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. Take 2 mins to learn more.

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?

1. 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.

• Certain of these investments can be held in an Innovative Finance ISA (IFISA). An IFISA does not reduce the risk of the investment or protect you from losses, so you can still lose all your money. It only means that any potential returns will be tax free.

• 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.

2. 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.

3. 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.

4. 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.

5. 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 here.

• 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 FCA’s website here.





Risk Warning

Investment Risks

Investing in small public listed or private companies involves many risks, including illiquidity, lack of dividends, loss of investment and equity dilution. It should be done only as part of a diversified portfolio. Investing in debt pitches through Crowd for Angels (UK) Limited involves lending to companies and therefore your capital is at risk and interest payments are not guaranteed if the borrower defaults. Please click here to read the full Risk Warning.

Investor Suitability

Investments on this website are targeted exclusively at investors who are sufficiently sophisticated to understand the risks involved and make their own investment decisions. You will only be able to invest in pitches on this website once you are fully authorised and the investment is deemed appropriate for you.

Basis of Investment

Investments can only be made on the basis of information provided in pitches by the investee companies concerned. Crowd for Angels takes no responsibility for information provided by external sources, including investee company websites.

Forward Looking Statements & Forecasts

Pitches may contain forward looking statements and financial forecasts or projections. Forecasts are not a reliable indicator of future performance. Crowd for Angels makes no judgement or opinion of the likelihood of targets being achieved. 

Lack of FSCS Protection

Investments made in companies listed on the Crowd for Angels platform are not covered by the Financial Services Compensation Scheme (FSCS).

Tax Relief

The availability of any tax relief, including EIS and SEIS, depends on the individual circumstances of each investor and of the company concerned, and may be subject to change in the future. If you are in any doubt about the availability of any tax reliefs, or the tax treatment of your investment, you should obtain independent tax advice before proceeding with your investment.

Innovative Finance ISA

Holding an investment within an innovative finance ISA does not reduce the risks associated with an investment or guarantee returns and it is possible to lose all of the money invested.

This page has been approved as a Financial Promotion by Crowd for Angels (UK) Limited (Company number: 03064807), which is authorised and regulated by the Financial Conduct Authority (Reference number: 176508). 

Crowd for Angels is for investors who understand their capital is at risk, learn more here.