Investor Education Package for Rule 506(c) Offerings
This Investor Education Package is intended to provide you with important information about investing through our Site. We’ll try to explain:
- What we do, and how we do it
- The process for investing
- The risks associated with investing
- The different types of securities that may be offered on our Site and some of the risks associated with each type
- Restrictions on your right to sell investments you purchase on our Site
- Our relationship with the Issuers on our Platform, including information about the compensation we will receive from them
We expect to update this document from time to time.
1. What you should consider first
Investing in the companies that will be offered on our Site is very different than investing in the public stock market. The companies at our Site might be small, with limited or no track records, unproven business models, little profits or even revenue, and managed by individuals with limited experience managing successful businesses.
With all those caveats, and even in view of the risks listed in the "Risks of Investing" section below, we believe that the companies on our Site will offer excellent opportunities, both to make money and to invest in things you know and care about. But what we believe doesn’t matter. The first thing for you to consider, before you go further, is whether it is appropriate for you to invest in any of these companies based on your own personal circumstances. Among the questions you should ask yourself are:
- Can I afford to lose all the money I invest?
- Do I understand the company I am thinking about investing in? Do I understand its product or service? Am I personally familiar with that market?
- Do I understand the business the company is conducting? Do I understand how the company can make money?
- Do I understand the Security I'm buying?
- Do I trust the owners and managers of the company?
- Do I understand the documents I'm being asked to sign?
- Have I asked my advisors for help evaluating the investment?
- If I lose all or part of my money, will I be okay psychologically?
Only if you can truthfully answer Yes to all those questions should you invest.
These definitions apply throughout this Investor Education Package:
Site - Our Internet site located at www.redcrow.com.
Platform - Another word we use to refer to our Internet site.
Issuer - A company trying to raise money from investors on our Site, by selling its Securities.
Security - A share of stock, a promissory note, a bond, or any other instrument offered by an Issuer on our Site.
Rule 506(c) - Rule 506(c) issued by the SEC under Regulation. Formally, 17 CFR §230.506(c)
SEC - The U.S. Securities and Exchange Commission. The website: www.sec.gov.
Accredited Investor - An investor who is "accredited" within the meaning of 17 CFR §230.501(a). An individual is "accredited" if he or she (i) earned at least $200,000 in each of the last two years and expects to earn at least $200,000 in the current year, (ii) earned at least $300,000 in each of the last two years with a spouse and expects to earn at least $400,000 in the current year, or (iii) has a net worth of at least $1,000,000, excluding his or her personal residence.
3. What we do
We are a platform that lists investment opportunities in the health care industry.
Think of us as a marketplace, or a shopping mall, bringing together companies and investors. When you invest, you are not investing in us or in any entity affiliated with us. You are investing in a third-party business that has chosen to raise money using our marketplace.
As an intermediary, or marketplace, we do not guarantee any particular outcome and are not responsible for what happens to your investment – all investments are undertaken at your own risk. We also do not guarantee the accuracy of the information you receive from issuers. Our job is to facilitate investments and help ensure that transactions between investors and issuers meet legal requirements.
Right now, all of the investment opportunities at our Site are offered under Rule 506(c), to Accredited Investors only. We might add other kinds of offerings later.
This Isn’t "Regulation Crowdfunding"
The word "Crowdfunding" is used to describe several different things:
- Platforms like Kickstarter, where people donate money, receiving nothing in return except "rewards"
- Platforms like ours, where companies seek investments from Accredited Investors under Rule 506(c)
- Platforms where companies seek investments under the SEC’s Regulation A, also called "Title IV Crowdfunding"
- Platforms where companies seek investments under "Regulation Crowdfunding" or "Title III Crowdfunding"
At some point in the future, we expect to offering investment opportunities under both Regulation A and Regulation Crowdfunding, either directly or through affiliated companies. But for now, we offering opportunities only under Rule 506(c).
What We Do
- Select which Issuers to list on our Platform
- Using information from the Issuer, prepare descriptive material for the Platform
- Screen Investors to ensure they are Accredited Investors
- Provide search functions or other tools for Investors
- Provide educational materials to help you assess the risks of investing (e.g., this document)
- Provide the functionality for Investors to invest in Issuers they select
- Provide communications channels where the Issuer and potential investors can exchange information
- Provide follow-on functionality so investors can track their investments
What We Don't Do
- Offer investment advice or recommendations
- Guarantee any particular investment outcome
- Speak to investors about the merits of any particular company or offering
- Verify that information provided by an Issuer is correct
Our Relationship with Issuers
Issuers will pay us to be listed on our Platform. They might pay us in cash or with stock, options, or other securities. They might also pay us for specified services we provide to them, and reimburse us for expenses we incur on their behalf.
