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
• If the business you invest in fails, you are likely to lose 100% of the money you invested. Most unlisted early stage companies fail.
2. 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 firm, FOS may be able to consider it. Learn more about FOS protection here.
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 unlisted early stage companies, you should not expect to get your money back through dividends. Unlisted early stage companies 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 any one to do well.
• A good rule of thumb is not to invest more than 10% of your money in high-risk investments.
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 unlisted early-stage companies 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.
Portfolio News
Stay up to date with the latest from the Molten Ventures EIS. Explore recent deals, portfolio company milestones, and insights into the high-growth startups we’re backing.
Latest EIS News
Powering Biopharma’s Digital Backbone | Molten Backs PolyModels Hub £7m Series A
We are pleased to announce our investment in PolyModels Hub £7m Series A, alongside Marathon Venture Capital, to help accelerate the digital transformation of biopharma process development.
Read article
Molten Ventures backs Duel to disrupt marketing with $16m Series A
We are excited to announce that we have co-led a $16 million Series A funding round in Duel, the leading Brand Advocacy platform that empowers brands to grow through their own communities of fans and creators.
Read article
Molten Supported by Artis Partners Leads European VC Exit Market
Announces Molten’s sustained success in delivering market-leading exit outcomes for European venture-backed companies.
Read article
Molten leads £5 million round in Renew Risk
Molten is delighted to welcome Renew Risk to its portfolio. Renew Risk is domain leader in risk modelling and analytics for renewable energy assets.
Read article
Molten leads £3m round in Concretene to roll out carbon-saving construction tech
Molten Ventures is delighted to announce that it has co-led a £3m round in Concretene—a nanomaterial technology firm that aims to decarbonise the concrete industry.
Read article
Molten Ventures leads €5m round in Oliva to expand workplace mental health support
We are proud to announce that Molten has led a €5m round in Oliva, the all-in-one platform & partner for employee wellbeing.
Read article