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.

Weekly Briefing

Weekly Briefing: UK initiates £20bn in tax cuts, UK CFOs signal economic optimism & China's economy poised for 5.3% growth

In this week's briefing, we discuss a surge of optimism among UK finance bosses, which may hint at a potential economic revival. 

Simultaneously, we look at the UK Government’s implementation of tax cuts worth over £20 billion, meaning individuals will now pay less personal taxes than in any other G7 country.

Our discussion also extends beyond our borders, delving into China's anticipated economic growth as its property market stabilises, and more.


UK Tax Update

UK Tax Cuts Amount To Over £20 Billion

  • As the Government sticks to its economic plan, over 29 Million workers have received the largest-ever cut to national insurance.
  • Over 2 million self-employed individuals will benefit as Class 4 National Insurance Contributions (NICs) are reduced from 9% to 6%. 
  • Additionally, the abolition of Class 2 NICs simplifies the tax system and saves the average self-employed person over £650 per year.
  • This is part of a longer-term ambition to end the unfair double tax on work by abolishing employee and self-employed NICs altogether.
  • According to the Government, these tax cuts are possible thanks to inflation being brought down from 11.1% to 3.4%.
  • Prime Minister Rishi Sunak said: “Hard work is one of my core values, and the progress we have made on the economy means we can reward work with a tax cut worth £900 for the average earner”.

UK Economy

Optimism Amongst CFOs Increases For The Third Consecutive Quarter

  • According to a Deloitte survey, optimism among CFOs at the UK’s largest companies has increased for the third consecutive quarter as brighter economic prospects for the UK economy translate into heightened corporate confidence.
  • With interest rates likely to be cut soon (potentially within the next few months) thanks to falling inflation, CFOs are more confident about their business prospects than usual.
  • 64 CFOs participated in the latest quarterly survey – including finance bosses from eight FTSE 100 companies and 23 FTSE 250 firms – with a net 17% more positive about their businesses' financial prospects than they were three months ago.
  • Ian Steward, Chief Economist at Deloitte, said: “Optimism among the UK’s largest businesses is running at well above average levels, suggesting that the worst of the economic downturn is behind us, with current sentiment at levels that preceded periods of good growth in 2010, 2014 and 2021. For the first time in three years, CFOs expect margins to increase over the next 12 months.”
  • The survey also indicated that inflationary fears are receding, as finance chiefs now expect inflation to be 2.9% in a year’s time, down from the 3.5% expected last quarter.

Global Economy

Chinese Economy Set To Increase 5.3%

  • Economic growth is inevitable as China’s property sectors rebound and demand for their products increases.
  • According to the ASEAN+3 Macroeconomic Research Office, China could see GDP growth of up to 5.3% this year, in line with the official target of 5%.
  • The Singapore-based group has stated that a gradual property recovery in China amidst ongoing policy support ‘would boost real estate investment, generating spillovers for the rest of the region’. 
  • Meanwhile, economists in a Bloomberg survey see China’s GDP expanding 4.6% in 2024.
  • AMRO forecasts a 4.5% expansion in growth across the ASEAN nations plus China, Japan and South Korea this year, up from 4.3% in 2023.
  • But this outlook isn’t guaranteed, with China expanding at a slower pace than expected being a major risk.

US Inflation Rises, Slashing Hopes Of Interest Rate Cuts

  • The US’s Consumer Price Index, a key inflation gauge, rose a higher-than-expected 3.5% over the 12 months to March.
  • Inflation was up from 3.2% in February and the increase was driven by higher costs for fuel, housing, dining out and clothing.
  • In response, analysts have warned that the stall in slowing price rises will force the US Central Bank to keep interest rates higher for longer.
  • The Federal Reserve’s key interest rate is now in the range of 5.25% to 5.5%, the highest level in over two decades.
  • Shares on Wall Street also closed lower on Wednesday following the inflation announcement, as investors had been betting that interest rates could be cut soon.
  • Core inflation, which many economists consider a better indicator of future trends because it doesn’t include volatile food and energy prices, stood at 3.8% – unmoved from February.

A Final Note

The huge £20 billion in UK tax cuts, complemented by a surge in CFO confidence, signal a promising era of economic revitalisation and hint at a robust future for the nation’s economy.

These positive signs present a clear opportunity for investment into UK businesses and in turn highlight the tax-efficient Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) as particularly attractive considerations for investors keen to benefit from a rebounding private sector.

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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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.