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.
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Weekly Briefing
Matthew Robineau
· 3 min read
· Updated on

Weekly Briefing: UK FTSE 100 Breaks All-Time High, Housing Market Sees Near-Record Asking Prices & Government Borrowing Exceeds Expectations

In this week’s briefing, the UK economy enters the spotlight as the FTSE 100 hits a new all-time high following a sharp drop in the value of the pound. Meanwhile, the UK property sector has witnessed near all-time high asking prices.

On the other hand, higher-than-expected government spending has reduced the likelihood of further tax cuts pre-election.

Looking globally, a UN report showcases major changes within the foreign investment landscape.

UK Economy

FTSE 100 Soars To New All-Time High As The Pound Drops In Value

  • Following the pound's drop in value against the US dollar, this Tuesday morning the UK FTSE 100 soared to 8,076, breaking its previous all-time high of 8,047.

  • A rise in the FTSE 100 is often the case when the pound drops and has been seen numerous times, as most of its earnings come from abroad.FTSE 100 ChartSource: londonstockexchange.com
  • Since GBP/USD fell to its lowest after 5 months, the FTSE has risen over 8.42%, including a near 1.8% increase since Monday morning. Some top gainers were AB Foods, JD Sports, and Ocado.

  • Although the FTSE has made some substantial gains, it still lags behind the German DAX, the United States S&P 500 and the French CAC.

  • This can be attributed in part to the UK's focus on nurturing innovative, VC-driven, early-stage companies within the tech industry, which differs from the presence of major tech corporations seen in other markets.UK Housing Market Sees Near-Record Asking Prices Despite Mortgage Rate Volatility.

  • While there may be room for improvement, the FTSE's continued growth signals optimism for the future of UK companies on the global stage.

 

UK Property

UK Housing Market Sees Near-Record Asking Prices Despite Mortgage Rate Volatility

  • Average asking prices on homes have risen to a near-record level, coming in at over £372,000 according to Rightmove.

  • This increase is mainly driven by larger properties, particularly four-bedroom detached properties, increasing by over 2.7% month-on-month.

  • A statement from Tim Bannister, Director of Property Science Innovation at Rightmove, read:
    “The top-of-the-ladder sector continues to drive pricing activity at the start of the year, with movers in this sector typically less sensitive to higher mortgage rates, and more equity-rich, contributing to their ability to move.”

  • Aligning with Tim’s statement, first-time buyer homes saw a near-flat 0.3% rise, leading to an overall 1.7% increase across all property sectors. 

  • Rightmove has also said the number of properties listed increased 12% year-on-year, with most of these listings being high-end properties.

 

UK Tax Update

Higher Than Expected Government Borrowing Dampens Prospects for Pre-Election Tax Cuts

  • Recent data from the Office of National Statistics (ONS) reveals government borrowing, in the year to March, to be £120.7bn.

  • Using data from Statista 2024, this brings net debt (as a percentage of GDP) to the highest level since 1961/62, currently sitting at 98.8%.
    Public sector net debt expressed as a percentage of GDP in the United Kingdom from 1900/01 to 2028/29      Source: statista.com
  • Since a general election must be held by January 2025, there has been talk of the government cutting taxes again before the end of the year.

  • In relation to further tax cuts, Ruth Gregory, Deputy Chief UK Economist at Capital Economics, said: "If the Chancellor was hoping March's figures would provide more scope for tax cuts at a fiscal event later this year, he would have been disappointed."

  • She also added that with interest rates no longer forecast to fall so quickly, the government's interest payments could be higher, further tightening their budget.

  • Rob Wood, Chief UK Economist at Pantheon Macroeconomics, stated that the to-be-elected government will “face a tricky choice between raising taxes to fix creaking public services or holding the line on the chancellor's recent tax cuts '. He continued: “We suspect whoever the next government is will end up pushing through at least some tax rises to balance the books.”

 

Global Economy

Report by UN Trade & Development Spotlights Major Shifts In Global Foreign Direct Investment (FDI)

  • A report from UN Trade & Development shows Global FDI undergoing significant changes due to shifts in global value chains, the impact of the COVID-19 pandemic, and escalating geopolitical tensions.

  • Despite annual GDP and trade growth averaging around 4% and 4.2% respectively since 2010, FDI growth stagnates near zero, reflecting investor caution and exposing vulnerabilities in developing economies.

  • The report found that China's role as a top receiver of FDI has changed significantly over the past two decades, “a process that accelerated after the outbreak of the COVID-19 pandemic”.

  • Geopolitical tensions have contributed to a decrease in investments between countries with differing political interests, particularly impacting the manufacturing sector amidst escalating trade tensions.

  • Investments in environmental technologies like wind and solar energy, alongside electric vehicles and batteries, have witnessed a surge, primarily benefiting developed countries and worsening economic vulnerabilities in developing nations.

 

Final Note

Reflecting on this week's briefing, the FTSE 100's noteworthy performance coupled with stability in the property market reflects the UK's ability to navigate difficult economic periods. These achievements signal opportunities for growth and innovation, positioning the UK as a competitive player in the global economy.

Furthermore, with the prospect of further tax cuts diminishing and the possibility of tax increases post-election, it reinforces the necessity for investors to consider the most tax-efficient options in this investment landscape. 

At GCV, we remain committed to providing the latest insights into the investment and wider economic landscape in order to support investors in making well-informed decisions when choosing where to allocate their capital.

If you would like to find out more about a number of tax-efficient investment strategies available to UK investors, discover our range of downloadable resources here.

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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.