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.

Industry Insights

Propelling the Powerhouse: unlocking investment from within the north

It's almost sixty years since John F Kennedy, in his inaugural Presidential address, told Americans to “think not what your country can do for you, but what you can do for your country”.

Whilst over on this side of the Atlantic the Northern Powerhouse might not achieve such global recognition, as it approaches its third birthday, its message to date has adopted a similar sentiment.

The Northern Powerhouse’s mission is to help the North of England achieve its economic potential, but it cannot deliver this singlehandedly. There is simply too much for one single body to achieve.

As such, the activities that achieve this must be led by businesses in the North of England; as a region, we must set the agenda and provide a clear, realistic articulation of where the Northern Powerhouse can most effectively support our economic growth.

What's in store for the Northern Powerhouse?

As Henri Murison prepares to take up post as the Northern Powerhouse Partnership’s first Director, his inbox will doubtless be filling up before he has the chance to get his feet under the desk.

Let’s pause for a moment to reflect on what Henri will inherit.

Published earlier in 2017, Eversheds’ contribution to the Northern Powerhouse debate covers familiar, but nevertheless important, terrain: clarity of purpose, connectivity, coordinated devolution, and Brexit. The report touches on investment as a driver of economic growth, but focuses on large capital projects financed by the UK Government. It says little about scale-ups’ access to capital.

The Northern Powerhouse Investment Fund is a direct and welcome attempt to address this issue, but its remit should expand to include an ambition to unlock investment from within the north.

This is our ambition. We want to make business investing easier for – and consequently more popular with –people across the North of England. ONS data shows that 12.5% of households in the North of England held equity investments in 2015/16, compared to 18.6% of households in London and the South East.

People in the North have a lot to gain by becoming more comfortable investing in businesses. Technology helps to facilitate this by enabling people to develop a portfolio with a series of modest investments. In addition to becoming aware of specific investment opportunities, the tax relief available through the initiatives such as EIS and SEIS offers great incentives to people on all income levels.

Educating and empowering investors in the North

As an equity co-investment platform, GrowthFunders is committed to delivering compelling investment propositions.

Alongside hosting these opportunities, we are continually developing our suite of guides to investing, designed to educate and empower members on investment - investors' capital contributes to the growth of local businesses, creating jobs and opportunities for the future.

The whole process is a continuous, positive circle that can only become more successful for everyone involved.

 New Call-to-action

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.