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. 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 use this URL link:

    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 this service from the following Financial Ombudsman Service Protection

    or use this URL link:

    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 the FCA InvestSmart Guide

    or use this URL link:

    www.fca.org.uk/investsmart/5-questions-ask-you-invest

    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 use this URL link:

    www.fca.org.uk/investsmart.

    Please find the PDF version of the Risk Summary.

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The Sapphire guide to (EIS) and (SEIS).

Our FREE eBook guide will help you understand SEIS process.

Our eBook will save you valuable time and expense to get your company approved by HMRC and more importantly, able to raise finance.

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What's Included?

  • What is the EIS & SEIS.
  • Which companies qualify.
  • Explanation of the tax benefits.
  • How to get HMRC advance assurance.
  • What does the application process entail.

Frequently Asked Questions

1

Can I raise SEIS & EIS funds as a non-UK parent company?

A company can only apply for SEIS and EIS as a parent or single company. A company in order to apply for SEIS/EIS must be wholly independent and not controlled by another company. The company applying SEIS/EIS must be able to meet the permanent establishment condition, a subsidary operating in the UK will not meet this condition, the parent company will need to meet the permanent establishment condition.

2

My company has EIS assurance but not issued shares can I use SEIS?

Assuming your company meets the SEIS qualifying conditions and you haven't issued EIS shares, the company could issue SEIS shares in theory. But I would strongly recommend applying for advance assurance before you issue the SEIS shares, this is to ensure your company meets the qualifying conditions

3

How long does it take HMRC to approve my application?

HMRC typically takes 45 days to come back regarding an application. However, if HMRC has any questions this can prolong the process, these questions tend to relate to the companies qualifying status. Be sure to include aleast a sentance or two, in your cover letter indicating how the company meets each qualifying condition.

4

What if the ebook doesn't answer all my questions?

Ask us!

At Sapphire Capital, we are always happy to help therefore don't be afraid to send us an email or book a call to discuss your remaining questions.

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5

Is this ebook really free?

Absolutely!

Just sharing some free knowledge that we hope you’ll find useful. Keep us in mind next time you have any questions!

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Boyd is a co-founder of Sapphire and a leading voice in the venture capital industry, recognised for his expertise in designing, launching, and managing LP/GP, property, BR and SEIS and EIS funds. Over the past three decades, Boyd has helped future investment managers turn their ideas into successful, FCA-compliant venture capital funds. His practical, educational approach has made Sapphire a trusted partner for future fund managers building new investment vehicles and for startups seeking growth capital. When he’s not advising on fund structures or making investments in investee companies, Boyd shares his knowledge as an Honorary Professor of Practice in Venture Capital and as a faculty member at Harvard University, teaching Venture Capital.

Boyd Carson
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