Your Capital is at Risk.
Investment in new business carries high risks as well as the possibility of high rewards. It is highly speculative and potential investors should be aware that (a) they could lose the total value of their investment and (b) no established market exists for the trading of shares in private companies, making it difficult to sell your shares. Before investing in a project about which information is given, potential investors are strongly advised to take advice from a person authorised by the financial service and markets Act 2000 (FSMA) who specialises in advising on investments of this kind. First Sentinel Corporate Finance Limited (“First Sentinel”) cannot advise on the merits or risks of investments.
Please see below some information relating to investing equity in early-stage businesses which are not quoted on any stock exchange:
Only invest what you can afford to lose.
Investors should only invest a small proportion of their available investment funds and should balance this with safer, more liquid investments. The majority of early-stage businesses fail or do not scale as planned. Therefore, investing in these businesses may involve significant risk. It is likely that you may lose all, or part, of your investment. If a business you invest in fails, neither the company, nor First Sentinel will pay you back your investment.
Dependence on the Directors.
It is highly likely that the success of many investee companies will depend in part upon the ability of their directors to develop and maintain a strategy that achieves the company’s investment objectives. Should the directors leave the business for any reason, then performance in the investee company is likely to deteriorate.
Lack of Operating History
Some companies are relatively early stage and, as such, have no substantive operating history upon which prospective investors can evaluate likely 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.
Forecasts are not a reliable indicator of future performance.Look to spread your risk by diversifying.You can reduce your risk by spreading your investment across multiple deals, rather than investing all available funds into one deal. Many investment professionals suggest you invest in a minimum of 5 (ideally 10) deals.
Lack of liquidity
Liquidity is the ease with which you can sell your shares after you have purchased them. Equity investments cannot be sold easily and they are unlikely to be listed on a secondary trading market, such as AIM, Plus or the London Stock Exchange. Even successful companies rarely list shares on such an exchange.
Dividends are payments made by a business to its shareholders from the company’s profits. Most of the companies featured on the website 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.
Equity investment in shares may be subject to dilution, if the investee company issues more shares. If there are “pre-emption rights” in the investor agreement, it means you will be offered a chance to buy more shares, if there is a further fundraising, which will enable you to maintain your percentage shareholding in the company. Dilution affects every existing shareholder who does 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.
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Our Website is made available free of charge.
We may transfer our rights and obligations under these terms to another organisation. We will always tell you in writing if this happens and we will ensure that the transfer will not affect your rights under the contract.
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You must not modify the paper or digital copies of any materials you have printed off or downloaded in any way, and you must not use any illustrations, photographs, video or audio sequences or any graphics separately from any accompanying text.
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You must not use any part of the content on our Website for commercial purposes without obtaining a licence to do so from us or our licensors.
Links to Other Websites
This Website may contain links to other independent third-party sites. Unless we expressly say otherwise, you should assume that these other websites are not under the control of First Sentinel or our affiliates. We assume no responsibility for the content of such websites, and we disclaim liability for any and all forms of loss or damage arising out of the use of them. Additionally, even if we include a link to another website on this Website, that does not mean that we endorse that other website or in any way recommend that you should use it, you will need to make your own independent judgment regarding your interaction with these websites.
Viruses, Hacking and other Offences
You must not misuse this Website by knowingly introducing viruses, trojans, worms, logic bombs or other material which is malicious or technologically harmful (together “Viruses”). You must not attempt to gain unauthorised access to our site, the server on which our site is stored, or any server, computer or database connected to this Website. You must not attack this Website via a denial-of-service attack.
By breaching this provision, you may commit a criminal offence under the Computer Misuse Act 1990. We will report any such breach to the relevant law enforcement authorities, and we will co-operate with those authorities by disclosing your identity to them. In the event of such a breach, your rights to use this Website will cease immediately.
We will not be liable for any loss or damage caused by a denial-of-service attack or Viruses that may infect your computer equipment, computer programs, data or other proprietary material due to your use of this Website or to your downloading of any material posted on it, or on any website linked to it.
By using this Website, you should be aware that:
First Sentinel does not in any of its Publications take into account any particular recipient’s investment objectives, specific investment goals, financial circumstances and specific needs and demands. Therefore, all First Sentinel are, unless otherwise specifically stated, intended for informational and/or marketing purposes only and SHOULD NOT be construed as: business, financial, investment, hedging, legal, regulatory, tax or accounting advice; and/or a recommendation or trading idea; and/or any other type of encouragement to act, invest or divest in a particular manner.
We make no warranty or representation (express or implied) that the Website will meet your requirements, that it will be of satisfactory quality, that it will be fit for a particular purpose, that it will not infringe the rights of third parties, that it will be compatible with all systems, that it will be secure, or that all information provided will be accurate.
We make no guarantee of any specific results from the use of the Website.
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We accept no liability for any disruption or non-availability of the Website resulting from external causes including, but not limited to, ISP equipment failure, host equipment failure, communications network failure, power failure, natural events, acts of war, or legal restrictions and censorship.
To the maximum extent permitted by law, we accept no liability for any direct or indirect loss or damage, foreseeable or otherwise, including any indirect, consequential, special or exemplary damages arising from your use of the Website or any information contained in it, and you use the Website and its Content at your own risk. This is not intended to exclude or restrict our liability for death or personal injury arising from your use of the Website.
Users should be aware that they use the Website and its Content at their own risk.
Risk Warning: The past performance of any investment is not necessarily a guide to future performance. The value of investments or income from them may go down as well as up.
Your capital is always at risk: As with all investments your capital is at risk. The value of investments and any income from them are not guaranteed and may go down as well as up. You may get back less than the original amount invested.
Tax Treatment: Tax treatment depends on your individual circumstances and may be subject to change. Should you be in any doubt, please seek professional advice.
The material displayed on the Website is for information purposes only and it is provided without any guarantees, conditions or warranties as to its accuracy. To the extent permitted by law, we, other members of our Group of companies and third parties connected to us hereby expressly exclude:
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Any liability for any direct, indirect or consequential loss or damage incurred by any user in connection with our Website or in connection with the use, inability to use, or results or the use of this Website, any websites linked to it and any materials posted on it, including, without limitation any liability for:
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