Calculate your Crowd Safe’s ROI
Understand the important terms and see how your return on investment is determined.
Adjust the values of the example below:
You invested $
When you invest on Republic, you typically get a Crowd Safe. The Crowd Safe is a convertible note that has been adapted to investment crowdfunding.
You received a $1,000 Crowd Safe.
The company is sold for
Great! The amount of cash or stock you will get depends on the terms of the Crowd Safe; namely the discount and the valuation cap. If both options are present, the one with the best return is used.
Which terms does your Crowd Safe include?
No discount means that in the case of a liquidity event, you'll receive shares at face value.
A 20% discount means that in the case of a liquidity event, you will use your $1,000 to buy shares 20% cheaper than face value, thus making a 25.0% profit.
Your return
Valuation cap
No valuation cap or a valuation cap above the exit valuation means that in the case of a liquidity event you will be buying shares at market valuation.
The $2,000,000 valuation cap means that at the liquidity event, you will use your $1,000 to buy shares as if the company is worth at most $2,000,000 (instead of actual market valuation of $40,000,000 ), thus paying 20.0 times less.
Your return
The valuation cap option yields a better result, The discount option yields a better result, Both options yield the same result, so your Crowd Safe converts to $20,000
