitigate these risks, FUNDAUS conducts detailed assessment of the project and project owner, secures collateral, and engages a Credit Committee of independent experts. During servicing of the loan, project development is being monitored, and, in case adverse factors are revealed, crowdfunding offer is being re-assessed and investors are duly notified on offer downgrade.

2. Risk related to the profitability of the project and, therefore, the calculation of the amount of income related to the project and the fulfilment of the obligations of the project owners

Even if not completely failed, it may appear that the project demonstrates significantly lower performance that it was expected as a result of assessment, by the moment of acceptance and placement of the crowdfunding offer on the platform. Some of the risks that may cause such adverse changes include costs overrun, sale price risk, risks, related to the technology or logistics.

Poor financial results may lead to insufficient liquidity of the project owner that may impact its ability to fulfil timely and in full its payment obligations. Detailed assessment of the project and project owner and collateral provided are aimed to reduce this risk. After the loan is issued, FUNDAUS performs monitoring of changes, including the financial state of the project owner, and in case negative changes are detected, the offer is being re-assessed, notifying investors in the event of offer downgrade.

3. Project industry risks

Investing in projects spanning diverse industries introduces specific risks associated with the nature of the business. Industries undergo shifts in trends, consumer preferences, and competitive landscapes. Changes in economic conditions, market demand and competitive environment can impact the success of a project. Intense competition within an industry can affect market share and profitability.

Some of the industries are subject to technological advancements that can impact business models and operational efficiency. Projects reliant on complex supply chains may face disruptions due to unforeseen events, affecting production, distribution, and overall project viability.

To mitigate this risk, industry, or branch risk has been included as a separate component of project owner and project credit score. Also, during monitoring of changes, attention is paid to possible adverse scenarios on project owner’s industry development that may negatively impact the project. In case negative changes are revealed, the loan offer is subject to re-assessment and investors are duly informed if based on the results the offer is downgraded.

4. Other risks beyond the control of the project owner

Investing in projects involves exposure to external factors that are beyond the direct control of the project owner. Broader economic conditions, including inflation rates, interest rates, and overall economic stability, can affect a project’s financial performance. Projects involving international transactions may be exposed to currency fluctuations and exchange rate risks.

Legislative and regulatory changes within a specific industry, but also at national or international levels can pose challenges to project operations. Projects may encounter risks related to environmental sustainability and social impact.

Political events at a global scale, such as elections, diplomatic tensions, or geopolitical conflicts, can introduce uncertainties. Unforeseen events, such as pandemics, geopolitical tensions, military conflicts and terrorism acts, or natural disasters, can adversely impact projects across industries.

Monitoring of these specific risks is a part of overall monitoring of changes. In case of adverse developments that may affect project owner’s operation environment, the project will be re-assessed with subsequent downgrade of the offer to reflect the impact of risks, if applicable.

5. Risk of default of the project owner

Investing in crowdfunding projects carries inherent risks associated with the potential default of the project owner. Despite a detailed assessment, comprehensive due diligence measures, and continuous monitoring, there remains a possibility of project owners failing to fulfil their financial obligations. This may be caused both by project owner related factors, such as deterioration of its financial stability, poor project management or operational challenges, and factors related to the external environment, including, but not limited to market volatility, adverse macroeconomic changes, challenges of political or legal environment, or a combination thereof.

FUNDAUS performs scrutinous monitoring of payment obligations of the project owners. In case of payment delay, exceeding 30 days, the project offer is downgraded and loan interest rate is increased to reflect the growth of the risk. In the event that payment delays exceed 90 days, the loan is admitted as defaulted and debt recovery process is started. All proceeds of the recovery are distributed between the Platform investors.

To mitigate the negative consequences of project owner’s default, all Platform loans are secured with a 1 st rank mortgage and (in most of cases) a commercial pledge, registered in favour of FUNDAUS, being the agent and representative of investors’ interests in debt recovery process. As maximum Loan-to- Value (LTV) applied does not exceed 70% of the market price of collateral, there is a good opportunity to recover the debt in full; however, in case of negative market fluctuations, affecting the price of collateral, there is still a probability that the recovery of the entire amount of investment may be impossible; also, despite we take our best efforts, there is no deadline for debt recovery.

6. Risk of reduced, delayed, or non-existent profits

Investing in projects through crowdfunding entails the potential for varying returns, including the risk of reduced, delayed, or non-existent profits. Fulfilment of payment obligations in a timely and full manner is subject to the financial performance of the project owner, which may be reduced, compared to the forecast, as a result of impact of a variety of factors, related to the project owner itself, and/or to the external environment, and its payment discipline.

We do our best efforts to assess the project and project owner objectively prior to approval of crowdfunding offer and issuance of the loan, however, forecasted performance is subject to change due to various factors and risks. The Platform provides projections in accordance with the approved methodology, but these are based on assumptions that may or may not align with actual results.

FUNDAUS aims to mitigate this risk through a comprehensive project owner and project assessment, providing transparent information and fostering informed investment decisions, and proactive monitoring, however, the risk cannot be fully eliminated.

Investors are encouraged to mitigate the risk of reduced, delayed, or non-existent profits by diversification of their portfolios across multiple projects and industries. Diversification helps spread risk exposure and enhance overall portfolio resilience, reducing reliance on individual projects for interest income generation.

