Crowdfunding investment risks | WahedVentures
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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 Warning

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.

Read our full Risk Warning

Risk Information

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
    • Most investments are shares in start-up businesses or bonds issued by them. Investors in these shares or bonds often lose 100% of the money they invested, as most start-up businesses fail.
    • Certain of these investments can be held in an Innovative Finance ISA (IFISA). An IFISA does not reduce the risk of the investment or protect you from losses, so you can still lose all your money. It only means that any potential returns will be tax free.
    • Checks on the businesses you are investing in, such as how well they are expected to perform, may not have been carried out by the platform you are investing through. You should do your own research before investing.
  2. You won't get your money back quickly
    • Even if the business you invest in is successful, it will likely take several years to get your money back.
    • 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.
    • Start-up businesses very rarely pay you back through dividends. You should not expect to get your money back this way.
    • Some platforms may give you the opportunity to sell your investment early through a ‘secondary market’ or ‘bulletin board’, but there is no guarantee you will find a buyer at the price you are willing to sell.
  3. 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.
  4. The value of your investment can be reduced
    • If your investment is shares, 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.
  5. You are unlikely to be protected if something goes wrong
    • Protection ffrom 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.
    • from the Financial Ombudsman Service (FOS) does not cover poor investment performance. If you have a complaint against an FCA-regulated platform, FOS may be able to consider it. Learn more about FOS protection here.

If you are interested in learning more about how to protect yourself, visit the FCA’s website here.

For further information about investment-based crowdfunding, visit the FCA’s website here.

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All persons who register as an 'investor' on this Website should carefully read the following warnings before making any investment.
All investment products carry risks. The relevant webpages and documents will cover risks specific to an individual offer. Please bear in mind the following general risks involved when investing through this Website:


YOUR PERSONAL DECISION TO INVEST

A decision to invest in a company is a personal decision by you and no responsibility for the consequences of that decision is accepted by Maydan Capital Ltd trading as Wahed Ventures ("Wahed Ventures") or by any of its partners, directors, agents, employees, or other members. To invest through this Website you need to understand the following important risks:


YOU ARE NOT COVERED BY THE FINANCIAL SERVICES COMPENSATION SCHEME

When your capital is invested it is not covered by the Financial Services Compensation Scheme. 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.


LOSS OF INVESTMENT

Investments, whether in new or existing businesses, carry 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 their own personal circumstances, commitments and available financial resources. Engaging in any investment activity may expose you to a significant risk of losing all of your investment. If a company fails, it is likely that you may lose all, or part, of your initial investment and receive no outstanding or future dividend payments. In such circumstances neither the company nor Wahed Ventures will pay you back your investment.

Most of the companies which are listed 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 Wahed Ventures are not responsible for checking the accuracy of these facts and statements, which may not always prove to be true or complete.


LIQUIDITY

As an investor you should be aware that no established market exists for the trading of bonds or equity in private companies, and as such 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.


DIVERSIFY YOUR PORTFOLIO

Diversification 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

Wahed Ventures recommend that you seek independent tax advice on any investments which you make via this Website. It is your responsibility to make sure that you have paid any and all taxes due in relation to any investment that you make through Wahed Ventures.


RECOMMENDATION

Wahed Ventures do not provide advice or make personal recommendations. If you are in any doubt about the action you should take or the contents of a particular Offer Document, you should seek advice from an independent financial advisor authorised under the Financial Services and Markets Act 2000.


PAST PERFORMANCE

Past performance is not a reliable indicator of future performance. You should not rely on any past performance as a guarantee of future investment performance.


RISKS RELATED TO INVESTMENTS IN FOREIGN ISSUERS

If securities are offered by an Issuer in a foreign jurisdiction, or the security is structured through a foreign special-purpose-vehicle, or you purchase securities that are issued by foreign Issuers, your investment and continued holding of securities may be subject to the laws and regulations of that jurisdiction. The investment or you yourself may be subject to additional tax liabilities, transaction costs or capital controls under the foreign laws. Any claims or action may need to be raised before foreign courts or authorities. You should be aware that overseas markets may be subject to rules which may offer different or diminished investor protection as compared to the United Kingdom or any other jurisdiction in which you reside or are domiciled.

Where an investment is denominated in a currency other than GBP, changes in rates of exchange may have an adverse effect on the value, price of, or income derived from the investment. You should be aware that overseas markets may be subject to rules which may offer different or diminished investor protection as compared to the United Kingdom or any other jurisdiction in which you reside or are domiciled. Securities denominated in foreign currencies may see their value fall as a result of exchange rate movements.

Before making an investment in securities offered by a foreign Issuer, you should be fully aware of the types of redress available to you in the United Kingdom or other home nation and the jurisdiction of the foreign Issuer, as any claims or action may need to be raised before foreign courts or authorities and even if any judgments are obtained, there may be difficulties in attempting to enforce these in the United Kingdom or the other state in which you reside.

You should remain mindful that in some countries, legal concepts which are practiced in mature legal systems may not be in place or may have yet to be tested in courts. This would make it more difficult to predict with a degree of certainty the outcome of judicial proceedings or even the quantum of damages which may be awarded following a successful claim.

Equity investments are not readily realisable and involves risks, including loss of capital, illiquidity, lack of dividends and dilution, and it should be done only as part of a diversified portfolio. Investments of this type are only for investors who understand these risks. You will only be able to invest in the company once you have met our conditions for becoming a registered member.

PLEASE CLICK HERE TO READ THE FULL RISK WARNING

Maydan Capital Ltd trading as Wahed Ventures is registered in England and Wales (Company No. 13451691), registered office: 87-89 Baker Street, London, England, W1U 6RJ, UK. Maydan Capital Ltd (FRN: 963613) is an appointed representative of Wahed Invest Ltd (FRN: 833225), an authorised and regulated firm by the Financial Conduct Authority.
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Maydan Capital Ltd trading as WahedVentures (FRN: 963613) is an appointed representative of Wahed Invest Ltd (FRN: 833225), an authorised and regulated firm by the Financial Conduct Authority.

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