Don’t invest unless you’re prepared to lose all the money you invest. These are high-risk investments and you are unlikely to be protected if something goes wrong.
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Risk summary for non-readily realisable securities which are shares:
Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be high risk.
Last updated: 01 July 2026
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
Protection from the Financial Services Compensation Scheme (FSCS), in relation to claims against failed regulated firms, does not cover poor investment performance.
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.
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 anyone to do well.
A good rule of thumb is not to invest more than 10% of your money in high-risk investments.
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 anyone to do well.
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 website:
A short, no-obligation conversation about whether launching a fund is the right route for you, and what it would take. We can cover structure, timescales, cost and regulatory requirements. Nothing to prepare in advance.
Boyd Carson co-founded Sapphire in 2009 and has since helped launch more than 50 UK venture funds. He is an Honorary Professor of Venture Capital, teaches on Harvard University's graduate venture capital course, and holds Sapphire's FCA compliance oversight role.
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A short, no-obligation conversation about whether launching a fund is the right route for you, and what it would take. We can cover structure, timescales, cost and regulatory requirements. Nothing to prepare in advance.
Boyd Carson co-founded Sapphire in 2009 and has since helped launch more than 50 UK venture funds. He is an Honorary Professor of Venture Capital, teaches on Harvard University's graduate venture capital course, and holds Sapphire's FCA compliance oversight role.
