What is Clade and how does it work?
Clade is a global investment platform for ultra-high net worth individuals, family offices, and institutions. This network makes up our Inner Circle, and they co-invest together and stay connected via our private App as well as at off-line events.
Now, we have created an online marketplace to share their proprietary investment opportunities with you. Our goal is to connect accredited investors who want to invest in institutional-quality alternative investments with attractive opportunities to do so.
On the platform, accredited investors can discover high-quality private investments offerings, review due diligence materials and build a portfolio of alternative investments. In short, we streamline the investment process and use technology to help you access previously inaccessible opportunities.
Why invest in Clade opportunities?
Large and sophisticated investors have historically “clubbed” deals only amongst themselves. We are breaking that mold. Our platform allows you to co-invest with these investors in their high-yielding private loans, venture capital deals, and bespoke funds.
How do I get started?
It’s easy and straightforward to sign up on the Clade website and begin accessing our investment opportunities. Once your account is set up, you'll be able to obtain information about the investment offerings available to accredited investors. Please note that only accredited investors may invest in our investment offerings and you will be required to confirm that you meet the criteria to qualify as an accredited investor within the meaning of the Securities Act of 1933. See “Suitability” below for more information.
What are the benefits of using Clade?
Clade makes it easy for you to invest in institutional-grade alternative investments without having to do all of the work. We provide access to attractive opportunities, perform thorough diligence on every investment offered on our platform, and utilize technology to simplify the process.
Can I speak to someone from Investor Relations?
Absolutely. Please contact us to set up a call with an Investor Relations representative at a time that’s convenient for you. Our headquarters are in the Eastern Time Zone, but we would be happy to arrange a convenient time to speak based on your schedule.
What types of investments are offered on Clade?
We focus on alternative investments that target attractive, outsized risk-adjusted returns. These strategies include credit-oriented opportunities such as direct private loans, as well as non-traditional equity investments including venture capital deals and bespoke specialized funds. In most cases, investment offerings on Clade are ‘off-the-run’, meaning that you will likely not find them offered elsewhere. These opportunities are brought to Clade by our Inner Circle, a global network of ultra-high net worth individuals, family investment offices, and institutions. With all of our offerings, we focus on investments where the underlying deal sponsor has a strong alignment of interest with other investors.
How are equity transactions structured?
Equity investors are typically purchasing a series interest of a Series Limited Liability Company (“Series LLC”) set up by Clade specifically to make the investment. Investor proceeds received by the Series LLC are used to purchase the corresponding asset, which are shares or limited partnership interests of a third party equity issuer.
As the owner and managing member of the Series LLC, Clade works with third parties to administer the Series LLC and each series, including reporting and making distributions to investors. These distributions represent cash dividends, realized profits and returns of capital from the corresponding asset, net of fees. Distributions are made pro rata to investors based on the amount of their investment and ownership of shares or limited partnership interests, as applicable, issued by the Series LLC.
How are credit transactions structured?
Investors in our credit transactions are typically purchasing Borrower Payment Dependent Notes (each a “Note”). Each Note is issued by a unique series of a Series LLC set up by Clade to acquire or fund a corresponding asset that is a debt obligation. These debt obligations are typically a direct loan to a borrower or a participation agreement with an agent or direct lender of a loan. The performance of each Note is tied to the performance of the corresponding asset, less fees, and each series of the Series LLC is independent of every other series of the Series LLC.
As the owner and managing member of the Series LLC, Clade works with third parties to administer the Series LLC and each series, including reporting and making distributions to investors. These distributions represent cash interest, realized profits and returns of capital from the corresponding asset, net of fees. Distributions are made pro rata to investors based on the amount of their investment and ownership of Notes issued by the Series LLC.
How frequently are Clade transactions available for investment?
We strongly believe in quality over quantity. As such, you can expect to see only a few investment opportunities on Clade at any one time.
How does Clade’s investment process work?
We are constantly sourcing opportunities from our global network of family investment offices, ultra-high net worth individuals, and institutions. By maximizing our deal flow, we are able to be extremely selective on what we ultimately present to you. Our investment team analyzes each potential transaction, and most opportunities do not make the cut. In aggregate, Clade and our network of deal sponsors and originators review around 1,000 opportunities a year, and then in-depth due diligence is conducted so that we can select, on average, 1-2 investment opportunities per month.
Core to this investment process, we begin by performing diligence on all of our deal sponsors and originators before we start to look at any potential investment they intend to bring to the platform. This vetting process includes a detailed review of the management team’s track record and experience, amongst other factors, in their specific sector.
How do I make an investment?
