Frequently Asked Questions
Determining which companies earn publication is the joint decision of the business owner, the portal operator, and the broker-dealer. All companies must make available the requisite level of due diligence to enable prospective investors to make an informed investment decision.
Breakaway Funding will not opine on the feasibility of the business plan or the quality of the presented companies. The responsibility for the investment lies solely with the investor, and investing in private companies involves risk.
A broker-dealer is a company or organization engaged in the business of trading (buying and selling) of securities. Broker-dealers are regulated under the Securities Exchange Act of 1934 by the Securities and Exchange Commission, a unit of the U.S. government and therefore must be licensed to engage in this business activity.
Investing in a private company always carries risk, and every investor is responsible for his or her own investment decisions. Breakaway Funding does not comment on the quality of entrepreneurs and companies, nor on the feasibility of their respective business plans.
Investments in private securities are high-risk opportunities and these companies may not retain their value. Investing in startups and small businesses is inherently risky and standard company risk factors such as execution and strategy risk are often magnified at the early stages of a company. In the event that a company goes out of business, your ownership interest could lose all value. Furthermore, investments in private companies and startups are illiquid instruments that typically take between three and seven years (if ever) before exit.
While there are no guarantees that this strategy will reduce your risk, most investors choose to mitigate risk by practicing portfolio diversification. Investing smaller amounts across a large number of opportunities is good practice in the private markets just as it is in the public markets.
More information on the risks of investing can be found in the private placement agreements for each individual investment. Breakaway Funding has a contractual agreement with the business owners to produce financial reports, business plan updates, and more.
Yes, each company (“Issuer”) choosing to raise capital through Breakaway Funding will have access to our community capital team, comprised of former bankers with 30+ years ‘ experience in the banking industry. Issuers learn what is required to raise capital via the Breakaway platform, what are the components of a comprehensive due diligence package and what their responsibilities to investors are after the raise is complete.
An executive summary, a business plan including 5-years of financial projections, historical financial statements (if applicable), industry peer analysis report, the private placement memorandum, outlining risks of the investment.
Investors will also have access to a financial sensitivity tool, a dynamic spreadsheet where they will be able to change up to eight (8) different business plan projection assumption and view the changed financial results immediately.
Once you have registered as an Investor (REGISTER) and have selected your investment preferences (e.g. what industries you like, whether you are looking to invest in debt or equity, etc.), a listing of each available investment opportunity will be available for you to review. Select the companies you are interested in reviewing. In the Document Center you will be able to access a variety of due diligence information, including the private placement memorandum.
We encourage investors to ask questions.
Each company who completes a successful capital raise will be required to keep their investors informed via our Investor Relations Services Agreement. Investors will receive periodic financial statements, tax return documents and other information via the Breakaway platform.
Maybe. Breakaway Funding’s broker-dealer, Nobles & Richards, will confirm all investor qualifications to ensure they that have the legal source of funds from which to invest.
The tax implications will vary with each investment. We encourage you to talk with your accountant or tax advisor before investing. We do not give tax advice.
The identities of the Issuer requesting team are all verified through a comprehensive background review and we mandate that each company provide their articles of incorporation to our documents repository for your review. Each investor, however, is ultimately responsible to conduct due diligence independently and should only make investments which meet their investment strategy, risk tolerance, and level of comfort.
Any private U.S. company is eligible to raise funds on the Breakaway Funding platform. This includes companies engaged in import / export activities. Typically, these are existing companies with good growth potential or startup companies.
Companies listed on the Breakaway Funding platform are privately-held companies and their shares are not traded on a public stock exchange. As a result, those shares cannot be easily traded or sold. As an investor in a private company (and should the company you invest in be successful), you may receive a return on your investment under the following three scenario examples:
- The company gets acquired by another company
- The company goes public (undergoes an initial public offering on the NASDAQ, NYSE, or another exchange)
- The company institutes a stock repurchase program.
For debt instruments, the return of principal and the payment of interest are determined by the documents creating the debt instrument and defining the rights and obligations of the debtor thereunder. Payments of principal and interest may be periodic (i.e., monthly, quarterly or annually) or may be made at the end of the term of the debt obligation. You are urged to carefully read the debt instrument as that contains important information relating to the rights and obligations, including the payment obligations, of the debtor.
There are significant risks associated with investing in equities and debt of privately-held companies and no assurances can be provided that an investor will realize any return on their investment and may realize a loss of some or all of his or her investment.
The investment process may be slightly different for each investor, depending on their personal investing preferences, but generally can be described as follows:
- Investors must first create an account and register as an investor.
- Identify and track investment opportunities that meet your investment criteria.
- Invest in opportunities you like. Please review the terms of the investment thoroughly and consult your tax, accounting and investment advisors as necessary.
- Once comfortable with the investment terms, you can invest by initiating a funds transfer.
- This will initiate the funding process under which you will be asked to:
- Enter your investment amount
- Verify your identity and accreditation status
- Execute the required legal agreements
- Enter the account informationur funding account
- Once you confirm your investment, the funds will be transferred to an escrow for holding until the fundraising round is closed
- Only when the fund raise is fully realized will proceeds transfer to the issuer.
If you would prefer to complete this investment process over the phone, please contact at (844) 871-3400. Our team is here to assist you.
Once the fundraising round closes, you will receive confirmation. In the case of an unsuccessful round or a canceled investment by yourself, the proposed transaction will be cancelled and the escrow agent will return the funds from the escrow back into your bank or brokerage account.
Investment funds are transferred from your bank or brokerage account to the escrow account until the fund raise minimum is realized. When the campaign is realized, the escrow company will transfer the funds into the company’s bank account.
You must register as an investor before you can view any Offering.
Once you have been established as an investor, you will receive login credentials and an opportunity to review offerings currently active. You will not have access to campaigns that have termed out or have fully funded. Breakaway Funding maintains a fully secure documents repository regarding our Issuers and their campaigns. You will have access to all documents available to help you make an informed investment decision.
Yes. Breakaway Funding has partnered with GoldStar Trust, a subsidiary of Happy State Bank in Texas. Funds are fully insured up to the maximum permitted by the F.D.I.C.