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

Weekly Briefing: UK Inflation Drop Increases Rate Cut Talk, New UK VC Investment Data & Why Now Might Be The Best Time To Buy Property

In this week's briefing, we dive into the latest developments that are shaping the UK's economic landscape –  from a promising drop in inflation rates to the evolving venture capital market. 

Additionally, we’ll discuss the resurgence of optimism in the UK property market which has driven increased buyer activity, as well as insights from further afield with highlights from April’s World Economic Outlook

UK Economy

New UK Inflation Data

  • UK consumer price inflation fell to 3.2% in March – its lowest rate since September 2021 – inching closer to the Bank of England's (BoE) target of 2%.
  • The slowdown in inflation was attributed partly to a decrease in food prices, with growth in this category slowing to 4.0% from 5.0% in February.
  • March saw a 0.6% increase in consumer prices compared to February, rising at a similar pace to that of the previous month.
  • The annual core rate of inflation, excluding energy, food, alcohol, and tobacco, eased to 4.2% in March from 4.5% in February.
  • Expert analysis suggests that despite the decline in headline inflation, concerns remain about persistent inflationary pressures, particularly in wages and services, which may influence the pace and magnitude of future rate cuts by the BoE.
  • The possibility of rate cuts faces considerations such as global economic conditions, potential impact on currency value, and the balancing act between stimulating growth, controlling inflation and avoiding a wage increase spiral.

 

UK Venture Capital 

Insights on the current state of UK VC 

  • UK start-ups raised over $3.9 billion in Q1 2024, with the fintech sector leading the way.
  • Notably, the entirely online bank Monzo led fintech investments, confirming the clear prominence of digital platforms in today's market.
  • New data from HSBC Innovation Banking reveals that the UK has retained its place as 3rd for start-up investments globally, behind only the US and China and surpassing India.
  • More than half of the venture capital investment into UK companies came from overseas, indicating the continued attractiveness of UK start-ups to international investors.
  • Despite the overall decrease in investment, this trend aligns with pre-pandemic patterns, making it clear that UK VC is still heading in the right direction.

 

UK Property

Why Optimism Has Returned Into The UK Property Sector

  • Optimism returns to the UK property market, fueled by cheaper mortgage rates and a more stable economy.
  • Buyers are favoured in the current market, with increased activity and sales, and prices rebounding faster than anticipated since the start of 2024.
  • New data from Nationwide shows a reversal in house price declines, with prices increasing by 1.4% in the first quarter of 2024, signalling a potential upswing.

                 Source: nationwidehousepriceindex

  • Analysts project stability and marginal growth in house prices by the end of the year, with some forecasting a 5% rise for the UK property market.
  • Research conducted by the real estate agency Hamptons suggests that London's property market, which has seen subdued growth since 2016, is poised for a revival, with homes increasingly selling above their asking prices.

 

Global Economy

Global Insights From The International Monetary Fund's (IMF) Latest World Economic Outlook

  • Insights from the IMF’s April 2024 World Economic Outlook have revealed resilient global economic growth alongside a notable slowdown in inflation.
  • The report – which presents IMF staff economists’ analyses of global economic developments – projects 3.2% growth for the current and next year, with median headline inflation declining from 2.8% to 2.4% by the end of 2025.
  • According to the report, the US economy is exhibiting robust performance, characterised by strong productivity and employment growth, prompting cautious monetary easing by the Federal Reserve.
  • Growth throughout the Eurozone is also set to rebound, but from already low levels as tight monetary policies weigh heavily on activity.
  • Many large emerging market economies are said to be performing well, benefiting from rising tensions between China and the US. As a result, these nations are rapidly increasing their influence on the global economy.
  • One area of discussion for the IMF has been the rapid introduction of AI whereby their hope of AI boosting productivity has been met with the possibility of a negative labour market disruption.
  • In the report, the IMF states,” Realising the potential of AI without the negative impacts will require nations to improve digital infrastructure, invest in human capital and form global rules on usage”.

 

Final Note

This week's briefing offers valuable insights into various areas of the UK economy. With property and venture capital sectors showing consistent growth, coupled with a steady decline in inflation, the stage is set for sustainable economic expansion in the UK.

Additionally, the ongoing IMF meeting has provided a comprehensive overview of the global economic landscape and its potential trajectory, highlighting significant trends and developments shaping economies worldwide.

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.

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.