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
Harvey Hall
· 4 min read
· Updated on

UK Tech Jobs spike since peak lockdown

Recent data from specialist recruitment agency Otta, has revealed an incredible 3,495 tech roles were advertised in September throughout the UK, as figures draw closer to the pre-lockdown high of 3,552 in March. 

The rapid bounce-back in job availability comes as a 71% increase has been recorded since June, a recovery yet to be matched by any other part of the private sector.

Supported by a 40% increase in digital jobs in the UK over the past two years, the figures have cemented tech’s key role in driving post-pandemic employment, even gaining the sector special priority in The Chancellor’s ‘Kickstart’ employment scheme.

What’s driving this growth?

The pandemic has been undoubtedly significant in driving this demand for tech roles, partly due to the rapid acceleration of tech investment by SMEs following a sector-wide shift towards remote working.

A recent industry report surveying 937 professionals worldwide, revealed that 31% of organisations planned to provide further IT training for personnel following an increase in remote working, compared with a pre-pandemic figure of just 19%.

As the level of remote and hybrid working within firms in the private sector is predicted to continue increasing through till 2021 and beyond, a higher proportion of tech-oriented roles will be crucial to fulfil this digital demand.

According to research by global HR agency Robert Half, tech skills now top the list of business priorities going into 2021, with software development, cloud migration and project management experience being the most sought after traits by hiring managers for the coming year. 

But remote working hasn’t been the only implication of the pandemic that’s driven this growing desire for tech roles.

The increasingly widespread digitisation of services and systems, everywhere from conducting work meetings via zoom to ordering food digitally at a restaurant, has forced businesses and personnel in almost every industry to grow, adapt and compete technologically now more than ever.

Of the 149 million new jobs forecasted by Microsoft to be created by 2025 as a result of the pandemic, software development jobs are predicted to account for 65%, cloud and data 15%, and data analysis and machine learning at 13%, as those in tech jobs capitalise on the advancement of post-pandemic digitalisation.

Digital jobs post-pandemic

New digital jobs in a post-pandemic world, Gzero 2020.

UK tech investment continues to grow

Contributing £149bn to the UK economy and accounting for to 7.7% GVA in the same year, digital tech grew 6 times faster than any other industry in the UK in 2018, largely attributed to a rapid increase in investment the sector has experienced.

£10.1bn was invested into UK tech companies in 2019, signalling yet another record breaking year for venture capital contributions. 

A £3.1bn increase from the previous year’s figures, in 2019 the UK received a higher level of investment into tech firms than Germany and France combined.

These consistently high investment figures have placed the UK as one of the most heavily tech-invested nations on the planet. 

The 2020 Tech Nation Report shows the United Kingdom currently experiences the third highest level of investment in tech companies globally, with only the US and China boasting higher volume of venture capital invested.

Perhaps more encouragingly, with the 71% increase in series C investment and 51% rise in Growth Equity (Private Equity) noted over the past year, the UK tech ecosystem appears to be perfectly primed for the scaling and growth of new tech startups.  

And whilst other areas of the private sector have appeared to be struggling throughout the pandemic, investment has continued to flow into the tech sector over recent months, as the total level of investment into UK tech startups increased by an significant  34% between March 23rd and April 27th.

Predicted growth in tech investment

Not only have the implications of the COVID-19 pandemic appeared to have positively impacted UK tech investment, but it is expected that investment will continue to grow as a result of the pandemic.

Extrapolating data from it’s previous years’ figures, The Tech Nation report predicts tech investment will continue to rapidly increase in future years, almost doubling in value within the next two years to £36.2bn.

Forecast tech investment

Forecast tech investment 2020-2022, The 2020 Tech Nation Report.

Tech startups key to economic recovery

672,890 new startups were recorded in the 2018/19 tax year, at an average of 1,834 founded per day. 

Tech startups in particular have been highlighted as growing throughout the past year, with research for the Digital Economy Council revealing over £4.2bn has been invested into young UK-based Tech companies between January and June 2020.

These small, equity backed, tech businesses set up across the UK are already proving to be vital in the nation’s economic bounceback,  kick-started by the Chancellor’s ‘Plan for Jobs’ in July. 

Since the pandemic, the innovation of new ideas, systems and services tech startups bring are forcing the next wave of technology in the midst of one of the most influential black swan events of a generation. 

Though early stage companies are already spearheading the push for a post-pandemic economic recovery, more must be done to support the future business landscape.

Norm Peterson, CEO of Growth Capital Ventures, commented:

After the furlough scheme ends, additional government support will be needed to preserve jobs but there must also be a focus on creating new job opportunities in key industries such as the technology sector.

As consumers and businesses rely more on technology as a result of COVID-19, we need to enable the creation and scaling of the UK’s next wave of innovative start-ups and fast-growth SMEs. Building these sustainable businesses and supporting entrepreneurs and innovators is going to be critical to the UK economic recovery.

These changing times and schemes such as Coronavirus Business Interruption Loan Scheme (CBILS) have shown just how much businesses have benefited from access to capital when they need it most. The government must therefore consider additional measures that support businesses in tax-efficient ways.

Norm added:

Tax-efficient structures such as the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) can help businesses to reduce their tax liabilities and leverage growth. The government may also consider more generous tax relief on venture capital schemes that can act as a catalyst for business growth.

At Growth Capital Ventures we’ve spent several years bringing together a network of experienced private investors and institutional investors to co-invest in high growth investment opportunities that utilise these tax-efficient structures so businesses can take advantage of generous tax reliefs.

It’s important that alternative finance streams are opened up to SMEs so they can propel a sustained economic recovery; if this happens, there will be less need for the government to.

Investing in growing tech

Earlier in September Growth Capital Ventures launched a £1 million funding round on it’s co-investment platform. The live investment opportunity will drive growth and deliver impact, placing growing British tech firms at the forefront of its mission, at a time where investing in tech has never been so crucial, or lucrative.

The investment round has already gained momentum with over £1.2 million of investment secured from institutional and individual investors via Growth Capital Ventures private investor network G-Ventures.

The capital raised will enable Growth Capital Ventures to support 30 high-growth start-ups and create hundreds of new tech jobs within the North East through its venture builder unit, G-Labs.

Alongside contributing to innovative scale-ups, job creation and expanding the UK tech sector, capital invested into the raise is EIS eligible, meaning investors can benefit from valuable tax incentives  on an investment that targets 12.9x money-on-money returns.

 
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.