What is an indirect participation?
Indirect participation gives you access to investments in limited liability companies (GmbH) via a special purpose vehicle – simplified, flexible and optionally registered on the blockchain.
Why an indirect participation?
Shares in a GmbH can only be transferred by notarial deed. This transfer is complex, time-consuming and costly. At the same time, the GmbH is the most common corporate form among small and medium-sized enterprises (SMEs).
Many established SMEs need equity in order to invest and grow. Our solution enables a flexible participation via a special purpose vehicle (SPV) that issues participation certificates.
Special purpose vehicle
SPV as the link
Tokenisable
Optionally on the blockchain
Type of capital
Equity
How does it work?
- 1
Setting up the special purpose vehicle
CONDA sets up a special purpose vehicle (SPV) whose sole purpose is to invest in the respective target company and which issues participation certificates.
- 2
Issuance of participation certificates
The special purpose vehicle issues participation certificates that reflect the economic stake in the target company. These can optionally be registered (tokenised) on the blockchain to enable easier transferability.
- 3
Participation in the target company
With the capital raised, the special purpose vehicle acquires shares in the target company and thus becomes its shareholder.
- 4
Profit distribution
If the target company generates profits and distributes them, the special purpose vehicle passes these distributions on proportionally to the holders of the participation certificates.
Return opportunities
Pro-rata profit distributions
Proportional pass-through of the company's profits
Exit participation
A share in the sale proceeds on an exit of the target company
Transferable participation certificates
Easier to transfer than direct GmbH shares
Advantages
For investors
Participation in the profits and value growth of established SMEs
Diversification of the portfolio with SME investments
Easier transferability than direct GmbH shares
Entitlement to pro-rata profit distributions from the target company
A share in the sale proceeds on an exit of the target company
For issuers
Raising equity without a complex notarial deed
Flexible access to investors, even for GmbH structures
Simplified processing via the special purpose vehicle
Optional: blockchain registration for easier transferability
Important notes
You are not a direct shareholder of the target company, but a holder of the special purpose vehicle's participation certificates
The special purpose vehicle's administrative costs and fees reduce the distributions
Shareholder rights (a say, information rights) lie with the special purpose vehicle, but are represented through it
Risks
Risk of total loss
In the event of the target company's insolvency, you can lose your entire invested capital.
No influence
As a holder of participation certificates, you have no direct influence on the management of the target company.
Dependence on the SPV
You depend on the proper administration by the special purpose vehicle.
Liquidity risk
There is no regulated secondary market – selling your stake early can be difficult.
Risk warning
These are high-risk investments that are rarely secured. Only invest if you can also afford to lose all of your invested money. Your investment is not protected by the European deposit guarantee schemes.
Invest indirectly in SMEs now
Discover current offerings on CONDA Capital Market and participate in the success of established small and medium-sized enterprises.