Don’t invest unless you’re prepared to lose all your money. These are high-risk investments and you are unlikely to be protected if something goes wrong.
What are the key risks?
1. You could lose all the money you invest.
If the business you invest in fails, you are likely to lose 100% of the money you invested. Most start-up businesses fail.
2. You are unlikely to be protected if something goes wrong.
The business offering this investment is not regulated by the FCA. Protection from the Financial Services Compensation Scheme (FSCS) only considers claims against failed regulated firms. Learn more about FSCS protection here. https://www.fscs.org.uk/what-we-cover/investments/
Protection from the Financial Ombudsman Service (FOS) does not cover poor investment performance. If you have a complaint against an FCA-regulated firm, FOS may be able to consider it. Learn more about FOS protection here. https://www.financial-ombudsman.org.uk/consumers
3. You won’t get your money back quickly.
Even if the business you invest in is successful, it may take several years to get your money back. You are unlikely to be able to sell your investment early. 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. If you are investing in a start-up business, you should not expect to get your money back through dividends. Start-up businesses rarely pay these.
4. 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 anyone to do well. A good rule of thumb is not to invest more than 10% of your money in high-risk investments. Read more about it here or via the URL link https://www.fca.org.uk/investsmart/5-questions-ask-you-invest.
5. The value of your investment can be reduced.
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. If you are interested in learning more about how to protect yourself, visit the FCA’s website here or via the URL link https://www.fca.org.uk/investsmart.
Please find the PDF version here.
The Nova Cofoundery SEIS & EIS Fund
The fund’s investment strategy has been developed to allow investors to take advantage of the venture building methodology within a growth-focused, tax efficient and diversified investment portfolio.
The fund invests into qualifying UK early stage startups which are generated through a venture building model. Built Ventures has a core venture building partner – The Venture Studio, which takes its founders from an initial idea to discovering its market and building the business. The Venture Studio builds a dedicated team around startups which explores, validates & scales founders and their ideas. The team includes software and hardware engineers, marketing and finance specialists, designers, project managers, and others as needed.
What makes The Venture Studio stand out? Why are they Built Ventures core dealflow partner?
The Venture Studio is a venture builder which specialises in building from the ground up early stage, EIS & SEIS eligible technology businesses which have the potential for high growth.
What makes it unique is it’s systematic and risk mitigation approach to supporting founders and their startups. They do this through;
- a tried and tested method in building and scaling companies
- providing the founder with its first core team to work directly on the business
The Venture Studio’s allows for an eco-system where founders harness the expertise of a team who bring unparalleled knowledge and support to them as individuals and to their company.
The Venture Studio and Built Ventures share the same belief that venture building is the secret sauce to creating successful startups and just providing capital is not enough.
SEIS & EIS tax incentives
SEIS and EIS tax relief are mechanisms designed to benefit investors in specific types of companies. The Enterprise Investment Scheme (EIS) grants relief to investors in qualifying companies, and the Seed Enterprise Investment Scheme (SEIS) extends additional benefits to investors participating in companies in their early developmental phases.
- Up to 30% income tax relief (50% for SEIS)
- Disposal relief (capital gains on the invested funds are tax free)
- Capital gains deferral (or 50% capital gains tax exemption for SEIS)
- Inheritance tax relief
- Loss relief
Investing in start-ups and early-stage companies involves risks, including illiquidity, lack of dividends, loss of investment and dilution. It should be done only as part of a diversified portfolio. There is no assurance that the investment objectives of any investment opportunity will be achieved or that the strategies and methods described herein will be successful. Past performance is not necessarily a guide to future performance and the value of an investment may go down as well as up.
The investments which we promote are targeted exclusively at investors who understand the risks of investing in early-stage businesses and can make their own investment decisions. Any pitches for investment are not offers to the public and investments can only be made through Sapphire Capital Partners LLP as the fund manager. Neither Built Venture Capital Limited, Sapphire Capital Partners LLP, nor any of their members, directors or employees provide any financial, legal or tax advice in relation to the investments, and investors are recommended to seek independent advice before committing or if they have any doubts as to the appropriateness or suitability of such an investment in relation to their specific circumstances.
Built Ventures is a trading name for Built Venture Capital Limited. Built Venture Capital Limited is a private limited company registered in England and Wales (Company Number 11591402). Built Venture Capital Limited (FRN 826519) is an Appointed Representative of Sapphire Capital Partners LLP (FRN: 565716), who is authorised and regulated by the Financial Conduct Authority.