Your personal decision to investA decision to invest in a company is a personal decision by you and that no responsibility for the consequences of that decision is accepted by Share In Ltd ("ShareIn") or by any of its directors, agents, employees or other members. To invest through ShareIn you need to understand the following important risks:
Losing all of your investmentInvestment, whether in new or existing businesses, carries high risks as well as the possibility of high rewards. Accordingly each investor should consider very carefully whether such investments are suitable in the light of personal circumstances and commitments and the financial resources available to each Investor. ShareIn does not promise any return on investment nor that the value of any investment will be maintained. Engaging in any investment activity may expose you to a significant risk of losing all of your investment and these investments are much riskier than a savings account. ISA eligibility does not uarantee returns or protect you from losses. Most of the investee companies which are listed on ShareIn are new companies with limited if any track record. These companies will provide information such as their business plan and financial forecasts. Please be warned that these documents are not guarantees that the relevant company can achieve what it is hoping to do. Equally the information provided may state certain facts and statements, and again please be warned that ShareIn is not responsible for checking the accuracy of these facts and statements (which may not always prove to be true or complete).
If a company you invest in fails, neither the company – nor ShareIn – will pay back your investment.
Your investments are not covered by the Financial Services Compensation SchemeWhen your capital is invested it is not covered by the Financial Services Compensation Scheme (FSCS). Before
it is invested or once the proceeds of investments are returned, your money
will be held by the money recipient in a client account and subject to separate
protections applicable to credit institutions and banks.
No established market – lack of liquidityAs an investor you should be aware that no established market exists for the trading of shares in private companies (which the companies that are listed on the ShareIn Website are), and such shares are not easily realisable. It must be appreciated that there could be difficulty in selling such investments at a reasonable price and, in some circumstances, it may be difficult to sell them at any price.
Lack of dividendsThe companies pitching on ShareIn are early stage companies, and these companies will rarely pay dividends to their investors. This means that you are unlikely to see a return on your investment until you are able to sell your shares. Profits are generally re-invested into the company to fund growth. Companies have no obligation to pay shareholder dividends.
Possibility of dilutionCompanies who pitch through ShareIn may offer Ordinary Shares, which include pre-emption rights that protect an investor from dilution. Companies who offer shares must give shareholders the opportunity to buy additional shares during a subsequent fundraising round so that they can maintain or preserve their shareholding. Dilution affects shareholders who do not buy any of the new shares being issued. As a result an existing shareholder's proportionate shareholding of the company is reduced, or ‘diluted’. This has an effect on a number of things, including voting, dividends and value of shareholdings.
The need for diversificationDiversification by spreading your money across different types of investments should reduce your overall risk of financial loss. We highly recommend investors do this to maintain a balanced portfolio. Investors should also consider avoiding putting their money in the same investment as immediate family members. Investors should only invest a proportion of their available investment funds due to the high risks involved.
Tax reliefs and savings may not materialiseShareIn does not guarantee that Enterprise Investment Scheme ("EIS") tax relief, SEED EIS tax relief or any other type of tax relief shall apply in respect of any investments made by you as an investor in companies via the ShareIn Website. ShareIn recommends that you take your own tax advice on any investments which you make via the ShareIn Website. ShareIn does not make personal recommendations and does not promise that a particular investment will be suitable for the individual circumstances of an investor. Please note that just because a company has obtained an advance clearance from HMRC to confirm that it is for example an EIS qualifying company, it must be noted that the company can subsequently lose this status if it does not spend the investment in a prescribed way or it changes its business or share structure in a way which is contrary to the relevant tax rules. Furthermore if the investee company goes to a successful exit event within three years (which you may have no control over) then the benefits of EIS tax relief will not apply. If the investee company is required by a majority of its investors to enter into a shareholders’ agreement (using the form prescribed by ShareIn) then there are standard provisions to help ensure that any tax relief is maintained but it should be noted that this cannot be guaranteed as a complete safeguard in itself.
Where security is in place or assets held in support of the investment, there is a risk that if the underlying borrower defaults, or if there is a delay in realising the asset, then the asset may not be sold for enough to cover the loan or may result in delayed repayment of investors’ money. Additionally, where the security is not a first charge, in the event of a sale of the asset funds will be available to be paid to investors only after payment to the chargeholders who rank ahead of investors.