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

Risk Summary

Take 2 minutes to read

What are the key risks?
  1. You could lose all the money you invest
If the businesses you invest in fails, you are likely to lose 100% of the money you invested. Most start-up businesses fail.
  1. 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.
  1. 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 realise your investment prior to an exit event, such as a public listing. There is no guarantee these will take place or be successful and it could be eight years or more before such an event occurs. You should not expect to be able to access your money until an exit event. 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.
  1. 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 (depending on your specific circumstances).
  1. 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. Risk warning Investing in start-ups and early-stage businesses involves risks, including illiquidity, lack of dividends, loss of investment and dilution, and it should be done only as part of a diversified portfolio. Traditum is targeted exclusively at investors who are sufficiently sophisticated to understand these risks and make their own investment decisions. You will only be able to invest via Traditum once you are registered as sufficiently sophisticated. Investment opportunities are not offers to the public and investors must be eligible. Please seek independent advice as required as Traditum does not give investment or tax advice.    

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