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. Take 2 mins to learn more.

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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 August 2026

What are the key risks?
  1. 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. 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. Try the FSCS Investment Protection Checker or visit: www.fscs.org.uk/check/investment-protection-checker.

    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. Learn more about Financial Ombudsman Service Protection or visit: www.financial-ombudsman.org.uk/consumers .

  3. 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. 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. Read more at FCA InvestSmart Guide or visit: www.fca.org.uk/investsmart/5-questions-ask-you-invest .

  5. 5. The value of your investment can be reduced

    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: FCA InvestSmart or visit: www.fca.org.uk/investsmart .

    Please find the PDF version of the Risk Summary .

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Thomas Pitre
26TH January 2022
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<span id="hs_cos_wrapper_name" class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_text" style="" data-hs-cos-general-type="meta_field" data-hs-cos-type="text" >Do NFTs qualify for EIS?</span>

Do NFTs qualify for EIS?

Thomas Pitre
26TH January 2022

The digital economy is steadily entering the financial market’s spotlight with all-time high levels in the cryptocurrency market, the SEC’s approval of the first Bitcoin Exchanged-Traded-Fund and the evolving impact of blockchain’s role in decentralized finance. However, considering the market inflationary pressure and the economic impact of the coronavirus pandemic, many investors consider NFTs as an alternative way to obtain diversification benefits and hedge their portfolios against the systematic risk of the current macroeconomic environment.

 

What is an NFT?

Non-fungible tokens or NFTs are digital assets with unique identification codes that provide proof of ownership over virtual files such as photos (digital art), videos (sports moments) or audios, among others. 

 

Similar to cryptocurrencies, NFTs are based on blockchain technology, which offers users a simplified transaction procedure to access these assets by removing intermediary institutions and directly connecting artists with their audience. However, physical and cryptocurrencies are fungible (replaceable), meaning that they can always be traded or exchanged one for the other making them a medium for commercial transactions. In comparison, the NFTs’ market represents unique and irreplaceable tokens, making it impossible for one non-fungible asset to be equal to another. 

 

The current market for NFTs is mainly based around collectables, such as digital artwork, but with the technology advancements, NFTs are extending their presents in other industries. For example, the NBA’s Top Shot product is a market where investors can trade and collect famous NBA moments in a digitalised card form. This blockchain-based system generated more than $230 million in sales and recorded a single transaction value of $200,000. 

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Do NFTs qualify as EIS?

No, NFTs do not qualify for the EIS scheme, as they are personal property and not underlying shares in a company. However, UK start-up companies that create, develop or facilitate the transactions of the NFTs and their underlying technologies may be eligible for the EIS and SEIS. 

 

In this way, the EIS’ shares in a company that assist the developments in the NFTs ecosystem represent a diversification method for market participants, accessing this new market without owning tokens and getting exposure to the high risk associated with these products.




Sources: 

https://www.gov.uk/guidance/venture-capital-schemes-apply-for-the-enterprise-investment-scheme 

https://ethereum.org/en/nft/#nft-use-cases 

Thomas assists in the setting up and management of SEIS/EIS investment funds. Thomas is a student member of the Institute of Directors and has also successfully completed the EISA Organisation's EIS diploma and is an EIS Affiliate. After successfully completing the Investment Management Certificate (IMC), he became an active member of the UK's Chartered Financial Analyst Institute (CFA UK).

Thomas Pitre
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