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

The Business Finance Market executive team on the necessity of their platform

As Finance Nation (the go to market brand for Business Finance Market) tracks further progress in their live EIS eligible round, here key members of the executive team - all co-founders - offer their own perspective on the importance of what they are creating and why.

What is Business Finance Market?

Jude Browne (Chief Marketing Officer): We are building a data rich, user friendly service that will enable small and medium sized businesses to gain access to the most suitable and financially viable loans in a secure and timely manner. The intelligent and sensitive service provided will naturally sync lenders, brokers and businesses in real-time, bypassing legacy systems and practices and using AI and Machine Learning will continually evolve and improve the product offering with the Finance Nation platform acting as the 'Master Hub' from enquiry to fulfilment.

Ken Herd (Chief Compliance Officer): Our platform is the solution that brings SME finance into the 21st Century digital world that they currently cannot access, but which we as consumers take for granted. Access to finance should be as quick for SMEs as it is for us as retail consumers, but it currently takes far too long. Finance Nation offers a mechanism to deliver compliant, detailed, accurate and focused client needs to the best-in-class lenders, which in many cases could potentially nosedive at any key point on the client journey. We will speed up the process, but in a compliant manner so it’s a much better proposition for businesses.

Why do you like it?

Steven Brown (Chief Distribution Officer): Because of its genuine simplicity and desire to provide a much-needed boost to an over-complicated and populated market that does not serve the needs of a highly pressurised and critically-important business community within our very own UK PLC.

Ken: Having worked in the financial services industry for more years than anyone else in the team, I have long thought that the broking industry needs a shakeup. We have the team skills to do that.

Why is the platform different?

Stephen Pratt (Chief Product and Technology Officer): It blends and assimilates data from more sources than has previously been possible and enables the user to quickly identify the most suitable lenders, giving SMEs greater certainty of acceptance from a wider pool of lenders than ever before.

Alison Alden (Chief Financial Officer): There's a certain oxymoron to the premise that you can offer loans, make profit and everyone's happy, but in this case it's true! Finance Nation can be the industry digital compass for commercially viable and sustainable loan enablement.

Why does that matter?

Stephen P: At a time when UK SMEs have never been more important, unlocking their potential to do business through the provision of financial support will have a ripple effect that will benefit all areas of the UK economy.

Steven B: SMEs are critical to our economy and our society in more ways than we realise. As well as being wealth creators and drivers of UK PLC, they are also major educators, innovators, job creators, social support network creators. They are the social glue that hold many of our smaller communities together.

Discover the full details of the company's live EIS-eligible investment opportunity 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.