What is a participation certificate?
A participation certificate allows you to share in a company's profits – without becoming a co-owner. Depending on how it is structured, participation in the company's value is also possible.
The participation certificate at a glance
A participation certificate can be structured very flexibly. For investors, the term, repayment, profit-sharing and possible participation in the company's value are particularly decisive for return and risk.
You share in the entrepreneurial risk – but also have the chance of above-average returns if the business performs well.
No voting rights
No direct ownership
Profit-sharing
Depending on success
Type of capital
Mezzanine capital
Features in detail
Term
Participation certificates usually have a fixed term of several years – either with maturity at the end or with termination rights that are waived for a certain period.
Repayment
At the end of the term, investors get back the money they originally invested – but only if the company is solvent.
Profit-sharing
Regular distributions that depend on the company's success: as a fixed interest rate, a percentage profit share or a combination of both. If the company makes no profit, distributions may be omitted.
Participation in company value
With some participation certificates, you additionally benefit from the increase in the company's value – e.g. through a share in the sale proceeds or bonus payments at certain company valuations.
Return opportunities
Regular distributions
Depending on the company's success
Usually a fixed term
Of several years
Type of capital
Mezzanine capital
Advantages for investors
Your opportunities
A share in the company's profits
Flexible structure: fixed interest rate, profit-sharing or a combination
Possible participation in the increase in the company's value
Fixed term with a repayment claim subject to solvency
Risks
Distribution risk
If the company makes no profit, you may receive no distributions or only small ones.
Repayment risk
Repayment at the end of the term depends on whether the company is solvent.
Risk of total loss
These are high-risk investments that are rarely secured. Your investment is not protected by deposit guarantee schemes.
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 in participation certificates now
Discover current participation certificates on CONDA Capital Market and benefit from the success of innovative companies.