FAQs - Crowdinvesting
Why did you opt for crowd investing?
In June 2021, neon was one of the first Swiss start-ups to do a crowdinvesting with more than one million Swiss francs. At that time, we planned to raise at least CHF 500’000 up to an upper limit of CHF 1’500’000. Contrary to our expectations, the crowdinvesting experienced such great interest that we had to raise the limit to CHF 5’000’000 and even then we were sold out after a very short time.
In order to be able to offer new products such as stock and ETF trading, as well as crypto trading in 2023, we decided to carry out another financing round. Similar to the previous year, we were already able to close a preliminary round with professional investors. Due to the high demand, many crowd investors did not have the chance to subscribe to participation certificates last year. That´s why we have decided to offer another crowdinvesting round to give everyone the opportunity to become an investor of neon.
We are happy about every loyal customer who wants to accompany us on our journey and we want to give you the opportunity to profit from it as much as possible. After all, our community is at the heart of neon.
In contrast to last year, we plan to use the money not only to enable further customer growth, but also to increase neon's profitability. Our goal is to reach break-even in 2025 despite increased costs, because only successful companies can exist in the long term. We want to offer new products in order to provide existing customers with more benefits and at the same time enter new markets.
Do I already commit to an investment if I sign up on the investment platform?
No. Don’t worry, a registration on the investment platform will provide you with the possibility to obtain more information and additional details on the investment - you do not commit to anything by registering. You do, however, get the exclusive opportunity to become one of our crowd investors.
Who can invest?
Generally, any neon client who is
- at least 18 years of age;
- not incapacitated, overindebted, insolvent or unable to pay debts and has the authority to enter legally binding contracts;
- Swiss-domiciled (not a c/o-address);
- not a US-person;
- not a resident of, citizen of or located in geographic areas that are subject to UN-, US-, EU-, Swiss or any other sovereign country sanctions or embargoes;
- not a politically exposed person ("PEP");
- not a national of any of these countries: Afghanistan, Burundi, Central African Republic, Cuba, Democratic Republic of the Congo, Eritrea, Ethiopia, Iran, lraq, Laos, Libyan Arab Jamahiriya, Myanmar, Korea (North Korea), Occupied Palestinian Territory, Pakistan, Somalia, Russia;
What happens once I have signed up?
Until the subscription process starts on 25 October 2022, you will get all the information on and around neon, invitations for Q&A sessions, as well as facts and figures, so that we can further show you how cool neon really is.
How does the "preliminary round" work?
Because many registered customers did not have the opportunity to subscribe to participation certificates last year, and because the demand on the "crowd day" was overwhelmingly high, we are offering existing investors and all other interested parties who registered last year the opportunity to subscribe to non-voting shares (participation certificates) already from 6 October 2022 onward. Depending on the demand, we also have the possibility to increase the total tranche for the crowdinvesting, if necessary.
How much money can I invest?
The minimum investment is CHF400 for two non-voting shares (participation certificates), the maximum is CHF50’000 for 250 pieces.
What do I get from my investment?
lf you decide to invest in neon, you will automatically be a shareholder and, as such, participate in the future financial success of neon.
Who else has invested into neon?
Well known investors of neon are Roland Brack from brack.ch, Entrepreneur Bettina Hein, Pascal Meyer, CEO of QoQa, Myke Naef, founder of doodle and Lukas Speiser, founder and CEO of amorana.ch. Moreover, large and financially strong enterprises, such as the TX Group (former Tamedia) and the Helvetia lnsurance Group, as well as professional investors such as Backbone Ventures are investors of neon.
What are non-voting shares (Participation certificates)?
Participation certificates are non-voting shares. The holder of a non voting share (participation certificate) has the same ownership rights as does the holder of a common share, except for the voting right and rights associated with it. When referring to «shares» we refer to the shares which you may buy, meaning the outlined non-voting shares or «participation certificates» as defined by the Swiss Code of Obligations.
As a holder of non-voting shares, you will benefit from profits of neon, similar to holding common shares – with the exception of the right of participation and vote in the annual general meeting.
Why did you opt for non-voting shares (participation certificates)?
Non-voting shares (participation certificates) have the same financial advantages as common shares, however, they allow us to have simple decision finding processes, leaving us agile and able to find pragmatic solutions.
Why do you use tokenized shares?
On 1 February 2021, the federal council has partly put into effect the «DLT Law» (Vorlage betreffend Anpassung des Bundesrechts an Entwicklungen der Technik verteilter elektronischer Register). Hence, it is possible to issue shares (participation certificates) in the form of cryptographic tokens, which are represented on the blockchain. This in turn implies a huge increase of efficiency in terms of the administration and custody of these securities, in particular for the time from which the participation certificates may be traded.
Who are you using for tokenisation and how will trading take place?
