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.

Union Jack Over Big Ben
Weekly Briefing

Weekly Briefing: Election Sparks Uncertainty In Property Market, China Pioneers New Financial System & Election Tax Policy Promises

In this week’s briefing, we discuss the impact of the upcoming general election on the UK property market, tax-related election promises from current Prime Minister Rishi Sunak and the Labour Party, and more.

UK Property

Election Sparks Uncertainty in the UK Property Market

  • The announcement of a general election by Prime Minister Rishi Sunak has led to revised short-term house price forecasts for prime central London, with Knight Frank now predicting a 1% decline in prices this year, reversing their January forecast of a 1% increase.

  • Reforms to non-dom rules and Labour’s tougher proposals have caused market hesitation, impacting investor confidence and market dynamics.

  • Inflation data has reduced the likelihood of a rate cut in June, which has affected swap rates and mortgage lenders' expectations, adding another layer of complexity to market forecasts.

  • Despite supply normalisation, rental growth forecasts for prime London have been lowered due to ongoing housing shortages – a critical issue.

  • The long-term outlook, however, remains optimistic, with cumulative growth in prime central London expected to reach 16.4% over the next five years, suggesting resilience in the market.

UK Tax Policy

Sunak Pledges Tax Cuts for Pensioners

  • Prime Minister Rishi Sunak has pledged to cut taxes for pensioners, increasing the tax-free allowance by at least 2.5%.

  • This proposal aims to provide financial relief, with pensioners expected to save around £100 in 2025 and approximately £275 annually from 2030.

  • The opposition Labour Party criticised the pledge as a desperate move, with Shadow Chancellor Rachel Reeves stating, "The Conservatives have run our economy into the ground, and now they're trying to win votes with empty promises."

  • Sunak defended the action, calling it a testament to the Conservatives' commitment to ensuring pensioners' security in retirement, emphasising their dedication to supporting the elderly population.

  • Polls indicate the Conservatives lag behind Labour by about 20 percentage points, facing potential historic election losses. This electoral landscape adds pressure on the Conservative Party to appeal to pensioners, a key voter demographic.

Labour's Tax Policy Promises

  • Shadow Chancellor Rachel Reeves promised no additional tax rises beyond current plans if Labour wins the election, aiming to reassure voters concerned about potential tax hikes.

  • Labour plans to recruit additional teachers, provide extra NHS appointments, and increase police numbers, all fully funded through specific measures. "Our plans are fully costed and fully funded," Reeves emphasised.

  • However, the Institute of Fiscal Studies warned that future tax rises or spending cuts might be necessary regardless of the election outcomes, highlighting the challenges of balancing fiscal policy with public service commitments.

  • Labour aims to fund its promises through a windfall tax on oil and gas profits and by tackling tax avoidance, focusing on ensuring that corporations and the wealthy pay their fair share.

  • Both major parties have committed to maintaining the triple-lock guarantee on pensions, ensuring that state pensions increase each year by the highest of inflation, wage growth, or 2.5%.

Global Economy

China to Pioneer New Global Financial System

  • China is poised to lead the development of a new financial and monetary system, moving away from the Bretton Woods system established post-World War II.

  • This new system will be based on a diversified set of currencies and be more inclusive of emerging market economies.

  • Concerns over the US's weaponisation of the dollar have fueled calls for a less dollar-centric system. "The world is looking for a fairer and more stable financial order," said a senior Chinese official.

  • The yuan's share in international payments is growing, with expectations of it becoming a substitute for the US dollar in the long term, signifying a shift in global economic power.

  • China and other Asian economies are considering creating an Asian bas
    ket for central banks' digital currencies, which could reduce dependency on the US dollar.

A Final Note

As we wrap up this week's briefing, it's clear that the UK economy is facing uncertainty due to the upcoming election, with implications for the property market and tax policies. 

Meanwhile, China's steps in reshaping the global financial system underscore a significant shift in world economic dynamics.

At GCV, we remain committed to providing the latest insights into the investment and wider economic landscape in order to support investors in making well-informed decisions when choosing where to allocate their capital.

If you would like to find out more about a number of tax-efficient investment strategies available to UK investors, discover our range of downloadable resources here.

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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.