Legal
Last updated: March 2026
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.
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 start-up businesses fail.
2. You are unlikely to be protected if something goes wrong
• The business offering this investment is not regulated by the FCA. Protection from the Financial Services Compensation Scheme (FSCS) only considers claims against failed regulated firms. Learn more about FSCS protection here.
• The Financial Ombudsman Service (FOS) will not be able to consider complaints related to this firm.
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 a start-up business, you should not expect to get your money back through dividends. Start-up businesses 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 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.
Tax Relief
Tax relief depends on an individual’s circumstances and may change in the future. The availability of tax relief depends on the company invested in maintaining its qualifying status. Speak to your accountant and tax advisor as we do not provide tax advice.
About The FCA and Venture.Community UK (The Venture Society Ltd)
The Venture Society Limited is an Exempt Person as an Enterprise Scheme under Section 40 of the Financial Services and Markets Act 2000 (Exemption) Order 2001, operating not-for-pecuniary gain, with the principle objects of (a) the promotion or encouragement of industrial or commercial activity or enterprise in the United Kingdom or in any particular area of it; and (b) the dissemination of information concerning persons engaged in such activity or enterprise or requiring capital to become so engaged.
The Venture Society Ltd is not authorised or regulated by the Financial Conduct Authority (FCA), it is registered with the FCA in the capacity of the FCA to oversee it as a Mutual (registration number: 5226).
The content on this platform does not constitute financial advice, investment advice, trading advice, or any other sort of advice, and you should not treat any of the content as such and should make your own independent decisions and judgement.
The Venture Society Ltd does not recommend that any financial product or service is bought, sold, or held by you. Nothing on this platform should be construed as a personal recommendation, financial advice or investment advice.
Consequently, The Venture Society Ltd may operate to arrange deals in investments and financial promotions on this site have not been approved by an authorised person and are provided by a The Venture Society Limited as an unapproved promotion.
Certain areas of the Venture.Community platform are restricted to investors who have self-certified as High Net Worth Individuals (HNWI) or Self-Certified Sophisticated Investors in accordance with FCA guidelines and best practice. By self-certifying, you confirm that you understand the risks associated with investing in early-stage businesses and that you meet the relevant criteria.
The Venture Society Ltd will not be liable for any loss or damage arising from your use of or reliance on information provided on this platform. You are solely responsible for your own investment decisions. As part of our policy on investments made in the society, The Venture Society Ltd requires all members to sign a hold harmless agreement prior to investment for any information shared by the society or other members.
For more information, please contact us.