First, please set up your account on our website. To start, click the ‘Sign Up’ button and follow the activation process. It should take less than 2 minutes. After completing your set-up, you’ll be able to review and participate in our investment opportunities. To invest, login to Clade from our homepage, visit the Investment Offerings tab and then select the offering you intend to fund. On that specific offering page, you will be able to designate your intended investment amount. Then as a final step, you will receive subscriptions documents to e-sign along with wiring instructions or an ACH bank form to fund your investment.
When is an investment closed?
An investment is not closed until all legal documents are signed and funding has been contributed and cleared. Once the transaction documents are completed and funds transferred, the investment is now active.
What are the minimum and maximum investment size?
We typically call for a minimum investment size of $100,000, although some minimums may be as low as $50,000. Our investors range in size from accredited individuals all the way up to large institutions, so we strive to accommodate both large and small investors alike. Please note that the minimum investment size of each offering is subject to change during the investment window based on the number of investors committing to a specific investment.
How does the allocation & commitment process work?
Investors submit non-binding allocation requests on the platform. Clade then allocates the available investment based on aggregate interest levels and timing. In general, submitted commitments will be considered and allocated in the order they are received. Once an allocation is granted, investors receive a subscription agreement and supporting documentation via email for completion prior to funding. Funding instructions will be sent to you following the completion of the relevant documentation.
How are legal documents handled on Clade?
All legal documents can be sent and signed electronically. This allows for the efficient and seamless transfer of documents between you and Clade, while maintaining the authenticity and security of your information. Investments are finalized once proper legal documentation is accepted, funds are confirmed received, and we provide you with completed counterpart signatures.
How do I transfer money to fund a Clade investment?
You may use standard ACH transfer from your bank account for amounts up to $100,000. Amounts larger than $100,000 are made using a wire transfer. For each investment opportunity there will be specific account numbers that we will provide to you so that funds are properly received on our end.
What is Clade’s fee structure?
Joining Clade and viewing investment opportunities is free.
For those who are accredited investors and choose to invest, there are fees associated with each investment. These fees depend on the kind of investment being offered (e.g.: investing in a loan or investing in equity) and the type of the transaction. In general, Clade earns a management fee on all offerings, typically ranging from .50% to 4.0% annually. Clade may also, in certain circumstances, earn servicing fees on payments received and/ or a percentage of profit distributions to investors. Additionally, investors are responsible for annual fixed expenses related to each investment. These fixed annual fees act as a cost-reimbursement to Clade and cover a portion of each investment’s administrative set-up, accounting, legal and reporting expenses. Cost reimbursement fees vary slightly depending on the type of investment offered and legal structure used. In all cases, fees and cost reimbursements for each investment are detailed in the Private Placement Memorandum as well as in the Offering Supplement for such investment.
What kind of documentation will I receive after I invest?
Once an investment offering has fully closed, you will receive the executed investment documents from our operations team. For equity investments, we will then work with the investment sponsors to provide timely updates shared with all investors at least quarterly. For credit investments, investors will receive timely updates regarding any material changes in their investment. All investors on Clade, equity and credit alike, will receive tax documents every year that they have a distribution.
Are Clade investments right for me?
Clade offerings are made in the U.S. pursuant to Rule 506 (b) and Rule 506 (c) of Regulation D under the Securities Act of 1933, which requires verification of “accredited investor” status for each investor. The types of alternative investments on Clade are high-risk in nature, therefore under current SEC regulations we are required by law to verify that all of our investors on our platform are accredited.
To qualify as an accredited investor, you must meet certain thresholds as defined by the Securities and Exchange Commission under Rule 501 of Regulation D. Specifically, you must meet one of the following criteria:
- Earn an annual income per individual of over $200,000 per year ($300,000 per couple) with the expectation of maintaining such level of income in the future.
- Have a net worth of more than $1 million (individually or jointly), excluding the value of a primary residence.
- Be a bank, insurance company, registered investment advisor, business development company, or small business investment company.
- Be a general partner, executive officer, director or a related combination thereof for the issuer of a security being offered.
- Be a business in which all the equity owners are accredited investors.
- Be an employee benefit plan, a trust, charitable organization, partnership, or company with total assets in excess of $5 million.
We recommend that you read FINRA’s suitability guidelines as well as their article on evaluating the risks of investing in private placements before you invest in Clade.
How are my investments taxed?
Clade uses two different types of legal structures for investments. For equity investment offerings, investors acquire an ownership stake in a limited liability company (“LLC”). Investments in an LLCs produce K-1s as their tax documents. Income related to our LLCs can be both ordinary income and capital gains, depending on the type of transaction. For credit investment offerings, investors acquire a Borrower Payment Dependent Note (“BPDN”). BPDNs produce a Form 1099. Income related to BPDNs is typically taxed as ordinary income.
