As with all investments, our products place capital at risk. Investors may not get back the full amount invested. Our products invest in unlisted or smaller company shares which are likely to have higher volatility and liquidity risks than quoted shares. Any reference made to past performance or forecast performance of our products is not a reliable indicator of future results.

Any tax reliefs referred to may be subject to change and tax treatment will depend on the individual circumstances of the investor. EW Cap Limited (“EW Cap”) does not provide investment or tax advice, and information on this website should not be construed as such. Potential investors should seek specialist independent tax and financial advice before investing. Nothing on this website constitutes an offer, or invitation to treat, or inducement for you to engage in any investment activity.

Bonds / IFISA risks

Your personal decision to invest

A decision to invest in a company is a personal decision by you and no responsibility for the consequences of that decision is accepted by EW Cap or by any of its partners, directors, agents, employees or other members. To invest in any of our products you need to understand the following important risks:

You may not be covered by the Financial Services Compensation Scheme

The Financial Services Compensation Scheme (FSCS) does not provide protection against the risks of investing in Earthworm bonds that are open for investment from time to time. It does, however, apply to funds held in the client money account prior to investment in such bonds or once the proceeds of that investment are returned from the borrower. The client money account is held by Goji Financial Services at the Starling Bank.

EW Cap is authorised and regulated by the FCA and is responsible for arranging and promoting the bonds. Under the FSCS there may be circumstances in which investors can claim up to £85,000 of compensation where EW Cap is unable or unlikely to honour legally enforceable obligations against it (e.g. claims for fraud or misrepresentation).

However, investors will not be able to claim under the FSCS simply because a bond fails to repay capital or pay interest. Click here for more details on the FSCS and its eligibility criteria.

Capital is at risk and returns not guaranteed

Bonds are investments not deposits and investors’ capital is at risk. EW Cap will seek to minimise risks but you should be aware that returns are not guaranteed and you may not get back the amount invested.

Liquidity

You should be aware that no established market exists for the trading of bonds in private companies (such as the companies listed on our platform), and such bonds are not easily realisable. There could be difficulty in selling such investments at a reasonable price and, in some circumstances, it may be difficult to sell them at all. You should only invest if you are prepared to hold your bonds for the full length of their term.

Diversify your portfolio

It is important to maintain a balanced portfolio and not concentrate too much of your invested wealth in any one company or product. Diversification (by spreading your money across different types of investments) should help to reduce your overall risk. You should only invest a proportion of your available investment funds via the platform due to the high risks involved.

Tax

We recommend that you take your own tax advice on any investments which you make via the platform. The information regarding taxation contained in our offer documentation and on this website is subject at any time to change and the personal circumstances of investors.

Recommendation

We do not provide investment, legal or tax advice or make personal recommendations. If you are in any doubt about the action you should take or the contents of a particular offer document or product brochure, you should seek advice from a financial adviser authorised under the Financial Services and Markets Act 2000.

Past performance

Past performance is not a reliable indicator of future performance. You should not rely on any past performance as a guarantee of future investment performance.

EIS risks

The key risks of investing in an EIS Fund

EIS Funds make higher risk, long-term investments in early-stage companies and will not be suitable for all investors. Investee companies are unlisted and their shares are accordingly illiquid. Smaller companies often have limited product lines, markets and financial resources and face a greater risk of insolvency leading to loss of shareholder value.

We do not offer advice on our products and we recommend that you speak to an independent financial adviser with experience of advising on unquoted investments before taking any investment decision.

Tax risk

EIS is one of the UK Government’s tax advantaged venture capital schemes that is used by small or medium-sized companies to raise funds, by providing tax reliefs for investors.

The tax reliefs available under the EIS are subject to change and tax treatment will depend on the individual circumstances of the investor. If an investee company fails to maintain its EIS qualifying status, investors may be subject to clawback of initial income tax relief received and other reliefs may cease to apply.

Capital risk

Investment values may go down as well as up. You may not get back the full amount your invested. This Investment offers no capital protection against market risk and therefore you can lose all the capital.

If one or more of our investee companies fail, investors may be able to claim share loss relief against income or capital gains. EW Cap will provide investors and advisers with the necessary information to help with any loss relief applications in such circumstances.

Timing of investments

We cannot guarantee that investments will be made within specific timetables or within a particular tax year. Certificates allowing investors to claim their relief will only be dispatched once underlying investments are made by the Fund and the relevant forms processed by HMRC which may take considerable time.

Whilst we target a spread of at least three investee companies in each investor’s portfolio, this cannot be guaranteed and so the level of diversification achieved by the Fund may be limited.

Term risk

Investments in EIS Funds are long-term in nature. In order to retain initial tax relief received on making an EIS investment, you must hold you shares for at least three years from the date of their issue or, if later, the date on which the investee company commenced trading. However, you should expect to hold your investment for longer than this in most cases before a liquidity event occurs.

You should always consult an independent financial adviser before committing to tie up your capital in an illiquid investment product.

Past performance

The past performance of Earthworm investee companies or of EW Cap itself is not a reliable indicator of the future performance of an investment.

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