Tiptoh 1A
Plant-based ‘milk’ made from yellow split peas
€94,500
total amount raised in round
- Eligible for a tax reduction
This campaign ended and is now negotiating with select business angels
Contact us if you are interested in a private meeting with this entrepreneur.
Type 1 – Project risk
1. Risk associated with the team's knowledge of the market and correctness of forecasts
Risk: As a start-up in a competitive plant-based beverage sector, The CUMUCO team might not have (proper) knowledge of target market and/or make incorrect forecasts as consumer preferences may changes, which would impact sales growth.
Consequence: If the team does not have sufficient knowledge of the market, it could set incorrect targets. Sales volumes may not reach expected levels, affecting revenues and delaying profitability. This could lead to a lower valuation in the event of a possible exit because the business plan could not be executed as planned. In that case, there could be lower or even non-existent returns. In the worst case, there could even be a liquidation and bankruptcy of the company, with partial or complete loss of the invested capital.
Note: CUMUCO actively monitors market trends and customer feedback to adapt its products and marketing strategies. The company is looking to establish partnerships with coffee bars and businesses aligned with sustainable, plant-based values, broadening its reach to target direct and indirect consumers. In addition, CUMUCO has begun to diversify with new products, such as Barista oat milk.
2. Risk associated with the size of the team
Risk: Given the stage of development that CUMUCO is in, it is essential to have the right team for the future development of the company. If the company relies entirely on an indispensable person, there is a risk that this person will withdraw from the company.
Consequence: If there is only one manager or key person and that person withdraws, the company is (temporarily) without management. In case of difficulties, no one would be able to represent the company to make decisions.
Note: CUMUCO benefits from the Mentor Me by NOA program - a two-year program with Arne Valaert and strategic consultant Jean-Jacques Velkeniers (ManMark).
3. Risk associated with the need for new financing
Risk: Given the stage of development that project owner is in, it is likely that there will be a need for new financing, particularly if sales do not progress as expected.
Consequence: Insufficient cash may limit CUMUCO's ability to invest in marketing, distribution or product development, affecting growth and possibly requiring additional financing rounds. On the one hand, there is the risk that the company will not find investors, which would lead to the dissolution or bankruptcy of the company, causing the investor to lose part or all of his investment. On the other hand, there is the possibility that the company will find new investors, which will lead to dilution, which will be even greater if there is a lower valuation than the one currently used.
Note: CUMUCO maintains a diversified financing strategy, targeting a combination of business angels-investments, grants and loans to stabilize its cash flow. The company carefully monitors cash burn rates and has a financial plan that includes realistic sales and financing targets. In the event of new financing rounds, investors will have the option of reinvesting at the investment conditions in force at that time.
Type 2 – Sector risk
1. Risk associated with dependence on external suppliers
Risk: CUMUCO depends on external suppliers of raw materials and contract manufacturers for its production, and has only limited direct control over manufacturing processes.
Consequence: Any disruption in the supply of raw materials or in the facilities of manufacturing partners, such as delays or quality control problems, could hamper CUMUCO's ability to meet demand and damage customer relationships. If this risk materializes, the company may set the wrong targets. This could lead to a lower valuation in the event of a possible exit because the business plan could not be executed as planned. In that case, there could be lower or even non-existent returns. In the worst case, there could even be a liquidation and bankruptcy of the company, with partial or complete loss of the invested capital.
Note: CUMUCO maintains close collaboration with its supply chain partners, implementing strict quality control standards and conducting regular audits. The company is also investigating secondary supplier options and will negotiate flexible supply agreements to ensure production consistency and reliability.
2. Risk associated with competition
Risk: The plant milk market is evolving rapidly, with many new entrants and established brands expanding their offer, leading to increased competition.
Consequence: Certain components of the technology may have to be redesigned, delaying market launch and impacting financial results. Increased competition could prevent CUMUCO from differentiating its products and maintaining its pricing power, which could have an impact on its market share and sales. If this risk materializes, the company may set itself the wrong targets. This could lead to a lower valuation in the event of a possible exit because the business plan could not be executed as planned. In that case, there could be lower or even non-existent returns. In the worst case, there could even be a liquidation and bankruptcy of the company, with partial or complete loss of the invested capital.
Note: CUMUCO differentiates itself by its unique ingredient (yellow split peas) and the versatility of its products. In addition, the company invests in a branding strategy that emphasizes sustainability, European origins and its innovative approach, which builds customer loyalty and brand recognition.
3. Risk associated with changes in applicable regulations
Risk: Changes in food safety regulations, labeling requirements or sustainability standards could require TIPTOH to adapt the formulation, packaging or marketing practices of its products.
Consequence: The company may face increased operational costs or delays in adapting to compliance, which could impact its time-to-market and financial results. If this risk materializes, the company may set incorrect targets. This could lead to a lower valuation in the event of an eventual exit, because the business plan could not be executed as planned. In this case, returns could be lower, or even non-existent. In the worst-case scenario, there could even be a liquidation and bankruptcy of the company, with a partial or total loss of invested capital.
Note: CUMUCO actively monitors regulatory developments and industry standards in the EU and in potential export markets. The company consults legal advisors to ensure compliance, and is ready to adapt packaging and labelling if necessary. In addition, CUMUCO's commitment to transparency and sustainability aligns with the values of evolving regulations.
Type 3 - Risk of insolvency and bankruptcy of the project owner
1. Risk associated with insolvency and bankruptcy of the project owner
Risk: The risk of insolvency means that the company does not have sufficient funds to meet its payment deadlines (cessation of payments).
Consequence: If the company does not find alternative financing (shocked credit), it may go bankrupt. The insolvency or bankruptcy of CUMUCO may lead to lower or non-existent returns and in the worst case to a partial or total loss of the invested capital.
