Frequently Asked Questions
Getting Started with Cadence
How do I become an investor on the Cadence platform?
Cadence is currently only accepting accredited investors. In the long term, our mission is to expand opportunities to a wider investor base.
How do I know that I am an accredited investor?
There are two ways of establishing accredited investor status:
You have earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expect the same for the current year
You have a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence).
How do I prove that I qualify as an accredited investor?
There are several ways to prove you are an accredited investor.
Third party verification: You can obtain a written confirmation from any of the following:
- A registered broker-dealer
- A licensed attorney
- A certified public accountant
The written confirmation must certify that reasonable steps were taken to verify that you are an accredited investor.
Income verification: You can provide government or official records in the form of tax filings or pay stubs as proof of income. Alternatively, you may obtain a letter from your accountant or employer confirming that your annual income qualifies for accreditation.
Net worth verification: You can disclose your assets and liabilities. With such, your net worth may be calculated by providing a credit report, evidence of assets, and disclosure of liabilities.
How does Cadence handle investor identity verification?
Cadence uses an industry leading identity verification service for Know Your Customer (KYC) regulations. The service uses photo-based identity documents and artificial intelligence algorithms to confirm identities and raise flags on suspicious applicants.
I have been approved to invest, how do I fund my Cadence account?
There are many ways to fund your Cadence account. We accept ACH, wire transfer, or even physical checks. Typically, it takes 3 business days days for ACH, same day for wire transfer, and 5-7 business days for physical checks to clear. Once your funds have cleared, you will see the amount reflected in the balance of your Cadence account, and you will be ready to invest.
Investing on the Platform
Are there fees to invest on the Cadence platform?
As an investor, there are no fees to invest on the Cadence platform at this time.
What is the minimum amount of money I can invest?
At Cadence, we are able to offer competitive minimums, with some opportunities available for as low as $500.
The investment has matured, how will I receive my money?
Upon maturity, you can redeem your security tokens on the Cadence platform for cash or keep them on the platform as tokens. If you redeem the tokens for cash, the principal and yield of the investment will be transferred back into your Cadence account. A credit will be reflected in your account balance. At which point, you may elect to transfer the funds to an external account or keep the balance in your Cadence account to easily invest in the next opportunity.
Does the balance in my Cadence account earn interest?
Unfortunately, not at this time. Since we are using a non-interest bearing custodian account, we will not be able to generate interest on your behalf.
Why should I keep my matured investment in tokens on the Cadence platform?
You can maintain your matured investments in tokens on the Cadence platform instead of immediately redeeming for cash for tax planning purposes.
What happens when an investment is not successful?
Cadence has structured each investment to provide as much protection as possible for investors. Despite all of the precautions taken, there is always a risk of total loss of investment.
What happens to my investment if Cadence is under financial strain?
We set up an industry standard layer of protection through Special Purpose Vehicles (SPVs). These SPVs are bankruptcy-remote legal entities that are solely created to service every investment on our platform. If Cadence were forced to suspend its operations, a third party administrator will be automatically established to continue servicing your investment until the opportunity matures and your principal and distributions are paid.
Our Underwriting Process
What type of investments does Cadence offer?
Currently, Cadence is offering short-term debt investments with competitive risk-adjusted returns. All offerings are securities exempt from SEC-registration under Regulation D, adhering to Rule 506(b). Returns are based on the performance of underlying assets such as factored invoices, and merchant cash advances that are selectively sourced through our originator partner network.
Do investment opportunities offered by Cadence have any risk?
All investments carry risk. However, Cadence minimizes risk and maximizes returns by thoroughly vetting every opportunity via a stringent proprietary risk framework. In addition, investors either have insurance protection or first lien on the underlying assets in the event of default.
How does Cadence choose its partner originators?
Cadence employs a rigorous vetting process for selecting partner originators. Originators must have a reputable management team, proven experience in the underlying asset classes, a track record of successful investments (default rate <95%), and stringent due diligence and underwriting standards.
How Cadence works on the Blockchain
What is a smart contract?
A smart contract is a codified agreement between two parties that substitutes the need for intermediaries to record, validate, and in some cases, execute the agreement. Smart contracts create an added layer of transparency and efficiency to make transactions automated and traceable.
What is a security token?
A security token is a digitized representation of ownership in any type of asset on a distributed ledger. Some examples are equity ownership in a private company, bondholders in a debt security, or lenders in a term loan recorded on Ethereum mainnet.
How is the blockchain being used?
Cadence uses blockchain technology to unlock operational efficiencies. These efficiencies grant our investors access to attractive assets that were otherwise cost prohibitive to administer.