7. The risk of losing the invested funds in part or in full

Crowdfunding carries inherent risks, including the potential loss of invested funds, either partially or entirely. Investments are subject to market fluctuations influenced by economic conditions, industry trends, and external factors. Each project entails unique risks based on factors such as industry dynamics, market demand, and project execution. Market volatility and specific project owner underperformance related factors may impact the loan repayment and return of investments, leading to potential losses.

FUNDAUS implements risk mitigation measures to safeguard investors’ funds and minimize the risk of loss. These measures include collateralization of projects, stringent project selection and evaluation criteria, and proactive monitoring. However, the risk cannot be completely excluded, and past performance of a specific industry or project owner is not a guaranteed indicator of future returns.

The platform advises investors to assess market dynamics and diversify their investment portfolios to minimize the impact of market volatility on overall returns. Also, the dynamic nature of real estate market and broader economic conditions introduces cyclic fluctuations, impacting property values. Unforeseen changes at the national, regional, or international levels can lead to sharp and unexpected shifts. Despite rigorous market research and certified appraisers’ valuations, these fluctuations may affect different property types to varying extents, including drop of collateral value at the moment of enforced sale much below initially assessed market value. In this case, the investment funds or a significant part thereof may be irreversibly lost.

The non-sophisticated investors are provided with possibility to calculate their net worth and loss limits, simulate their ability to bear losses and receive several warnings before the investments to use the chance to consider more seriously their plans of investments. Also, they are entitled to recall their investments within 4 days if they change their mind.

As regards all types of investors, diversification of investment portfolios across multiple projects and sectors may contribute to mitigation of this risk by reducing concentration on a sole project owner, thus spreading risk exposure. However, this should not be considered as the investment recommendation from our side. Please, ask for advice your own independent investment professionals if you consider that your knowledge and experience is not sufficient for making investment decisions.

8. Risk of non-performance of outsourced services

FUNDAUS relies on various outsourced services in order to comply with regulatory requirements and to facilitate its operations and provide essential functionalities to investors and project owners. The Platform depends on third-party service providers for critical functions such as payment processing, distant digital customer identification service, and technical maintenance. Non-performance or disruptions in the services provided by these vendors could adversely impact Platform operations, including failures and interruptions of its conventional functioning, and aggravate user experience.

To mitigate this risk, FUNDAUS conducts thorough due diligence on prospective service providers, evaluating their reliability, track record, and compliance with industry standards. In order to minimize the impact of service disruptions or non-performance by outsourced providers, the we implement redundancy measures and contingency plans, including maintaining backup systems, acknowledging alternative service providers, or having failover mechanisms in place to ensure uninterrupted Platform operations in the event of service failures or technical issues.

In the event of service disruptions or non-performance by outsourced providers, the Platform has robust business continuity plans in place to mitigate the impact on our customers. These plans outline procedures for restoring operations with a minimum or no effect on critical services, and notification of the investors, prioritizing user support and communication to mitigate the impact of service disruptions or non-performance by outsourced providers, however, this risk cannot be completely eliminated.

The scope of risks pertaining to investments security is the risk of payment service provider’s malfunction or default that may cause a temporarily or permanent inability for the customers to Platform’s services or to withdraw their funds from the payment account until another payment service provider is secured and its technical environment is fully integrated with the technical environment of the Platform.

To enhance the protection of the funds of the investors and those of the project owners, when opening an account with a payment service provider, the Company will always give a priority to a custodian bank, duly registered in the European Union with prime ratings. At this moment, such custodian bank of our present payment service provider, Lemonway SAS, is BNP Paribas S.A. (France) with the following current ratings (as of the date of approval of this version of the Plan): A+ (Standard & Poor’s), AA- (Fitch), A2 (Moody’s), AA (DBRS), as well as Barclays, Crédit-Mutuel CIC, etc.

9. Risk of termination of the Company’s operations

Despite we take all efforts to stay at all times regulation-compliant and transparent to our customers and regulatory bodies and have long-term plans for operations and development, there is still a risk of voluntary or forced termination of operation as a result of lack of financial capability of the shareholders, bankruptcy, or revoke of ECSP authorization. For the event of this negative outcome, FUNDAUS has all necessary measures in place to minimize the financial and technical consequences for our customers.

The funds of investors and the project owners are kept separately from the Company’s funds on the subaccounts, opened on the name of the Company with its payment service provider, Lemonway SAS. These funds are not owned by the Company and are unavailable for its business operations. Therefore, in case of insolvency of FUNDAUS or seize of its operations, the Company’s creditors will have no possibility to satisfy their claims from the property of the investors or project owners.

A certification of acknowledgement is provided to the Company by Lemonway SAS that the funds of the investors’ and project owners’ accounts belong respectively to the investors and project owners and will not be used to settle the liabilities of the Company or other parties.

The first legal charge that we take out on all property projects on your behalf, would still stand, if FUNDAUS became insolvent, and so would be any other collaterals. This would continue to safeguard investors’ money, so even in case of failure of FUNDAUS an appointed insolvency administrator would operate on investors’ behalf, including takeover of debt recovery to repay the funds of defaulted loans to the investors.

While crowdfunding service-related risks cannot be entirely eliminated, we take every effort to ensure maximum investor protection protect investors and provide transparency in the face of potential challenges.

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