Investment Risk Warning

Important: Investing in early-stage companies involves significant risks, including illiquidity, lack of dividends, loss of investment, and dilution. This should only be done as part of a diversified portfolio.

You should only invest if you are sufficiently sophisticated to understand these risks and make your own investment decisions. Please read this full risk warning carefully before proceeding.

What are the key risks?

1You could lose all the money you invest

Most investments are shares in start-up businesses. Investors in these shares often lose 100% of the money they invested, as most start-up businesses fail.

• Most start-up businesses fail within five years of launching
• Comprehensive checks on the businesses you are investing in, such as how well they are expected to perform, may not have been carried out
• You should conduct your own research and due diligence before investing

2You won't get your money back quickly

Even if the business you invest in is successful, it will likely take several years to get your money back.

• The most likely way to get your money back is if the business is bought by another business or lists its shares on an exchange such as the London Stock Exchange. These events are not common.
• Start-up businesses very rarely pay you back through dividends. You should not expect to get your money back this way.
• There is no guarantee you will find a buyer if you wish to sell your shares early

3Don't put all your eggs in one basket

Putting all your money into a single business or type of investment is risky. Spreading your money across different investments makes you less dependent on any one to do well.

4The value of your investment can be reduced

If your investment is shares, the percentage of the business that you own will decrease if the business issues more shares. This could mean that the value of your investment reduces, depending on how much the business grows.

• Most start-up businesses issue multiple rounds of shares
• These new shares could have additional rights that your shares don't have, such as the right to receive a fixed dividend
• This could further reduce your chances of getting a return on your investment

5You are unlikely to be protected if something goes wrong

Protection from the Financial Services Compensation Scheme (FSCS), in relation to claims against failed regulated firms, does not cover poor investment performance.

• Try the FSCS investment protection checker
• Protection from the Financial Ombudsman Service (FOS) does not cover poor investment performance
• If you have a complaint against an FCA-regulated platform, FOS may be able to consider it. Learn more about FOS protection

SEIS Tax Relief

While SEIS (Seed Enterprise Investment Scheme) offers significant tax reliefs including 50% income tax relief on investments up to £200,000 per tax year, these tax benefits should not be the primary reason for investing.

• Tax relief does not eliminate investment risk
• You could still lose money even after accounting for tax benefits
• Tax rules may change in the future
• You must hold shares for at least 3 years to retain SEIS reliefs
• You should seek independent tax advice as we do not provide tax advice

Further Information

If you are interested in learning more about how to protect yourself when investing:

• Visit the FCA's consumer website
• Learn more about high-risk investments
• Read about investment-based crowdfunding