Don't invest unless you're prepared to lose all the money you invest. This is a high-risk investment and you are unlikely to be protected if something goes wrong.
Risk Summary

Estimated reading time: 2 min

Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be high risk.

What are the key risks?

  • You could lose all the money you invest
  • Most investments are shares in start-up businesses or bonds issued by them. Investors in these shares or bonds often lose 100% of the money they invested, as most start-up businesses fail.
  • Checks on the businesses you are investing in, such as how well they are expected to perform, may not have been carried out by the platform you are investing through. You should do your own research before investing.

You 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.
  • Some platforms may give you the opportunity to sell your investment early through a 'secondary market' or 'bulletin board', but there is no guarantee you will find a buyer at the price you are willing to sell.

Don't put all your eggs in one basket

  • Putting all your money into a single business or type of investment for example, is risky. Spreading your money across different investments makes you less dependent on any one to do well. A good rule of thumb is not to invest more than 10% of your money in high-risk investments. Learn more here.

The 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, which could further reduce your chances of getting a return on your investment.

You 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 here.

If you are interested in learning more about how to protect yourself, visit the FCA's website here.

For further information about investment-based crowdfunding, visit the crowdfunding section of the FCA's website here.

Raising Capital

5 ways to get better at pitching for investment

For some it comes naturally, but others really need to work on building their presentation skills. Especially when it comes to raising funds for a start up, early stage, or more established business.

If you're looking to unlock the high growth potential you know your business has, you will need to raise capital at some point, and this will most likely include pitching to potential investors.

The thing is, confidence is something that you can learn and once you've picked up some basic presenting tips, you'll have the tools you need to approach potential investors and raise the growth capital your business needs. 

To help you get started, we've put together 5 things you can do to make sure you get better at pitching for investment. 

1. Tell the story

All you need to do at this stage is tell the story of your business and who knows what that is better than you? How it came about, what's happened so far, and where it's heading in the future.

If you feel confident in the information you have to deliver, then you'll find that you have to think less about what you're going to say and focus on being natural.

2. Ask for advice

Present to people who aren't directly involved with the business and encourage them to ask questions. Someone on the outside may raise points and detect issues you hadn't even thought of.

Also, if you know anyone who's pitched to investors, it is worth asking them what their experience was like. Learn from their mistakes and build on their successes.

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3. Watch other people

Attending live pitching events and competitions is a fantastic way to see how other people present. You'll see a number of varying levels and styles of presentations.

Take note of which attracted investment (or won) and which didn't. Then, decide for yourself how much of the decision was made based on the business (including idea, product, or service), or the pitch presentation itself.

Listen to the feedback the investors or judges give and take it into consideration so you don't make the same mistakes.

It's important to remember that not all investors are looking for exactly the same thing when it comes to making an investment decision, but there are fundamental elements of presenting that will make your pitch stand out for all the right reasons.

4. Watch the experts

Some people deliver presentations on a regular basis and are so comfortable doing so that they're able to be conversational and capitvating. (At least on the outside, and that's the part that potential investors see anyway).

They don't read from a script, nor do they recite from memory, they just tell a great story. If you're able to cover nerves, mistakes, and all the basis, you'll have an A-star presenting style - the rest is down to your content.

The TED Talks series is a great place to see some expert presenters (as well as some really interesting presentations). Click here to watch one of my favourites on the topic of presenting to investors by serial entrepreneur and so-called 'super angel' investor, David S. Rose.

5. Practice

It sounds like the obvious thing to do, but so many entrepreneurs seem to forget to do it! There are lots of different ways and places for you to practice too: on your own, in front of family, friends, and colleagues, or at live pitching events and competitions.

Now, there are pros and cons to each. For example, practicing on your own too much means that you don't get an authentic experience of presenting. On the other hand, you can make mistakes without being embarrassed. Family, friends, and colleagues may be biased and therefore not completely honest with their feedback.

However, you will be building your skills in a friendly and familiar environment. The third way is one of the worst AND best ways to practice - if you pitch before you're fully prepared and receive negative criticism or things go wrong, it could really knock your confidence. On the other hand, you're in the environment.

It's no coincidence that the phrase "practice makes perfect" exists.

Start to raise investment for your company today

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Growth Capital Ventures (GCV) is backed by funds managed by Maven Capital Partners, one of the UK’s leading private equity and alternative asset managers.