After an offering is complete, we might or might not have an ongoing relationship with the Issuer. The Issuer may decide to use our Platform to raise money in the future, or use services provided by (and pay compensation to) entities affiliated with us.
We will maintain online communications channels – chat rooms, basically – where you can communicate with other investors and with the Issuer. All discussions on the chat rooms will be open to the public, but only investors who have registered with us are allowed to post. Representatives of the Issuer, and anyone engaged in promoting the offering, must clearly identify themselves as such. The chat room is where you can ask questions about investment opportunities that interest you.
We generally won’t participate in the chat room, except to establish guidelines and remove potentially abusive or fraudulent content.
4. How we screen issuers
We screen Issuers in two ways:
- We run background checks on the Issuer and its principals to determine whether the Issuer is disqualified from raising money using Rule 506(c) under the rules discussed under "Disqualification of Issuers" below.
- We perform "business due diligence" on the Issuer, its business model, and its management team.
The fact that we have accepted an Issuer onto our Platform does not mean we recommend that you invest in that Issuer. We do not and will not give investment advice, or tell you we believe one Issuer represents a better investment opportunity than another Issuer. You have to make those decisions on your own.
5. Disqualification of issuers
Rule 506(c) may not be used if the Issuer or certain other people have been the subject of certain disqualifying events during the last 10 years.
The "certain other people" are:
- Any predecessor of the Issuer;
- Any director, officer, general partner, or manager of the Issuer;
- A person owning 20% or more of the Issuer's voting power;
- Any promoter associated with the Issuer;
- Any person who will be paid for soliciting investors; and
- Any general partner, director, officer, or manager of such a solicitor.
The "certain disqualifying events" include a long list of events, all involving improper actions in the securities business – for example, the conviction of a felony or misdemeanor in connection with the purchase or sale of any security, or the loss of license of a securities broker for misconduct. The list of "certain disqualifying events" does not include any wrongdoing that is not related to the securities business. A person who robbed a bank at gunpoint would not be prohibited from selling securities under Rule 506(c) by these rules, for example.
As explained above, we will conduct background checks before allowing an Issuer to list on our Platform.
6. The kinds of securities we will offer
We could offer any kind of Security on the Platform, including:
- Equity Securities – When you buy an "equity security," like the common stock of a corporation, you become an owner of the company. The value of your interest fluctuates with the fortunes of the company; if the company does well the value of your interest goes up, while if it does poorly the value goes down, possibly all the way to zero. As an owner, you generally have the right to share in any profit distributions made by the company, and you also share in the appreciation in the value of the company. Owning an equity security in a company is like owning a house, both the good part and the bad part. When a company dissolves, the owners of the equity securities are paid last, after all the creditors.
- "Preferred" Equity Securities – In some cases, a company will offer a "preferred equity security," like the preferred stock of a corporation. Typically, the holders of the preferred equity security have a right to receive distributions before the holders of the regular equity securities. For example, the holders of a preferred stock might have the right to receive a 4% dividend before dividends are paid to the holders of common stock. But preferred equity is still equity. The holders of preferred equity are paid after creditors.
- Debt Securities – When you buy a "debt security," like a promissory note or bond, you do not become an owner of the company. You are, instead, a creditor. As long as the company has enough money to repay your loan, plus any interest you’ve been promised, the value of your security stays the same; the fluctuations of the fortunes of the company don’t affect you, unless the fortunes go way down. On the other hand, you don’t share in the appreciate if things go well. If the company increases in value 100-fold, you just have the right to get your money back, plus interest.
- Hybrid Securities – Some securities, which we call "hybrid securities," have characteristics of both equity securities and debt securities, like a cross between a dog and a horse.
- Revenue-Sharing Notes – A regular debt security requires the Issuer make specified payments of interest and principal at specified times. In contrast, a revenue-sharing note requires the Issuer to pay a specified percentage of its revenue. For example, a revenue-sharing note might require the Issuer to pay investors 5% of its revenue for four years. Typically, a revenue-sharing note will also state a maximum that investors are entitled to receive (e.g., double their investment) and a due date for repayment of the original investment.