Please note that Clade and its affiliates do not provide tax, legal or accounting advice. It is important that you consult your own tax, legal and accounting advisors before engaging in any transaction on our platform.
What currencies do you accept?
We currently accept U.S. Dollars for our investments. In the future, we plan to accept other major currencies as well.
Can I invest as a non-US citizen?
Residents of most countries can invest with Clade. This excludes residents of Cuba, Iran, North Korea, and the Crimea Region of the Ukraine.
Regardless of your nationality, in order to be eligible to invest on Clade, all investors must meet the requirements as an accredited investor, and the funding of their investments must be made via an internationally-accepted financial institution.
If you are a non-US citizen, we strongly recommend that you consult your own local tax, legal and accounting advisors with respect to your tax implications of investing on our platform.
How frequently do I need to update my accreditation information?
In general, your accreditation is valid for a period of one year. Following the initial one year period, you will need to update and resubmit your accreditation documentation.
Are investments on Clade risky?
Yes. Investing in the types of investments offered on Clade is risky, and there are no guarantees. Before investing, investors are strongly encouraged to carefully read all of the documents related to a prospective investment. These documents contain both the terms and fee schedule related to the investment, as well as the risk factors that need to be considered when evaluating if an investment is right for you. It is also important to recognize that risks vary on a case-by-case basis. FINRA also provides a starting point to learn more about investment risk in general as well as some of the risks related to high yield investments on their website.
Can I lose money?
Yes. The type of alternative investments offered on Clade involve substantial risk and present the opportunity for significant losses including the loss of principal. As with any investment, investment offerings on Clade should be evaluated on a case-by-case basis and prospective investors are strongly encouraged to read the risk factors and all of the documents for each applicable offering.
What happens if Clade goes bankrupt?
The security of your investment is of paramount important to us, and we have set-up our structure accordingly. Investors purchase and own Notes or interests issued by a series of a Series LLC that we own and manage. Each series is a separate legal entity under Delaware law, and operates from a separate bank account that is not commingled with other vehicles or Clade affiliates. This means that if Clade ever went bankrupt, each series would remain bankruptcy-remote, and the investments in each series would not be affected.
Are Clade’s investments liquid?
No. The investments found on Clade are illiquid private transactions. They are not traded on public stock exchanges and cannot be easily sold or traded. Thus, it is important to remember that once you complete an investment, you will not be able to sell nor modify your investment.
When will I get my money back?
Different investments have different expected durations. Duration is the anticipated time investors will be involved with the investment until the underlying investment is liquidated or paid off. It is important to read the offering documents of each investment opportunity for a deeper understanding of the hold period for each investment.
Who is behind Clade?
The company was founded by Jonathan Lipton and Jan Oliver Koelble, and the Clade platform was formally launched in 2018. For more on the Clade management team, our advisors, and service providers you can visit the About section of our website.
Is Clade secure?
Clade is committed to protecting the privacy and confidentiality of your information. This includes but is not limited to physical and electronic procedures to protect information from loss, misuse, damage or modification by unauthorized access. Some of the main features of our security program are:
- Internal and external review of our public and non-public Internet sites and services;
- The use of specialized technologies such as firewalls and encryption;
- Rigorous multi-stage testing of the operability of products and features before they are exposed to the Internet as well as updates for known vulnerabilities;
- Monitoring of our systems infrastructure to detect weaknesses and potential intrusions.
- The identity information you provide as part of your subscription/investment process are stored by our service provider HelloSign. Your connection to HelloSign is secure and encrypted using SSL (Secure Sockets Layer). This is the same level of encryption used by leading banks and government agencies. Your documents are also stored and encrypted at rest using AES - 256 bit encryption. Each one is encrypted with a unique key. As an additional safeguard, each key is encrypted with a regularly rotated master key.
Is Clade GDPR compliant?
How can I join the Inner Circle?
Our Inner Circle is a selective, global group of wealthy individuals, business leaders and professionals investors. If you are interested in joining, you may learn more on our Inner Circle page.
Membership in our Inner Circle is capped both in absolute number, and by geography. This means, unfortunately, that not all qualified applicants will be admitted. It is also possible that you will be put on our waitlist. Please know that we do accept applicants from this list and that we are continuously reviewing it. The best way to move forward from our Inner Circle waitlist is to have a current Clade member or two vouch for you.
Who is on the Clade team? And where are we located?
We are a team of professionals with extensive experience in alternative investments, financial operations, technology, and regulation. You can read more about our senior leadership on our website. Our headquarters are located in the Soho neighborhood of New York City. If you would like to reach out to us, our contact information is here.