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
Company News
Luca Peterson
· 1 min read
· Updated on

Growth Capital Ventures manages £57.5m fund to help businesses

Growth Capital Ventures in Newton Aycliffe has also received a £1.1m investment which has helped it create 12 new jobs

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North East fintech firm Growth Capital Ventures is set to help ambitious businesses access capital to grow from a £57.5m investment fund.

Growth Capital Ventures (GVC) recently secured a £1.1m investment from Maven Capital Partners, one of the UK’s leading private equity firms, which has helped it grow its workforce.

Now GCV is working closely with Maven to help other high growth businesses access capital to grow in a partnership which shines a light on the importance of co-investment.

Based in Newton Aycliffe, County Durham, GCV helps businesses raise between £150,000 and £5m to support growth and expansion and following the Investment from Maven, GCV is expanding, taking on 12 new staff members.

The company has a growing network of retail, professional and institutional investors that are keen to co-invest through its GrowthFunders platform and back the next generation of great UK businesses.

The firm partnered with Maven to bid for a series of Fund Mandates and Maven were appointed to manage the £57.5m Maven NPIF Equity Finance Fund, which provides equity finance to high growth businesses primarily across Lancashire, Greater Manchester, Liverpool, Cumbria and Cheshire.

It can also support ambitious SMEs based in Yorkshire and Humber and Tees Valley.

Norm Peterson, co-founder and chief executive officer at GCV said: “We’re delighted that Maven has invested into GCV and is supporting our next stage of growth.”

Craig Peterson, GCV’s co-founder and chief operating officer, said: “Maven’s investment has allowed us to recruit and strengthen the marketing, investment and tech teams. We are now working with a number of exciting high growth SMEs, preparing them for listing on GrowthFunders, our online co-investment platform.

“These are exciting times for Growth Capital Ventures and for businesses in the North of England. There is now a widespread recognition – not least on the part of government – of the enormous potential of the regions that drove the first industrial revolution.

“There are some cutting edge businesses across the North with global potential and we already have a pipeline of exciting businesses focused on high growth and wider impact including job creation.

“With Maven we can provide well prepared businesses with the capital they need to grow.

“Also GrowthFunders is an ideal platform for connecting entrepreneurial and ambitious businesses to access a wider group of investors who are keen to invest in exciting opportunities.”

 

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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.