- Convertible Securities – Some securities, which we call "convertible securities," start out as one kind of security but can be changed – converted – into a different kind of security. For example, a company might issue a debt security that can be converted by the holder into common stock at some specified time. Sometimes the conversion is triggered at the option of the holder, sometimes at the option of the company, and other times upon the occurrence of a specified event.
- Callable Securities – Any kind of security can also be a "callable security," meaning it can be "called," or redeemed (bought back) by the company.
- Other Kinds of Securities – The possible kinds of securities are limited only by the imaginations of financial needs of companies, investors, and lawyers.
When you review the opportunities at the Site, each opportunity will explain what kind of Security is being offered.
7. How to invest
First, register at the Site. There, you will establish log-in credentials and provide us with some information about yourself.
The entire investment process happens online, through the Site. We will never send you paper, call you on the phone (except in some emergencies), or ask to meet with you.
Making an Investment
You can see investment opportunities as soon as you visit the Site. When you click on an opportunity that interests you, you will be able to see all of the information available about the opportunity (see the "Issuer Information" section below). But you won’t be allowed to invest until you register.
Once you decide to invest, click on the "Invest" button. We will ask for more information, arrange for you to pay for your investment, and asked you to sign one or more documents with the Issuer. For example, you might be asked to sign something called an "Investment Agreement."
Your Right to Cancel Your Investment
Once you sign the Investment Agreement, you do not have the right to cancel your investment.
Paying for Your Investment
You will pay for your securities using one of the options described on the Site. Your payment options might include a direct transfer from your bank account, a wire transfer, or a credit card. You might be charged a convenience fee for using a credit card.
When you invest, your money will be held in an account administered by a bank or other third-party financial institution until the offering is completed. We will not hold your money.
Confirming That You Are Accredited
The Issuer is required by Rule 506(c) to verify that you are an Accredited Investor. Most of the Issuers on our Platform will use a third party for that purpose.
Acceptance or Rejection of Your Subscription
The package you submit, including your payment and your signed Investment Agreement, is called your "subscription." The Issuer will review your subscription and decide whether to accept or reject it. If the Issuer accepts your subscription, it will notify you and the investment transaction will be complete. If the Issuer rejects your subscription, your money will be returned without interest.
8. Restrictions on resale
Once you buy a Security (e.g., a share of stock), the law generally prohibits you from selling it for one year.
An Issuer might hire a public relations firm or other third party to promote the Issuer’s offering on the Platform – for example, by talking about the offering in our chat room. Or an employee or founder of the Issuer might do the same thing. In either case, the person doing the promoting must identify himself or herself on the Platform and disclose that he or she is engaged in promotional activity. In the case of a third party, the third party must also disclose that it is being paid for its promotional activity.
9. Information the issuer will disclose
Before You Invest
Rule 506(c) does not require the Issuer to provide you with any information before you invest, all the more reason to think carefully before you invest. However, we require Issuers to provide certain basic information, including:
- The Issuer's name, address, and website
- The names of the Issuer’s directors and officers
- The risk factors associated with the investment
- The Issuer’s business and business plan
- How the proceeds of the offering will be used
- The Issuer’s ownership and capital structure
- Transactions with officers, directors, and other "insiders"
- Whether the Issuer would be disqualified from offering securities using Rule 506(c) under the "bad actor" rules, if the effective date of those rules were different
- Important developments or changes
- Any other information necessary to make the statements made, in light of the circumstances in which they were made, not misleading
NOTE: We do not verify that the information provided by the Issuer is correct or accurate.
NOTE: We do not require that Issuers provide all of the information that would be required by other kinds of offerings, including a public offering or even an offering under Regulation Crowdfunding. For example, we do not require that an Issuer provide any financial information.
After You Invest
We do not require Issuers to provide any information after you invest, e.g., annual reports.
10. Risks of investing
Many of the Securities listed on our Platform are speculative and involve significant risk, including the risk that you could lose some or all of your money. We’re described some of the factors that make these investments risky in four ways:
- First, because many of the opportunities on our Platform will be in startup or early-stage companies, we’ll describe risks common to those companies.
