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.
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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.
Insights
Admin
· 3 min read
· Updated on

Over £4bn invested into Tech Start-Ups so far in 2020

A recent Government report with figures compiled from Dealroom and Technation has shown that investors are continuing to back some of the UK’s high growth tech companies, despite the challenges posed by COVID-19.

According to the research for the Digital Economy Council, over £4.2bn has been invested into young UK-based Tech companies since Jan 2020. Of the new capital being ploughed into the sector, Fintech accounted for 39% of 2020 fundraising, followed by enterprise software companies raising a fifth of money invested in the first five months of the year.

The findings also reported that the UK raised more than the rest of Europe combined, with London-based tech start-ups raising more than Paris, Berlin and Tel Aviv put together.

Commenting on the figures, digital secretary Oliver Dowden said the tech sector had:

“shown resilience in these challenging times and the levels of investment in the year to date have consolidated our Europe-leading position.”

“Government will continue to champion and support the sector as it navigates the months to come as we step up our coronavirus recovery plans.”

 

The UK Tech Sector Strengthening

2019 was a busy year for GCV portfolio companies including Intelligence Fusion and HIVE. HR, which saw considerable combined investment. 

The GCV investor network is made up of experienced, private investors and institutional investors, who are increasingly looking to access and co-invest in growth focused investment opportunities in the tech sector.

In recent years the UK has evidenced it’s strong position from both domestic and foreign investment. In the year to date, the US and Asia invested more into UK based companies than any other European country, accounting for 36% of all UK investment. Foreign investment shows a sign of strength, with the UK investment landscape diversified for resilience. 

The UK also has a strong foundation of domestic investment, matching the amount from the US and Asia, UK investors also make up 36% of all investment into the country.

tech investment

 

Since the pandemic broke out, more small, equity backed, tech businesses across the UK are proving to be vital in the economic recovery post COVID-19.

Black swan events such as pandemics evidence the need for the next wave of innovation with a heavy reliance on technology for survival, education and community.

Businesses are waking up to the fact they need to be digitally sufficient in order to grow into significantly more resilient, adaptable, and resourceful entities.

Whilst people in tech are excited about expanded opportunities and the ability to solve the challenges facing all of humanity, many of these businesses need further support and investment to withstand the impact of the Covid-19 crisis.

To ensure that they can survive and successfully continue to build and commercialise their innovations, more domestic and international investment is still required.

 

Driving force for employment

UK tech now employs more than 2.93 million people across the country with salaries that are, on average, £10k higher than other sectors.  Even so, more than 90,000 tech sector jobs were being advertised at the end of April. This is twice the number of openings in accounting and finance, the next sector with the most vacancies.

Although London is still a key driver of digital tech jobs and growth – accounting for 53% of advertised roles in 2019 and offering the highest average salaries – tech hubs in Manchester, Newcastle and Leeds are continuing to thrive as evidenced in London’s Tech Week 2020 update. 

investment tech

Between 2008-2011 in the wake of the financial crisis, a generation of world-leading UK scaleups were born, creating innovative, high growth businesses and thousands of jobs nationally. One of these tech start-ups includes GCV portfolio company and guest self service platform QikServe.

Recovery from the recession including the changing consumer preferences and behaviours forced QikServe's customers to rethink not just their digital strategies but also their operations. 

Just as QikServe saw an opportunity to provide an innovative solution to the hospitality industry, we will undoubtedly be seeing a new wave of tech start-ups that will help the UK bounce back from COVID-19.

However, whilst the foundations of the tech sector may be strong, this generation of entrepreneurs risk being chipped away if the right backing from investors is not secured.

 

Tech Sector Investment Opportunities in 2020

In 2020 GCV are delighted to be bringing it’s investor network, some high  impact driven investments including Legal Tech Start-up “Transparently” and visitor experience platform “Fame Media Tech“.

Focusing on originating and structuring high growth investment opportunities, many of GCV’s 2020 investment opportunities offer attractive tax reliefs including the Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS).
Driving Growth.
Creating Value.
Delivering Impact.

Backed by

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.