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
Jenna Taylor
· 2 min read
· Updated on

Hive's founding business exhibit their high growth and impact potential

Please note: this investment opportunity is now closed. To be informed of future funding rounds, please make sure you are a GrowthFunders member. You can do that here.

After smashing their original target of £150,000, this exciting startup is currently in overfunding with £283,500 pledged from a combination of professional and online angels. Click here to read more about Hive in overfunding. 

Ryder3

Beginnings

Hive originally started as an employee engagement tool for use within the office of e-commerce and technology giant, Visualsoft. However, the growth potential for Hive was spotted immediately and the decision was made to incubate the idea and spin it out as a stand-alone company.

The Head of Innovation who worked on the software, John Ryder, was appointed Managing Director and is focussed on the growth, positive impact, and success of Hive. Find out more about Hive’s journey so far in this recent "Bright Spark" article from the NE Times.

We recently caught up with John to get his thoughts:

We're thrilled with the success of our equity crowdfunding campaign. Our original target was £150,000 and to nearly double that gives us the financial resource to potentially accelerate the growth of the business.

Visualsoft have incubated the company, providing early stage finance, office space, technical expertise, and strategic advice and support to help shape Hive in its very early stages. They could quite easily have bank-rolled the business right the way through, however they were keen to open up the investment opportunity to a wider audience of investors.

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It's been a great way to showcase Hive and build the brand and our network. In fact, some of the investors who've come on board have made connections which has accelerated the sales process. We're hoping that others we've pitched to will become early adopters.

I hope we're emulating our sister company, Visualsoft in our approach to a number of things but especially employee happiness through increased engagement, motivation, and productivity.

Visualsoft: the “big sister”

The multi-award-winning company was founded by Dean Benson and some friends whilst studying at university. Opening their doors in 1998, Visualsoft have experienced high growth in the flourishing e-commerce sector. Scaling up exponentially, they now employ almost 200 staff across their three UK offices in Stockton-on-Tees, Newcastle, Manchester, and London, with plans to expand further by opening offices in Edinburgh, Leeds, and Birmingham.

The company recently moved their headquarters to the purposely-named Visualsoft House in Stockton. The move has enabled Dean to create a campus environment, similar to the ones used by Google and other dot.com companies in Silicon Valley with a “quirky” setup which includes a series of workstations, break out areas, and pods to allow employees to work from wherever they choose. As well as this, the HQ houses a breakfast station and ping pong tables with plans currently being drawn up for a slide and chef’s kitchen.

VSHouse

These larger premises mean that Visualsoft can continue to increase their headcount on Teesside, which they’ve already started to do with the recruitment of eight new employees. What a way to kickstart 2016!

All of this helps to explain why Visualsoft were recently listed in a table of the world's fastest growing tech firms. With an average growth of 226% since 2011, the company was one of just 72 UK companies to appear on the Deloitte Technology Fast 500 EMEA in 2015.

Positive impact: health and well-being

Hive couldn’t have been born of a more-qualified business when it comes to understanding the importance of employee engagement, motivation, and productivity. Visualsoft are at the forefront of employee initiatives, something which can easily be seen through the introduction of their Staff Benefits Package which includes unlimited paid holidays, flexible hours, and exclusive staff discounts.

The health and well-being of their employees is paramount to Visualsoft and they know how much an unhappy workforce can negatively impact a business, as well as how much a happy one can positively impact it. Another example of Visualsoft’s focus on health and well-being is when they offered staff free massages and flu vaccines to highlight the importance of stress awareness at work.

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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.