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
Investment Campaigns
Lauren Miller
· 2 min read
· Updated on

Intelligence and data - to share or not to share?

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The topic of intelligence, data and the sharing of each has been a key topic recently, with the leak of information between the UK and US being at the forefront of these reports. This article by the LATimes.com highlights that “...most agencies don’t want to share intelligence that isn’t rock solid — even though widening the circle of trust could help fill in the gaps. All too often, there’s a bias towards hoarding that’s both cultural and legal: There’s no penalty for not sharing, but there are stiff penalties for sharing what you shouldn’t have.”

We currently have Intelligence Fusion open for investment on the GrowthFunders platform, and CEO Michael McCabe wrote a brilliant piece on this topic for Pan European Networks (read the article in full here).

Michael starts by looking at the benefits of the Intelligence Fusion model of crowdfunded information reported in real time...

“... crowdsourcing is the next stage in intelligence gathering. Europe is currently facing substantial challenges, not only in terms of security but also political and economic uncertainty. The Middle East and North Africa are also significantly unstable, leading to rising numbers of migrants making the journey to Europe ….In addition, European police and security services are significantly overstretched as they attempt to monitor threats from numerous sources.”

 

Michael then goes on to talk about the challenges that are faced by governments around the world today, in particular in Europe:

“With every new terror attack, questions are raised over how the European Union nations share intelligence in order to effectively mitigate the threat. Following the Paris attacks in November 2015, French authorities stated that they had not been informed that the mastermind of the most significant assault on France since World War II had entered their country. This has led to a push for improved methods of communicating intelligence within the EU; however, with fears over privacy concerns and source protection, that is easier said than done.”

 

Finally Michael finishes by explaining how intelligence Fusion is helping states to tackle these increasing pressures by delegating the low level “open” intelligence to private crowdsourced companies:

“Our unique blend of expert analysis, extensive network and level of geographical coverage allows us to be ideally placed at a crucial juncture in the security environment, to help clients in addressing future challenges across Europe and the globe. We are already establishing the open source intelligence picture, as well as providing analysis and assessment. As we grow, we can surge teams for short projects such as monitoring the violence at Euro 2016. Using the private sector for low level intelligence frees up state assets to focus on high level, granular intelligence and interdicting terrorist organisations”

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Intelligence Fusion is currently open for investment on GrowthFunders and have raised £139,000 to date.

 
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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.