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
Industry Insights
Jenna Taylor
· 2 min read
· Updated on

£500m investment into off-site construction to solve UK housing crisis

With large volume builders struggling to keep up with the UK housing need, a number of opportunities are opening up in the market as SME builders and alternatives move in.

Because of the skills shortage (a hangover from the 2008 economic crash), the housing sector needs a disruptive approach which will enable it to deliver more homes. One approach is off-site construction, where structures are built in a factory and then transported to their final location.

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Source: The Telegraph.

Whilst the government have been toying with this approach for a while, they have yet to mobilise in a meaningful way. According to a government-commissioned report, published in 2013, volume housebuilders, (who together account for about two-thirds of all home sales) prefer traditional construction methods because they fit better with established business models.

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However, a number of institutional investors have begun to seize the opportunity and are investing heavily in the housing sector.

Institutional Investment

In January, two of the UK's largest local authority funds - together with the British Business Bank - backed a £350 million UK direct lending fund launched by Muzinich & Co. You can read more about the story here. Now, a financial services giant has promised to boost off-site construction with a huge institutional investment.

Legal and General (L&G) has just invested £50 million into the construction of a factory in Leeds, which will aim to produce 3,000 houses or 4,500 flats per year. And that's only the beginning...

Using their newly-formed L&G Homes arm, the FTSE 100 company is set to invest a further £500 million in order to build similar factories across the UK. This is a huge game-changer for the sector and could act as a catalyst for other companies who are also considering using off-site construction methods.

The factories will produce complete homes with full internal features (including white goods) and modifiable designs. After being driven to their destination, the houses will be targeted to people on low to medium incomes.

"What we're doing is true off-site manufacturing. The process we use involves no tradesmen: zero [...] All the units are not a set pattern. You can have any design you wish. What we're looking to do is have a design where tenants and residents can come and almost design their own homes."

Robert Hall, head of business development, L&G Homes.

Positive impact

As well as the massive social impact of creating a large number of jobs in factories similar to car manufacturing plants, L&G Homes also promises environmental benefits. The houses will be built to a high standard of energy efficiency and are expected to cost just £85 a year to heat.


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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.