- Second, we’ll describe risks common to many of the companies on the Platform, not covered in the real estate or startup categories.
- Third, we’ll describe risks associated with equity securities and debt securities.
- Fourth, when you review a particular investment opportunity, the Issuer will also provide a list of risks specific to that opportunity.
The order in which these factors are discussed, either here on in the Issuer’s materials, is not intended to suggest that some factors are more important than others.
Risks Associated with Early-Stage Companies
- Early-Stage Companies Face Significant Challenges: Investing in early-stage companies is not like investing in mature, publicly-traded companies with professional management and predictable cash flows. Many of our companies on our Platform are still in the design stage and have not even finished creating their product or service. While these companies may have talented founders and innovative business plans, like any new business they will face significant challenges in turning those plans into profits, including:
- Understanding the marketplace and accurately identifying opportunities for growth
- Developing new products and services
- Developing their brands
- Responding effectively to the offerings of existing and future competitors
- Attracting, retaining, and motivating qualified executives and personnel
- Implementing business systems and processes, including technology systems
- Raising capital
- Controlling costs
- Managing growth and expansion
- Implementing adequate accounting and financial systems and controls
- Dealing with adverse changes in economic conditions
- Unfortunately, the reality is that many a significant number of early-stage companies simply never overcome these challenges.
- Issuers Often Experience Years Of Operating Losses: Most early-stage or start-up businesses can expect to incur substantial operating losses for the foreseeable future, as they develop their products and services and build out their operations. Even if a company is able to operate successfully, it may take several years before the company can generate any return for investors (if at all).
- Accurately Assessing The Value Of A Private Start-Up Company Is Difficult: Putting a value on a security issued by privately held startup or early-stage company is extremely difficult. In almost all instances, the offering price and other terms of the securities sold on our Platform were determined arbitrarily by company, and bear no relationship to established criteria of value such as the assets, earnings, or book value of the company.
- Lack of Professional Management: Most early-stage companies are managed by their founders. Very often the founder of a company is very strong in one area – for example, she might be an extremely effective salesperson or a terrific software engineer – but lacks experience or skills in other critical areas. It might be a long time before (1) a startup can afford to hire professional management, and (2) the founder recognizes the need for professional management. In the meantime, the company and its investors could suffer.
- Lack of Access to Capital: Small companies have very limited access to capital, a situation that Title III Funding Portals hope to improve but cannot fix entirely. Frequently these companies cannot qualify for bank loans, leaving the company to live off the credit card debt incurred by the founder. Capital is the oxygen of any business, and without it a business will eventually suffocate and fail.
- Limited Products and Services: An early-stage company typically starts of selling only one or two products or services, making it vulnerable to changes in technology and/or customer preferences.
- Limited Distribution Channels: An early-stage company can find it very difficult to penetrate established distribution channels. For example, a small company with only one or two products will find it very difficult to get into large retailers like Walmart.
- Lack of Accounting Controls: Larger companies typically have in place strict accounting controls to prevent theft and embezzlement. Early-stage companies typically lack these controls, exposing themselves to additional risk.
- Unproven Business Models: By definition, many early-stage companies are trying to introduce new products or services, or providing existing products or services in new ways. If they are successful, the rewards can be enormous. But consumer behavior is very difficult to change, and successful business models are very difficult to build. Often, a business model that looks promising on paper does not work out in practice.
- No Ongoing Distributions: Typically, early-stage companies do not pay dividends. Any money available is reinvested back into the business, rather than distributed to investors.
Risks Common To Companies on the Platform Generally
- Reliance on Management: Most of the time, the securities you buy through our Platform will not given you the right to participate in the management of the company. Furthermore, if the founders or other key personnel of the issuer were to leave the company or become unable to work, the company (and your investment) could suffer substantially. Thus, you should not invest unless you are comfortable relying on the company’s management team. You will almost never have the right to oust management, no matter what you think of them.
- Inability to Sell Your Investment: The law prohibits you from selling your securities (except in certain very limited circumstances) for one year after you acquire them. Even after that one-year period, a host of Federal and State securities laws may limit or restrict your ability to sell your securities. Even if you are permitted to sell, you will likely have difficulty finding a buyer because there will be no established market. Given these factors, you should be prepared to hold your investment for its full term (in the case of debt securities) or indefinitely (in the case of equity securities).
