The underlying property is managed by the project sponsor. Operating income is collected from the asset monthly, from which various expenses, costs for asset improvement and debt service payments are deducted. The remaining cash flow is allocated to equity holders, like yourself. The portion that is attributed to ABS holders is remitted to Liquid to allocate to the wallet/bank account of each investor in a timely manner. Depending on the terms of the project, income is typically disbursed monthy or quarterly
The process for Deal participation is as follows:Liquid launches marketing campaign and allows full due diligence to Liquid investors. Due diligence materials will include the Private Placement Memorandum.
In total, from deal launch to closing, the entire process takes 8-10 weeks.
Note that an investor who is participating in his/her first deal with Liquid will first need to undergo an onboarding process of the Marketplace. This consists of completing an investor profile questionnaire that will assist Liquid in serving the client, undergoing a KYC/AML (Know Your Customer/Anti-Money Laundering) check and, for US based investors, an Accredited Investor verification/Non-Accreditation acknowledgement agreement. Please see Accreditation FAQ section for more information about what an Accredited Investor is.
Finally, to guarantee your opportunity to invest in a deal, it is important to complete each deliverable as soon as possible. Check your email often and support@getliquid.io domain in your email service to avoid any communications accidentally routed to your SPAM filter. If you have any questions during the process, please contact support@getliquid.io
Liquid has experienced capital markets analysts who conduct an opinion of value of the underlying asset on a quarterly basis using a combination of internal analysis and access to proprietary third-party data sources. The market valuation of the underlying asset therefore determines the value of each ABS. This value is consistent with similar projects in the community.
As a reminder, each ABS’s entire life cycle post-issuance will represent an interest in an underlying asset. Therefore, the value of each ABS can fluctuate based on changing values of the underlying asset.
Once a new investment opportunity is advertised, we encourage you to examine the investment terms and conduct due diligence as early as possible. If you are extremely interested in a deal, we strongly advise that you submit an expression of interest during the Interest Stage and the Presale Stage as opposed to waiting for the final Security ABS Sale period. If there is strong enough interest during the pre-sale process, Liquid reserves the right to immediately close the sale process and completely bypass the Security ABS Sale stage.
Once an expression of interest is submitted, it is especially important to monitor your incoming email box for invitations and reminders to complete the transaction.
For US investors: Prepare ahead of time the documentation you plan to use to prove your Accredited Investor status and scan/save them so that you can easily upload them during the initial onboarding process and periodically thereafter when the current documentation has expired. For Non-Accredited U.S investors there are only 35 open seats in each offering available.
An individual is considered an “Accredited Investor” if s/he meets any of the following four criteria:
Yes, entities such as Corporations, Trusts, Partnerships and LLCs can also invest in Liquid Investment opportunities.
Generally, when a company/project wishes to issue securities to investors, the issuer must register them with the US Securities and Exchange Commission (SEC). However, by limiting our ABS offerings to Regulation D Accredited/Non-Accrediated US investors and Regulation S international investors, we can have our offerings exempt from full SEC registration. This helps reduce the time and cost of raising capital for asset acquisition and helps you get quicker access to investment opportunities. Under Reg D and S, Liquid does have the ability to advertise offerings publicly but can only accept up to 35 Non-Accredited US Investors and any investor outside of the US.
For US-based investors, please refer to our Accreditation FAQ for more information on what it means to be an Accredited Investor and the accreditation process.
Liquid reserves the right to apply a lockup period of 3-6 months on the secondary market trading of ABSs, however each project will be different and some may be instantly tradeable. After the lockup period (if applied), you may post your ABSs at any time for sale in Liquid’s bulletin board, creating the opportunity for a new investor to take your place and create liquidation for your exit. However, final execution is subject to demand and market conditions. Upon posting, there is no guarantee that a buyer who is willing to make an acceptance or offer you find acceptable will be immediately available. Currently, unlike the traditional stock and bond markets, there are very few firms that function as market makers for tokenized digital assets; but the market is growing.
There is no guarantee that you will be able to sell your ABS for the same or greater value than what you paid when they were issued. As with other investments like public stocks the value can also depend on macro-economic conditions, interest rate environment, policies, and many other factors beyond the control of Liquid.
The company does not allow any asset owner to list projects and raise capital through us. Asset sponsors that are interested in raising capital through Liquid undergo a rigorous due diligence process and background check, which includes an on-site evaluation of the asset. Liquid is uniquely positioned to do this work given the Liquid Founding Team and other professionals within the company collectively have many years of asset identification and appraisal experience. Liquid also works directly with each asset sponsor, structuring the acquisition terms that would be attractive for our potential investors. Only after a potential deal passes due diligence and offers an attractive investment profile will it be accepted and officially offered on Liquid’s Marketplace.
We believe our up-front due diligence process provides an enormous benefit and advantage to investors as it saves time from you having to do the same type of analysis and incur costly travel and pursuit costs.
Any questions you have can be addressed to support@getliquid.io.
