Risk Warning

Investing in startups can be very rewarding, but it involves a number of risks and challenges. If you choose to invest through Seedrs, you need to be aware of and accept five important considerations:

1. Loss of Capital

Most startups fail, and if you invest in a business through the platform, it is significantly more likely that you will lose all of your invested capital than that you will see a return of capital or a profit. You should not invest more money through the platform than you can afford to lose without altering your standard of living.

2. Illiquidity

Any investment you make through the platform will be highly illiquid. There is no secondary market for the shares of the investee company. This means that you are unlikely to be able to sell your shares until and unless the investee company floats on a securities exchange or is bought by another company. Even for a successful business, a flotation or purchase is unlikely to occur for a number a years from the time you make your investment.

3. Rarity of Dividends

Startups rarely pay dividends. This means that if you invest in a business through the platform, even if it is successful you are unlikely to see any return of capital or profit until you are able to sell your shares in the investee company. Even for a successful business, this is unlikely to occur for a number of years from the time you make your investment.

4. Dilution

Any investment you make through the platform is likely to be subject to dilution. This means that if the business raises additional capital at a later date, it will issue new shares of the investee company to the new investors, and the percentage of the investee company that you own will decline. These new shares may also have certain preferential rights to dividends, sale proceeds and other matters, and the exercise of these rights may work to your disadvantage. Your investment may also be subject to dilution as a result of the grant of options (or similar rights to acquire shares) to employees of, service providers to or certain other parties connected with, the investee company.

5. Diversification

Investing in startups should only be done as part of a diversified portfolio. This means that you should invest relatively small amounts in multiple businesses rather than a lot in one or two businesses. It also means that you should invest only a small proportion of your investable capital in startups as an asset class, with the majority of your investable capital invested in safer, more liquid assets.

 

I declare that I am a self-certified sophisticated investor in the form of Schedule 5 Part II of the UK Financial Services and Markets Act (Financial Promotion) Order 2005.

I understand that this means:

(a) I can receive financial promotions that may not have been approved by a person authorised by the Financial Services Authority;

(b) the content of such financial promotions may not conform to rules issued by the Financial Services Authority;

(c) by signing this statement, I may lose significant rights;

(d) I may have no right to complain to either of the following-

(i) the Financial Services Authority

(ii) the Financial Ombudsman Scheme

(e) I may have no right to seek compensation from the Financial Services Compensation Scheme.

I am a self-certified sophisticated investor because of at least one of the following applies-

(a) I am a member of a network or syndicate of business angels and have been so for at least the six months prior to the date below;

(b) I have made more than one investment in an unlisted company in the two years prior to the date below;

(c) I am working, or have worked in the two years prior to the date below, in a professional capacity in the private equity sector, or in the provision of finance for small and medium enterprises;

(d) I am currently, or have been in the two years prior to the date below, a director of a company with an annual turnover of at least £1 million.

I accept that I can lose my property and any other assets from making investment decisions based on financial promotions.

I am aware that it is open to me to seek advice from someone who specialises in advising on investments.

I have read and accept the Risk Warning on this page and by clicking the link below declare myself to be a sophisticated investor.

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