Daura will act as the tokenisation platform and enable trading from 1 July 2023 onward. For the time being, the tokens will only be tradable through Daura. Both tokens from the Crowdinvesting Round 2021 and from the Crowdinvesting Round 2022 will be issued on the Daura platform. Token holders will receive the link to the pre-filled account after the capital increase has been notarised, and will have immediate access to the tokens after the first login with a one-time password. Within less than a year, the tokens will then be tradable on 1 July 2023.
Do I get my money back?
There is no 100% certainty that we could vouch for. In the worst case, if neon would become insolvent or go bankrupt, a total loss of capital might result.
What is the tax effect of my investment?
Regardless of whether your non-voting share (participation certificate) is issued digitally (token) or whether you simply want to be entered in the share register: each participation certificate is handled like a traditional security. With your tax domicile in Switzerland, this means that you must report the value of your acquired securities as part of your assets and any dividends must also be taxed.
What return can I expect?
We do not guarantee any return at all on this investment. Once neon becomes profitable though, you will directly profit thereof. How much profit per share will be distributed, is a decision taken by the annual general meeting. Often, securities also experience an increase in value as the value of the company grows. In the case of last year's crowdinvestors, the value per token rose from 169 Swiss francs to 200 Swiss francs in the new financing round. This corresponds to an increase in value of approximately 18% within a year. We cannot predict, let alone guarantee, whether a similar increase in value will take place in future years. We can only promise you that we are working hard for it.
So is neon already profitable?
At this point in time, neon is not yet profitable. For the past year this depended strongly on our chosen strategy for growth. Our vision is to become the largest bank challenger in Switzerland. This meant that we had prioritised growth over profitability. Now, however, we are no longer only focusing on growth, but also on profitability. To achieve the goal of becoming profitable, we want to introduce new products and stir up new markets, especially in equity and ETF trading, but also in crypto trading. The goal is not simply to raise prices and thus align with the competition in terms of price levels, but to introduce new products that increase the benefits for our customers.
What's my risk in this?
Generally speaking, you could lose all the money you have invested into the neon shares. Nobody wants this of course, neither we nor our other Investors. This is why we work hard every day to make the best out of neon.
Do I see the value increase of my share?
For the time being you will not see the change in value of your share, as it is not listed on any exchange, and hence there is no observable price. Nevertheless, you will be able to see the tax value and the market value as well as its change over time via the Daura platform. Once the tokens are traded on 1 July 2023, there will also be an observable market price as an indication of the value of your securities.
Can I sell my shares?
For the time being you can't. Your shares are subject to a lock-up period until 30 June 2023 (until then you cannot transfer or sell shares). Do not invest money you need to live.
What happens with my shares in case of a sale of the company (a.k.a. «exit» in technical terms)?
In the event of a sale or an IPO, i.e. a listing on a stock exchange, your shares will automatically be blocked and you will receive the same price per share as the professional investors, provided that you are still in possession of your neon participation certificates at that time.
What exactly is a «Token»?
A «Token» in this case is a security. Just like shares used to be printed on a piece of paper when issued, a token is a cryptographic issuance of a security. All transactions that are done with this security are publicly recorded in so-called ledgers, which is technically a public shareholder register. However, unlike Bitcoin, for example, the token is not a means of payment, but a security (so-called register uncertificated security).
Who or what is Daura?
Daura is a platform held by Swisscom, the Swiss stock exchange SIX and other investors. It focuses on issuing securities as tokens and can make them tradable in an energy-efficient way via its own network, a so-called "private ledger".
Why is there a lockup period on my shares?
neon wants to continue on this path together with you. We don't want you to buy the share for short term speculation, hoping for quick cash. The idea is to grow together, hence the lockup period until 30 June 2023.
What is the current valuation of neon?
neon currently has a share capital of CHF321’082, divided into 93’336 ordinary shares and 227’746 preference shares at CHF 1.00 each, as well as 29’585 participation certificates at CHF 1.00. At an issue price per share of CHF 200 according to the current financing round, the calculated enterprise value of neon is therefore approximately CHF 70 million. This valuation is based on the issue price per share in the current financing round. The valuation of start-up companies such as neon is difficult and is therefore associated with great uncertainties and risks. Large upward and downward fluctuations in value cannot be ruled out.
ls the issue amount (purchase price) of the participation certificates identical to that of the shares subscribed by the professional investors?
Yes. Parallel to the crowdinvesting round (issuance of participation certificates), an investment round for professional investors took place. The issue price for the shares as well as for the participation certificates is 200 Swiss francs per share. neon treats crowd investors in the same way as professional investors.
How are the investment tokens issued?
The tokens will be issued to pre-opened securities accounts for all investors immediately after notarisation via Daura. All you have to do is set a secure password and from then on you have access to the securities.