- The Issuer Might Need More Capital: An issuer might need to raise more capital in the future to fund new product development, expand its operations, buy property and equipment, hire new team members, market its products and services, pay overhead and general administrative expenses, or a variety of other reasons. There is no assurance that additional capital will be available when needed, or that it will be available on terms that are not adverse to your interests as an investor. If the company is unable to obtain additional funding when needed, it could be forced to delay its business plan or even cease operations altogether.
- Changes in economic conditions could hurt an issuer's businesses: Factors like global or national economic recessions, changes in interest rates, changes in credit markets, changes in capital market conditions, declining employment, decreases in real estate values, changes in tax policy, changes in political conditions, and wars and other crises, among other factors, hurt businesses generally and start-up companies in particular. These events are generally unpredictable.
- No Registration Under Securities Laws: The securities sold on our Platform will not be registered with the SEC or the securities regulator of any State. Hence, neither the companies nor their securities will be subject to the same degree of regulation and scrutiny as if they were registered.
- Incomplete Offering Information: Rule 506(c) does not require the issuer to provide you with all the information that would be required in some other kinds of securities offerings, such as a public offering of shares (for example, publicly-traded firms must generally provide investors with quarterly and annual financial statements that have been audited by an independent accounting firm). Although Issuers on our Platform will provide some information, as described above, it is possible that you would make a different decision if you had more information.
- Lack of Ongoing Information: Rule 506(c) does not require Issuers to provide you with any information after you invest. Most Issuers will provide some information, but much less than the information that would be required of a publicly-reporting company.
- Breaches of Security: It is possible that our systems would be "hacked," leading to the theft or disclosure of confidential information you have provided to us. Because techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are not recognized until they are launched against a target, we and our vendors may be unable to anticipate these techniques or to implement adequate preventative measures.
- Uninsured Losses: A given company might not buy enough insurance to guard against the risks of its business, whether because it doesn’t know enough about insurance, because it can’t afford adequate insurance, or some combination of the two. Also, there are some kinds of risks that are simply impossible to insure against, at least at a reasonable cost. Therefore, any company could incur an uninsured loss that could damage its business.
- The Owners Could Be Bad People or Do Bad Things: Before we allow a company on our Platform, we run certain background checks, include criminal background checks. However, there is no way to know for certain that someone is honest, and even generally honest people sometimes do dishonest things in desperate situations – for example, when their company is on the line, or they’re going through a divorce or other stressful life event. It is possible that the management of a company, or an employee, would steal from or otherwise cheat the company, and you.
- Unreliable Financial Projections: Issuers might provide financial projections reflecting what they believe are reasonable assumptions concerning their businesses. However, the nature of business is that financial projections are rarely accurate, not because issuers intend to mislead investors but because so many things can change, and business is so difficult to predict.
- Limits on Liability of Company Management: Many companies limit the liability of management, making it difficult or impossible for investors to sue managers successfully if they make mistakes or conduct themselves improperly (not all liability can be waived, however). You should assume that you will never be able to sue the management of any company, even if they make decisions you believe are stupid or incompetent.
- Changes in Laws: Changes in laws or regulations, including but not limited to zoning laws, environmental laws, tax laws, consumer protection laws, securities laws, antitrust laws, and health care laws, could adversely affect many companies.
- Conflicts of Interest with Us: In most cases, we will make money as soon as an Issuer is listed on the Platform. You, on the other hand, make money only if your investments turn out to be successful. Or to put it a different way, at least in the short term it is in our interest to list as many companies on the Platform as possible, even if they all fail and investors lose their money.
- Conflict of Interest with Companies and their Management: In many ways your interests and the interests of company management will coincide: you both want the company to be as successful as possible. However, your interests might be in conflict in other important areas, including these:
- You might want the company to distribute money, while the company might prefer to reinvest it back into the business.
- You might wish the company would be sold so you can realize a profit from your investment, while management might want to continue operating the business.
- You would like to keep the compensation of managers low, while managers want to make as much as they can.
- Lack of Professional Advice: Because of the limits imposed by law, you might invest only a few hundred or a few thousand dollars in a given company. At that level of investment, you might decide that it's not worthwhile for you to hire lawyers and other advisors to evaluate the company. Yet if you don't hire advisors, you are in many respects "flying blind" and more likely to make a poor decision.
