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.

Portfolio News

Introducing Business Finance Market’s New Capital Raise

I am delighted to today officially launch Business Finance Market’s latest EIS-eligible opportunity.

With the full details of the opportunity available here, Business Finance Market - who will soon be trading as Finance Nation, their go-to-market brand - are raising £2m to allow them to build on the traction they have achieved to date.

Developing a data-rich fintech platform to stimulate the market for SME lending, the company is built on the understanding that it has never been as difficult for SMEs to access finance as it is today. There is an anticipated £22 billion funding gap for the 5.9m SMEs in the UK, who today receive just 4% of bank lending and who have seen a 3% decrease in lending in the last three years - compared to a 43% increase in lending to their larger counterparts.

Banks have drastically reduced their front line staff and today, 50% of lending applications are originated from 2,000 commercial finance brokers. This has meant the market has become even more intermediated, leading to slower processing times and increased SME frustration - and these issues have only been exacerbated due to Covid, and are anticipated to worsen further.

Whilst SMEs are the focus of the solution, multiple stakeholders are set to be positively impacted by the platform, including the Bank of England, as the solution underpins their objectives including its response to the Van Steenis review ‘Future of Finance’. Furthermore, the platform has an innovative revenue model that positively benefits lenders, brokers and SMEs in comparison to the current market standard. You can gain an insight into the revenue model here.

Founded by Craig Iley, who previously co-founded two digital banks in Atom Bank and Bank North, an industry experienced team has been assembled over the last 15 months and it has been a pleasure to support the team since their first overfunded seed round in 2021.

They have achieved some notable traction since inception (details are available on pages 8 and 9 of the Investment Memorandum, which is available after logging into the GCV platform), including receiving FCA authorisation as a credit broker and seeing considerable progress with their platform, working closely with industry-leader Answer Digital.

Now raising their next round of capital to build on this traction and further their growth as they take the platform to market, the feedback to date has been very positive and the coming months are an exciting time in the Business Finance Market journey.

An EIS-eligible opportunity, investors have the ability to access a variety of generous tax reliefs (dependent on individual tax circumstances), including 30% income tax relief on the value of their investment and seeing any gains realised free of capital gains tax, income tax and inheritance tax.

Already over 88% funded at the point of writing this and publicly launching the opportunity, you can explore the details of this opportunity in full here.

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.