Don't invest unless you're prepared to lose all your money.

These are high-risk investments and you are unlikely to be protected if something goes wrong.

Risk summary for non-readily realisable securities which are shares:

Last updated: 31 March 2024

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

If the business you invest in fails, you are likely to lose 100% of the money you invested. Most start-up businesses fail.

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 here or via the following URL link: https://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 FOS protection here or via the following URL link: https://www.financial-ombudsman.org.uk/consumers.

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. 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 about it here or via the following URL link: https://www.fca.org.uk/investsmart/5-questions-ask-you-invest.

5. The value of your investment can be reduced

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’s website here or via the following URL link: https://www.fca.org.uk/investsmart.

Please find the PDF version here.

At a glance

Current status: Open
Fund type: EIS
Investment goal: Capital growth
Focus: B2B
Target Return: 6x
Target Holding Period: 10 years
Minimum Subscription: £10,000

Key Information

The Founder and Lightning Capital Technology Transformation EIS Fund invests in and provides Technology Services to UK based early-stage B2B businesses which can benefit from Founder and Lightning’s digitisation strategy.

Focus will be placed upon two types of B2B companies:

1. Existing B2B & B2B2C Software Companies. With this type of business, the Fund seeks to help them build out their software products. Often these companies will approach the Fund with underdeveloped technology which has helped the company prove their value proposition, but is not built for scalability. The Fund can help these companies reach the next stage of their growth journey by building scalable technology solutions to help accelerate revenue growth.

2. Offline to Online Companies. These are companies that have built an offline or analogue business. They have proven their value proposition and have won a customer base. The Fund seeks to help these companies undergo digital transformation to improve either their growth, margins or both. The Fund finds these opportunities very attractive for several reasons. First, these companies tend to be raising investment at lower valuation multiples than technology companies in the traditional venture capital ecosystem. This enables the Fund to acquire larger stakes in the businesses for less capital. The second reason these companies are attractive is they have already reached product-market-fit. The Fund is then positioned to integrate its digital transformation strategy to improve what they have already built.

EIS tax incentives

The companies the fund invest in are expected to be EIS-qualifying, which makes the Technology Transformation EIS Fund suitable for qualifying clients who would potentially benefit from the following tax reliefs:

Up to 30% income tax relief
Tax-free investment growth
Capital gains deferral
Inheritance tax relief
Loss relief

Please note: EIS tax reliefs are only made available to investors because of the higher risks associated with investing in early-stage companies. Also, the availability of tax reliefs will depend on the investor's individual circumstances, and may be subject to change in the future. In addition, the availability of any tax relief depends on the investee companies maintaining their qualifying status.

Fund team

Conor Moylan LinkedIn
Matt Jonns LinkedIn
Olex Gorodnytskyi LinkedIn
Boyd Carson View bio
Ellen Kerr View bio

Example companies from the current UCreate portfolio

Revolutionising kitchen spaces with short-term, flexible licences to connect food vendors with commercial kitchens across the UK.

View website

Employee experience specialists and the ‘go to’ place for workplace treats. Three-time winner of Supplier of the Year at the Office Management Award.

View website

The largest virtual golf clubhouse where golfers share their love for the game, made by golfers for golfers.

View website

A Service Governance tool that brings together suppliers and their clients leading to stronger, more profitable relationships.

View website

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Important information

To invest, you must be an eligible investor. To be an eligible investor, you must be qualifying as one or more of the following:

• You meet the FCA’s definition of a professional investor (as per COBS 3.5).

• You meet the FCA’s definition of a certified high net worth investor (as per COBS 4 Annex 2R).

• You meet the FCA’s definition of a certified sophisticated investor (as per COBS 4 Annex 3R).

• You meet the FCA’s definition of a self-certified sophisticated investor (as per COBS 4 Annex 4R).

• You meet the FCA’s definition of a certified restricted investor (as per COBS 4 Annex 5R).

• You are a client of an FCA authorised firm that will provide advice on the suitability of the product in question.

Risk warning

THIS INVESTMENT IS NOT SUITABLE FOR ALL INVESTORS AS THE UNDERLYING INVESTMENTS ARE ILLIQUID.

This financial promotion has been approved by Sapphire Capital Partners LLP (FRN: 565716) on 20 May 2024.

Important information for private investors – Reliance on the information provided here to engage in any investment activity may expose an individual to a significant risk of losing all of the property or other assets invested. Your attention is drawn to the risk section contained within the Information Memorandum. Investments are typically in unquoted shares in small companies, the value of which can be volatile and are often difficult to sell. Nothing on this website constitutes investment, tax, financial, legal, regulatory, or other advice by Sapphire Capital Partners LLP.

The value of an investment may go down as well as up, and you may not get back the full amount invested, and you may therefore lose some or all of your investment.

If you are unsure of the suitability of any investment for your circumstances, please contact your independent financial advisor or other professional advisor authorised under the Financial Services and Markets Act 2000 (FSMA) who specialises in advising on investments of this type. Tax reliefs depend on individual circumstances. There is no guarantee however that the tax reliefs (such as SEIS and/or EIS reliefs, CGT reliefs or IHT relief) will be available on any investment made or that if it is initially available, it will not be subsequently withdrawn. Any references to tax laws or rates are based on current legislation, all of which are subject to change and are provided as a guide only. Prospective investors are advised to obtain their own investment and taxation advice and should consult their own professional advisors on the implications of investing.

Investments made in investee companies via funds managed by Sapphire Capital Partners LLP may not be covered by the Financial Services Compensation Scheme (FSCS). For more details, please contact us or refer to their website: https://www.fscs.org.uk

Past performance is not a guide to future returns. CAPITAL AT RISK.

Technology Transformation EIS Fund

Helping businesses achieve more with technology.

At a glance

Key Information

EIS tax incentives

Fund team

Example companies from the current UCreate portfolio

Explore other investments

Important information

Risk warning

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