Introduction

This guidebook is designed to help CapitalTech investors develop their own due diligence process before making an investment in Revenue Sharing Agreements (RSAs), tokenized private placements, or other offerings available on the CapitalTech platform. By understanding and applying these principles, investors can make informed decisions aligned with their financial goals and values.

1. Initial Screening: Aligning with Your Investment Philosophy

– Financial Filters: Focus on businesses with steady or growing gross revenue, sustainable margins, and operational cash flow.

– Industry Fit: Does the sector align with your understanding or interest (e.g., construction, energy, infrastructure)?

– Mission and Values: Does the company’s mission match your values—whether sustainability, innovation, or community impact?

– Regulatory Compliance: Confirm that offerings are conducted under Regulation D 506(c) or similar frameworks.

2. Financial and Operational Assessment

– Revenue Models: Understand the sources of gross revenue and seasonality of income.

– Return Structures: Review the target return multiple (e.g., 1.5x or 2x) and estimated payout schedule.

– Risk Factors: Identify operational, industry-specific, and execution risks.

– Key Partners and Teams: Evaluate leadership, vendor relationships, and customer retention.

3. ESG and Impact Considerations

– Environmental: Does the company monitor carbon footprint or energy efficiency?

– Social: What’s the workplace culture, community engagement, or diversity policy?

– Governance: Is there transparency in operations and a clear decision-making hierarchy?

– Alignment with SDGs: Does the opportunity support goals such as clean energy, responsible consumption, or economic inclusion?

4. Tokenization and Liquidity Readiness

– Blockchain Protocols: Understand what blockchain or token platform is being used.

– Fractional Ownership: Does the token allow smaller entry points and diversified exposure?

– Secondary Trading: Is there potential for liquidity via secondary markets or token exchanges?

– Smart Contracts: Are investor rights and distributions enforced automatically and transparently?

5. Regulatory Review and Risk Management

– Compliance Framework: Ensure the offering is compliant with SEC regulations (e.g., Reg D 506(c))

– Due Diligence Files: Review PPMs, subscription agreements, UCC-1 filings, and disclosures.

– Security and Custody: Where and how are tokens stored? Are third-party custodians or digital wallets involved?

– Jurisdictional Issues: Consider any restrictions based on your location or investor status.

6. Investor Stewardship and Engagement

– Transparency: Are you receiving quarterly reports, financial updates, and business KPIs?

– Communication Channels: Is there an investor portal or regular AMA (Ask Me Anything) sessions?

– – Exit Visibility: Know the defined end point of the RSA (i.e., when your target return is reached).

7. Post-Investment Monitoring

– Track Distributions: Use the investor dashboard to monitor token payouts.

– Reassess Periodically: Reevaluate your holdings every 6-12 months.

– Watch for Red Flags: Delayed reports, unexplained revenue dips, or changes in management.

– Portfolio Fit: Ensure that the investment continues to complement your broader strategy.

Conclusion

CapitalTech enables access to innovative, income-producing investments—but smart investing begins with due diligence. This guidebook is your personal framework to evaluate risks, understand opportunities, and invest with confidence.

CapitalTech. Invest Differently.