Risk Warning
Please Invest Aware And Diversify Your Investments
Please read this summary of the general risks associated with investment carefully before investing. This is not a definitive list of the potential risks. Further specific risks will be listed on each specific opportunity. If you have any questions about risks associated with investment in early stage business, we strongly recommend that you speak to an independent financial adviser.
You are investing at your own risk and neither Sie Ventures nor any of its affiliates accepts any responsibility for any investment decision. Only those who meet the criteria defined in our terms and conditions are entitled to invest via the platform and as such Sie Ventures understands that you are sophisticated enough to understand the nature of the investments you are making via the syndicate.
1. RISK WARNING
1.1 Investing in high growth entities carries risks.
The following risks are associated with investing in early-stage businesses:
illiquidity,
lack of dividends,
loss of investment, and
dilution.
Any investment into early-stage businesses should be carried out carefully and should form part of a diversified investment portfolio.
1.2 The need for diversification when you invest
Diversification of an investment portfolio (that is spreading your investments) across different categories of investment will reduce overall risk. Sie Ventures recommends that you speak to an independent financial adviser about diversification of investments noting that you are exposed to risk by investing in early-stage businesses. Fund investments enable an investor to diversify his investment portfolio as a fund will most likely have a portfolio of assets. However, the general risks of investing still apply.
1.3 Equity Investments: The Risks
The following general risks apply:
(i) Equities are illiquid
As investments made via this platform result in the subscription for shares in private companies, it is important that you keep in mind that such private Company shares cannot be readily be sold as they unlikely to be a secondary market. This means that you may need to hold your investment in a particular company for a number of years before realising your investment.
(ii) Loss of investment
Only invest a sum of money that you are willing, and can afford, to lose. You may lose part or all of your investment if a business fails or doesn’t grow as anticipated. Neither Sie Ventures nor any of our affiliates will reimburse any part of your invested sum if the business fails completely or fails to achieve growth. This also applies to companies, their directors and professional advisers. You are investing at your own risk.
(iii) Tax Relief
Entitlement to tax relief is not guaranteed and you may lose some or all of your tax relief over the course of any particular investment.
(iv) Dilution
Dilution may occur in relation to your shareholding in a business over the course of your investment. Dilution refers to the reduction of your shareholding. This in turn impacts your voting rights and dividends as your percentage shareholding is reduced.
Dilution of your shareholding will occur where a company issues more shares. For example, a company may issue shares to incoming investors, to employees (most commonly in the form of options) as incentivisation to grow a company or as consideration for the acquisition of an asset or another business.
Depending on the rights offered to you at the time of your investment, you may be able to subscribe for additional shares as part of a pre-emptive round (provided that such rights are not waived). Pre-emption rights entitle you to subscribe for your pro-rata share of most new share issues by a company. Should you fail to utilise any such right, you will be diluted.
Please carefully review the current (or, if relevant, proposed) constitutional documents together with all information provided via the platform to understand the rights attaching to the shares (and, in particular, if you have any pre-emptive rights).
(v)There is no regular return on your investment. Unlike certain types of convertible notes or bonds, an investment in shares does not lead to a regular return on investment. It is not common for companies to pay dividends until exit as any profits will be used by the company to fuel growth. You may not see a return on your capital for a number of years.
1.4 Convertible Instruments: The Risks
(i) For some investments, the company may seek to issue a convertible instrument. Such instruments provide for the issue and allotment of shares at a later date. Most commonly, conversion will take place at the next equity fundraising or by a specified longstop date.
(ii) Please carefully read the relevant convertible instrument and any related information published on the deal.
(iii) You are exposed to the same risk level when you invest via a convertible instrument as you are investing directly into equity.