- Our issuers may not realize traditional "exit" opportunities: Traditionally, one of the key means by which early-stage investors such as venture capital firms make money investing in start-ups is through an "exit," such as an initial public offering (IPO), a sale of the company to a larger competitor, or a subsequent financing round. Title III crowdfunding is a new paradigm and no one knows yet exactly what, if any, exit opportunities will be available to early investors.
Risks Associated with Equity Securities
- Equity Comes Last in the Capital Stack: The holders of the equity interests stand to profit most if the company does well, but stand last in line to be paid when the company dissolves. Everyone – the bank, the holders of debt securities, even ordinary trade creditors – has the right to be paid first. You might buy equity hoping the company will be the next Facebook, but face the risk that it will be the next Theranos.
- In Most Cases, You Will Be A Minority Investor: Investors will typically be "minority" owners of companies on the Platform, meaning that other parties will have complete voting and managerial control over the company. As a minority stockholder, you typically will not have the right or ability to influence the direction of the company. You will generally be a passive investor. In some cases, this may mean that your securities are treated less preferentially than those of larger security holders.
- Possible Tax Cost: Many of the companies on the Platform will be limited liability companies. In almost every case these limited liability companies will be taxed as partnerships, with the result that their taxable income will "flow through" and be reported on the tax returns of the equity owners. It is therefore possible that you would be required to report taxable income of a given company on your personal tax return, and pay tax on it, even if the company doesn’t distribute any money to you. To put it differently, your taxable income from a limited liability company is not limited to the distributions you receive.
- Your Interest Might Be Diluted: As an equity owner, your interest will be "diluted" immediately, in the sense that (1) the "book value" of the company is very likely to be lower than the price you are paying, and (2) the founder of the company, and possibly others, bought their stock at a lower price than you are buying yours. Your interest could be further "diluted" in the future if the company sells stock at a lower price than you paid.
- Future Investors Might Have Superior Rights: If the company needs more capital in the future and sells stock to raise that capital, the new investors might have rights superior to yours. For example, they might have the right to be paid before you are, to receive larger distributions, to have a greater voice in management, or otherwise.
- Dilution of Voting Rights: Even if you have any voting rights to begin with (and many of the equity securities offered on the Platform will have no voting rights), these rights will be diluted if the company issues additional equity securities.
- Our companies will not be subject to the corporate governance requirements of the national securities exchanges: Any company whose securities are listed on a national stock exchange (for example, the New York Stock Exchange) is subject to a number of rules about corporate governance that are intended to protect investors. For example, the major U.S. stock exchanges require listed companies to have an audit committee made up entirely of independent members of the board of directors (i.e., directors with no material outside relationships with the company or management), which is responsible for monitoring the company's compliance with the law. Companies listed on our Platform typically will not be required to implement these and other stockholder protections.
Risks Associated with Debt Securities
- You Have No Upside: As a creditor of the company, the most you can hope to receive is your money back plus interest. You cannot receive more than that even if the company turns into the next Facebook.
- You Do Have a Downside: Conversely, if the company loses enough value, you could lose some or all of your money.
- Subordination To Rights Of Other Lenders: Typically, when you buy a debt security on our Platform, while you will have a higher priority than holders of the equity securities in the company, you will have a lower priority than some other lenders, like banks or leasing companies. In the event of bankruptcy, they would have the right to be paid first, up to the value of the assets in which they have security interests, while you would only be paid from the excess, if any.
- Lack of Security: Sometimes when you buy a debt security on our Platform, it will be secured by property, like an interest in real estate or equity. Other times it will not.
- Issuers typically will not have third party credit ratings: Credit rating agencies, notably Moody's and Standard & Poor's, assign credit ratings to debt issuers. These ratings are intended to help investors gauge the ability of the issuer to repay the loan. Companies on our Platform generally will not be rated by either Moody's or Standard & Poor's, leaving investors with no objective measure by which to judge the company's creditworthiness.
- Interest Rate Might Not Adequately Compensate You for Risk Level: Theoretically, the interest rate paid by a company should compensate the creditor for the level of risk the creditor is assuming. That's why consumers generally pay one interest rate, large corporations pay a lower interest rate, and the Federal government (which can print money if necessary) pays the lowest rate of all. However, the chances are very high that when you lend money to a company on the Platform (buying a debt security is the same as lending money), the interest rate will not really compensate you for the level of risk.