2. Risk associated with the alarmbell procedure
Risk: The company is currently in the alarmbell procedure which means that, as a result of losses, the net assets have been reduced to less than half the capital.
Consequence: If the company does not take the right measures to rectify this situation, it may go bankrupt (see above for consequences).
Note: Firstly, it should be noted that it is very common for young companies to be in the alarmbell procedure. Secondly, the company has adopted several measures to rectify the situation (the current fundraising being one of them).
Type 4 - Risk of lower, delayed or no returns
1. Risk associated with the lack of guarantees
Risk: Neither the shares of CUMUCO nor the Participatory Notes of the TIP TOH 1A compartment of Spreds Finance provide guarantees of a return or repayment of the invested capital.
2. Risk associated with the lack of a fixed return
Risk: Participatory Notes do not offer a fixed return. The return of the Participatory Notes depends solely on the performance of the Underlying Asset, namely the shares of CUMUCO.
Consequence for both risks: If the project owner's predictions do not come true (within the predetermined timing), there is a risk of lower or non-existent returns and, in the worst case, partial or complete loss of the invested capital.
Note for both risks: Investors in Participatory Notes bear the same economic risk as if they were investing directly as shareholders of CUMUCO.
Type 5 - Risk of failure of the financing vehicle
Risk: Although each Spreds Finance compartment is ‘bankruptcy remote’ (meaning that no other creditor can claim a right on or against this compartment) in relation to the others and in relation to the ‘general’ liabilities of Spreds Finance itself, as a result of (i) the terms and conditions of the Notes, (ii) the articles of association of Spreds Finance and (iii) Article 4 of the Law of 18 December 2016 on crowdfunding; there is a subsidiary risk of insolvency of Spreds Finance.
Consequence: Should such insolvency occur, Noteholders may be exposed to the risk of a significant delay in the recovery of their investment.
Note: The probability of this risk occurring is extremely low given the structure and organization of Spreds Finance, in particular the compartmentalization mechanism and the "bankruptcy-remoteness" described above. Each participation taken or loan granted to a project owner is recorded in a separate compartment and is appropriately accounted for in the accounts, taking into account the fact that the accounts are kept by compartment. As a result of (i) the conditions attached to the issue of Participatory Notes, (ii) the articles of association of Spreds Finance and (iii) article 10 of the law regulating the recognition and delimitation of crowdfunding and containing various provisions relating to finance and notwithstanding articles 7 and 8 of the Mortgage Law of 16 December 1851, the assets of a particular compartment serve exclusively to guarantee the rights of investors with respect to this compartment.
Type 6 - Risk of illiquidity of the investment
1. Risk associated with the absence of an organized exchange market for Participatory Notes
Risk: Neither the project owner nor Spreds Finance organizes an exchange market for Participatory Notes. It is thus up to the investor himself to find a buyer for his Participating Notes. Given the absence of an exchange market for Participatory Notes, there is no way to adequately establish a comparative pricing methodology for Participatory Notes.
Consequence: A holder of Participatory Notes may not be able to find a buyer for the Participatory Notes it wishes to sell (at the price at which it wishes to sell).
Note: The intention is not to sell the Participatory Notes but to sell the Underlying Asset, often on the occasion of the sale of the Company itself.
2. Risk associated with the vote by the general meeting of holders of Participatory Notes to sell
Risk: Any decision by Spreds Finance to sell shares of CUMUCO is subject to the approval of the holders of Participatory Notes representing at least 75% of the outstanding Participatory Notes, unless Spreds Finance is required to sell them under a contractual or statutory provision.
Consequence: Investors thus bear the risk that the general meeting of the holders of Participatory Notes may refuse to approve the sale of the participation, in which case all investors are bound by this decision and thus must wait to obtain redemption of the Participatory Notes.
3. Risk associated with an investment in a young company
Risk: Investing in shares of young companies entails the risk that a buyer for the shares will not be found, or not at a fair price yielding a market return, or that a buyer will not be found within a reasonable period of time.
Consequence: If no buyer is found for the holding, redemption of the Participatory Notes is not possible.
Note: Spreds Finance will make every effort within its powers to obtain the best possible price.
Type 7 – Other risks
1. Risk associated with the absence of analysis by Spreds Finance
Risk: Spreds Finance has not conducted an analysis of the proposed project or of the financial situation of the Company.
Consequence: Any investor considering subscribing to Participatory Notes should make its own analysis of CUMUCO's solvency, activity, financial situation and prospects.
Note: Any decision to invest in Participatory Notes should be based on a comprehensive analysis of the project and of this sheet of essential investment information. Spreds Finance's model does not provide for the presentation of analyzed projects to investors but allows investors to invest based on the information made available to them, after making their own analyses.
2. Risk associated with the lack of (periodic) reporting
Risk: There is no obligation for periodic reporting in unlisted companies (except for the cases provided by law, such as the annual general meeting of shareholders and an alarm bell procedure). While some entrepreneurs proactively communicate good and bad news (with a certain periodicity), others do not. As a (minority) shareholder, one cannot enforce reporting (other than in cases provided by law).
Consequence: If an entrepreneur does not do (periodic) reporting, there can be long periods during which investors have no insight into the (financial) state of the company. The lack of reporting does not in itself change the (financial) state of the company but can create a sense of unease among investors. If at some point a company has to file a procedure of judicial reorganization or bankruptcy, this can be a (big) surprise for the investor.
Note: Investors in Participatory Notes bear the same risk as if they invested directly in CUMUCO and became shareholders. However, Spreds, as a crowdfunding service provider, tries to encourage each project owner to report at least 2x per year.
To the best of the project owner's knowledge, there are no other material risks associated with its activities.