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.
Take 2 mins to learn more
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
Raising Capital
Jenna Taylor
· 2 min read
· Updated on

The importance of good leadership in a start up business

Not everyone is a born leader but all are born with the ability to learn the leadership skills necessary to become one.

Leading a start up business can be a very delicate balancing act. Don’t worry - nobody gets it right all the time.

It’s worth remembering that even successful business leaders often make mistakes. What do they do when this happens? They recognise the mistake, learn from it, and then move on, putting their new knowledge to work.

So, what qualities are associated with good leadership, do you have them, and how will they help you run your start up business?

1. First of all, you need a team to lead

As soon as you hire your first employee, you’ve started your leadership journey. During the early stages of your business, every single hire you make will have an impact on how the company operates, exists, and grows.

Putting the right team together is essential and choosing the people who are going to play a vital role in the success of your business requires that you have an eye for spotting the right talent.

2. A good sense of direction

Not only do you have to know where you’re heading and what you want to achieve with the business, you have to make sure everyone understands and believes in what you’re all working towards, as well.

If you all have different goals and objectives, you’re never going to reach them. It’s up to you to make sure that you’re all on the same page.

Join GrowthFunders and become a member

3. Be a good mentor

Although the people within your start up business will have been hired for a specific role, limited budget and resources at this early stage, will often mean that they’ll be called on to carry out other roles within the team. Therefore, it is up to you to guide your team as they hone the skills they already have and develop new ones. 

Giving constructive criticism and useful feedback is an imperative part of good leadership. Guide your team members towards perfection. Sometimes all they need is a second pair of eyes and your input on whether they’ve taken the right angle with their work.

Encouraging and praising your staff also falls under the mentorship banner. If someone produces a great piece of work, let them know about it! Alternatively, if you can feel the mood dipping for some reason, lift it by encouraging everyone to push towards their next achievement, both individually and as a group.

In order to be able to engage with your team in each of the ways listed above, it is necessary that you are able to communicate clearly and effectively with them.

4. Communicate clearly

If your team doesn’t understand what it is you want, there’s a pretty fair chance that they won’t be able to deliver, and that won’t be their fault.

Whether it’s content creators who require a written brief or a sales team who need to understand their targets, it’s up to you to ensure that you are communicating clearly and effectively and making sure that everyone knows exactly what both you and the business requires from them.

Perhaps most importantly of all, you need to:

5. Believe in yourself

Be confident in the decisions you make. Showing a lack of confidence (no matter how subtly), will cause your team to doubt that you know what you’re doing and subsequently they'll lose faith in your abilities to lead them.

You manage the business, so walk the walk and make sure it is operated in the best way possible in order to allow and encourage high growth.

Remember...

If you don't have a great team, there's nothing for you to be the lead - nowhere for you to exercise your amazing leadership skills - so take your time and make the right decisions.

Now you know how important the team is to your start up business and future success, the next step towards creating your high growth business will most likely involve raising capital. A changing market brings with it new opportunities and alternative finance solutions. What's the right approach for your business?

 Start to raise investment for your company today

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.