FAQs - Crowdinvesting

 

What is the reason you opted for crowd investing?
We have successfully completed a financing round just now, and have decided, we want to offer you the possibility to accompany us on our journey and to profit thereof as well. After all, you are the community, the ❤ of neon. We plan to deploy the additional capital raised to grow quicker, by using the resources for more product innovation, an even more seamless user experience and additional growth of client number. This way, we ensure, that the change we bring to the Swiss market is of a sustainable nature

 

What is crowd investing?
Crowd investing is a form of financing, whereby many private individuals participate in financing young enterprises, usually through a platform, with «lower amounts of capital» than professional investors. Neon has opted to offer a minimum investment of CHF 507 for three non-voting shares and a maximum of CHF 49,855 for 295 non-voting shares.

 

Do I already commit to an investment if I sign up on the investment platform?
No worries! A registration for the investors platform only provides you with the option to get more information and additional details on the crowd investment – you do not commit to anything, solely through the registration. You do however get the fairly exclusive chance to become one of our first crowd investors.

 

Who can invest?
Generally, any neon client,

  • who is at least 18 years of age.
  • who is 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.
  • who is not a politically exposed person “PEP”
  • who is not a national of any of these countries: Afghanistan, Burundi, Central African Republic, Cuba, Democratic Republic of the Congo, Eritrea, Ethiopia, Iran, Iraq, Laos, Libyan Arab Jamahiriya, Myanmar, Korea (North Korea), Occupied Palestinian Territory, Pakistan, Somalia

As we owe our growth to our clients, we only want to offer our clients the chance to invest into neon.

 

What happens once I have signed up?
Until the subscription process starts on 28 June 2021, you will get all the information on and around neon, invitations for Q&A sessions, facts and figures, so that we can further show you how cool neon really is.

 

How much money can I invest?
The minimum investment is CHF 507 for three non-voting shares [participation certificates], the maximum is CHF 49’855 for 295 pieces.

 

What do I get from my investment?
If you decide to invest into neon, you will automatically be a shareholder and participate in the future financial success of neon as such. Moreover you will receive a safe wallet through which you will be able to hold your shares safely.

 

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 and Myke Naef, founder of doodle. Moreover large, financially strong enterprises, such as the TX Group (former Tamedia) and the Helvetia Insurance Group or 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 or 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. If we refer to «shares» we refer to the shares, which you may buy, we refer to 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 profit similarly to common shares from profits of neon – it is only the right to vote in the annual general meeting that is missing.

 

Why did you opt for non-voting shares (participation certificates)?
Non-voting shares (participation certificates) have the same financial advantages as common shares have, however, they permit 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 put into force 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.

 

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 be the dire consequence.

 

What is the tax effect of my investment?
While your non-voting share may be issued purely digitally, it is treated like any other more traditional share. For you this means that you must declare the value of your securities as you would with any other share that you buy. The same applies in case you would receive a dividend – you would need to declare it as income from securities.

 

What return can I expect?
We do not guarantee any return at all on this investment. Once neon makes profit 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.

 

So is neon already profitable?
At this point in time, neon is not yet profitable. This depends strongly on our strategy for growth chosen. It is our vision to become the largest bank challenger in Switzerland. This means, that we focus more on growth, than on profitability for the moment. We plan to become cashflow positive by the year 2023 (meaning that we want to be profitable as of that point in time)

 

What’s my risk in this?
Generally, you could lose all the money you have invested into the neon shares. Nobody wants this of course, neither we nor our other investors. Which is why we work daily, wholeheartedly on making neon second to none.

 

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. In case of an additional financing round, the underlying valuation for the enterprise, and, accordingly the value of the shares will be communicated.

 

Can I sell my shares?
For the time being you can’t. Your shares are subject to a lockup period of two years until 30 June 2023 (until then you cannot transfer or sell shares). Do not invest money, that you do need to live ahead of that date.

 

What happens with my shares in case of a sale of the company («exit» in technical jargon)?
Should a sale of neon occur, your shares are immediately converted to stable coins of the same value, which you can think of as a Swiss franc on the blockchain. You can freely convert this stable coin into fiat Swiss francs through Sygnum and receive them onto your bank account

 

What exactly is a «Token»?
A «Token» in this case is a security. Like shares used to be printed to a piece of paper when issued, a token is a cryptographic issuance of a security. All transactions which are done with this security are publicly recorded in so called ledgers, so technically a public shareholders register. Differently than e.g. Bitcoin, this is not a means of payment, it is a security.

 

Who or what is Sygnum?
Sygnum is the first bank worldwide, that has been conceived for digital assets only (blockchain-based / DLT based assets). Sygnum is headquartered in Zurich, is a fully licensed Swiss Bank and hence supervised by FINMA.

 

Why is there a lockup period on my shares?
neon wants to go the way 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 of 2 years until 30 June 2023.

 

Which token standard is applied?
The token will be based on an ERC 20 standard on Ethereum main net.

What is the current valuation of neon?
neon currently has a share capital of CHF 303,824.00, divided into 93,336 ordinary shares and 210,488 preference shares at CHF 1.00 each. At an issue price per share of CHF 169.00 according to the current financing round, the calculated enterprise value of neon is therefore approximately CHF 51.3 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.

Is the issue amount (purchase price) of the participation certificates identical to that of the shares to be subscribed by the professional major investors?
Yes. Parallel to the crowd-investing round (issuance of participation certificates), an investment round will take place for professional large investors who could not be included in the first part of Round B in May 2021 in terms of time, whereby shares worth a maximum of CHF 5 million are to be subscribed. The issue price for both the shares and the participation certificates is CHF 169 per share. neon thus treats crowd investors in the same way as professional investors.

How are the investment tokens issued?
The investment tokens are issued within one year of the subscription of the participation certificates. They are subject to a holding period until 30 June 2023 at the latest - this means that you cannot sell the tokens until then. We want to avoid that the neon tokens are bought purely for speculation and immediately sold again. After that, however, you can sell your neon tokens if you wish.

Will the token be tradable via a platform afterwards?
Whether and how the investment tokens will (be able to) be traded after the holding period, i.e. from 30 June 2023, is still open. In principle, an issue on ERC20 standard is planned so that we could enable trading. However, because as far as we know there is no fully functional trading platform at this point in time, we will closely monitor developments over the next two years and then make an informed decision. Blockchain technology is changing rapidly - we certainly don't want to commit to a path today that may no longer make sense in two years.
At this point in time, we do not in any way want to hold out the prospect of a trade (organized by us) - but the technical prerequisites for such a trade are of course "on our radar".