Potential investors should be aware that investing is speculative and involves a high degree of risk, including the risk of loss of capital, lack of dividends, dilution and very limited liquidity. Therefore, investing should be made only by those who understand and are willing to assume the risks involved and only as part of a diversified investment portfolio. An investor may get back less than the amount invested. Information on past performance, where given, is not necessarily a guide to future performance.

To help you understand the risks involved when investing in a business displayed on the platform, please read the following risk summary.

1. No advice

Regionally does not provide advice to investors and the information on the Regionally platform should not be construed as such. Any information which appears on our platform is purely for information purposes and does not constitute specific advice. Regionally does not make any recommendations on investments and does not make any comments on investor’s suitability. If you are in doubt as to the suitability of an investment, you should seek independent professional advice before going further.

2. Diversification

Diversification is a fundamental part of investing. If you decide to invest in any businesses displayed on the Regionally platform, such investments should only be made as part of a diversified investment portfolio. Investors should spread their investments between multiple businesses rather than investing a larger amount in just a few. Investors should only invest a proportion of their available investment funds via Regionally and balance this out by investing the majority of their investment capital in safer, more liquid assets.

3. Loss of capital

Investment through Regionally involves investing in small and medium sized businesses which may involve significant risk as many of these businesses fail or do not grow as planned. It is likely that you may lose all, or part, of your investment. Therefore, you should not invest more money in the businesses displayed on the Regionally platform than you can afford to lose without having to adjust your living conditions. If a business you invest in fails, neither the company nor Regionally will pay you back your investment.

4. Lack of liquidity

Liquidity can be defined as the ease with which an investment can be bought or sold after you have purchased them. Shares in small and medium sized businesses cannot easily be sold and it is very unlikely that a liquid secondary market for the shares of the business will exist. This means that you are unlikely to be able to sell your shares until and unless the investee company floats on a stock market or securities exchange or is bought by another company. For businesses for which secondary market opportunities are available (including any available on the Regionally platform), it can be difficult to find a buyer or seller, and investors should not assume that an early exit will be available just because a secondary market exists.

5. Lack of dividends

Dividends can be defined as payments made by a business to its shareholders from the company’s profits. Small and medium sized businesses displayed on the Regionally platform may not be able to pay dividends. This means even if a business you invest in through the Regionally platform is successful and grows considerably, you are unlikely to see a return on your investment until you are able to sell your shares. Even for a prosperous business, this is unlikely to occur for a number of years from the time your investment has been made.

6. Dilution

Dilution occurs when a company issues more shares that result in a decrease in existing shareholders’ ownership percentage of that company. Any investment in shares made through Regionally may be subject to dilution in the future if the business raises additional capital at a later date. It may issue new shares in the company to new investors which will result in a decline of the percentage of the company that you own. This will have an effect on a number of things, including voting, dividends and value. Your investment may also be subject to dilution as a result of the grant of options (or similar rights to acquire shares) to employees of, service providers to, or certain other connections of the business.

7. Taxation

Regionally does not provide any financial or tax advice to any person and you should always consult a financial expert or taxation specialist to fully understand the possible effects of investing in a business on the Regionally platform. Tax reliefs are not guaranteed, depend on the entities invested in maintaining their qualifying status, and may be withdrawn at any time by HM Revenue & Customs. The tax treatment of EIS and SEIS schemes depends on the individual circumstances of each client/investor and may be subject to change in the future.