What are KYC and Suitability?

Know Your Client (KYC) is a requirement to know and keep records of each of Equivesto’s customers, as well as identify each person who has authority to act on your behalf. Suitability, on the other hand, means that Equivesto must have reasonable grounds when recommending that an investment is suitable for a customer based on the client’s financial situation and needs.

What is Product Due Diligence?

Product due diligence, also known as Know Your Product (KYP), is a requirement for Dealers (like Equivesto) to conduct due diligence on all securities they make available to investor clients. Equivesto must assess all the relevant aspects of the securities made available to clients including their structure, features, risks, initial and ongoing costs, and impact of those costs. We must also approve all securities made available to clients, and monitor all approved securities for significant changes while listed on the portal.

By conducting product due diligence, Equivesto can identify securities that should be made available to only certain classes of clients, or in certain cases, not be made available to any client.

Issuer Due Diligence Checklist

Here are some of the key areas that Equivesto reviews as part of our Due Diligence process:

1. Verification of Company Incorporation

2. Background checks and ID verification on Founders & Directors

3. Review of legal documents and structuring to ensure investor readiness (articles of incorporation, shareholders agreement, etc.)

4. Verification of technology or MVP existence

5. Ensure company ownership of IP

6. Review of management documents including Financial projections, pitch deck, business plan

7. Review of legality of business and licenses/certifications necessary for business operations

8. Verification of statements made by company in Pitch Deck (Including traction/revenue)

Additional requirements will be requested as needed. See our extended Due Diligence Checklist on our free Templates page.

How long does the process take from start to finish?

Completing due diligence typically takes 5 to 10 business days (depending on the amount of documentation you have readily available), structuring the campaign takes 2 weeks to a month, crowdfunding campaigns can run up to 90 days, and you receive your money and related documents from your successful campaign within 15 days of closing. During closing we will assist you and your legal team with the required regulatory filings.

As an issuer, why do I have to provide detailed information on my executives and directors?

Equivesto has an obligation to the investors on our site, and the regulators, to verify that the senior people on your team are who they say they are, including that there are no outstanding legal, regulatory, and financial situations, or sanctions that would impact how your company is viewed or operates. Review what information we require here.

Can anyone waive their KYC and suitability requirements?

Only permitted clients can waive their KYC and suitability requirements in writing. Issuers cannot waive these requirements.