Note: Last updated: August, 2023
What are the key risks?
You could lose all the money you invest
- Most investments made by venture capital funds are shares in start-up businesses. Investors in these shares often lose all of the money they invested, as most start-up businesses fail.
- Checks on the businesses your fund will invest in on your behalf, such as how well the businesses are expected to perform, are not carried out by Old Street Ventures. These checks are performed by funds and you should therefore do your own research to ensure you are comfortable with the funds in our portfolio before investing.
You won't necessarily get your money back quickly
- Old Street Ventures funds have an initial 1-year lockup period. This means that every time you invest money, the soonest time you can withdraw it is 1 year from that investment date. This is a measure to both protect the fund and all the investors participating in it. Venture capital investing is a long-term strategy and frequent short term redemptions can create potentially unmanageable capital commitments.
- Even if a business your fund invests in is successful, it may likely take several years for the funds to return to Old Street Ventures. Despite our efforts to provide liquidity, in certain situations or difficult market conditions, you may not get your money back.
- Old Street Ventures funds, and the underlying venture capital funds our own funds invest in, do not pay out dividends. You should not expect to get your money back this way.
- Withdrawals require a minimum of 90 days notice as per FCA rules for our chosen fund structure. You should not expect to be able to withdraw your money at any time before the next dealing day following your 90 day notice period.
- In the case where a large portion of investors choose to withdraw money simultaneously, the fund manager may elect to temporarily pause withdrawals to prevent being forced into a fire sale of assets. While we implement several layers of liquidity management to prevent these situations from occurring, you should know that this remains a possibility.
Don't put all your eggs in one basket
- Spreading your money across different investments makes you less dependent on any one to do well. Old Street Ventures has based its business model on this philosophy, but you should follow it within your own portfolio too.
- A good rule of thumb is not to invest more than 10% of your money in high-risk investments.
The value of your investment can be reduced
- Venture capital funds typically invest in company shares. The percentage of a particular business that you own via our funds will decrease if the relevant business issues more shares. This could mean that the value of your investment reduces, if a company were to issue a large number of shares without an appropriate increase in valuation.
- These new shares could have additional rights that existing investors 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.
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.
- Protection from the Financial Ombudsman Service (FOS) does not cover poor investment performance. If you have a complaint against an FCA-regulated company or platform, FOS may be able to consider it. Learn more about FOS protection here.
If you are interested in learning more about how to protect yourself, visit the FCA's website here.