The risks below are general risks associated with investing in unlisted securities and this is not intended to be an exhaustive list of all risks. Specific risks for individual investments will be listed on companies’ individual pages.
We recommend that you read the information on the website carefully and that you carry out your own due diligence on the companies. You should only make investments in unlisted shares if you are able to bear the loss of the whole of your investment and as part of a well-diversified portfolio.
Investments are not suitable for all persons and investors will have to satisfy qualification criteria when signing up as a client of an authorised broker.
Early stage companies
Companies using JPJ are at various stages of growth but all are early-stage companies and carry a high risk of failure. Past performance is not guaranteed to continue, the value of your investments may fluctuate and you may get back less than you invested. If you are unsure about the suitability of any investment you should speak to a suitably qualified adviser.
Loss of capital
Early-stage companies carry a high risk of failure, and you should be prepared to lose the whole of your investment.
Although dividends can be paid on shares, early-stage companies usually are not in a position to pay dividends to shareholders and you should not expect to receive an income from your shareholding.
None of the offers available through the platform have a prospectus that has been approved by a regulatory authority.
EIS- no guarantee of ongoing compliance with qualification criteria
Some of the companies may be eligible for EIS relief but there is no guarantee that the company will continue to meet the criteria to qualify for EIS relief. Tax treatments of the products depend on individual circumstances and may be subject to future changes in law. If you are uncertain about the tax treatment of a product you should seek independent tax advice. Neither JPJ nor Prosper offer any tax advice or any guarantee as to the suitability of a product for a particular tax treatment. If you purchase shares which are suitable for EIS relief you will need to hold them for at least 3 years to qualify for the relief.
Risk of dilution
Early-stage companies usually go through several rounds of financing, and it is likely that your shareholding will be diluted by subsequent new issues of shares.
Risks related to foreign issuers
If securities are offered by an issuer in a foreign jurisdiction, or the security is structured through a foreign special-purpose-vehicle, or you purchase securities that are issued by foreign issuers, your investment and continued holding of securities may be subject to the laws and regulations of that jurisdiction. The investment or you yourself may be subject to additional tax liabilities, transaction costs or capital controls under the foreign laws. Any claims or action may need to be raised before foreign courts or authorities. You should be aware that overseas markets may be subject to rules which may offer different or diminished investor protection as to the United Kingdom or any other jurisdiction in which you reside or are domiciled.
Different costs involved
Each purchase of securities issued by foreign issuers, may be subject to additional tax liabilities, transaction costs, duties, charges or capital controls under the foreign laws. Before each purchase of securities issued by foreign issuers, all fees and other charges for which you may be liable should be made clear to you by your stockbroker or financial advisor as such charges may affect your net profit (if any) or increase your loss on the investment made.
You should be aware that the securities may be denominated in currencies different from the currency of your home country. In all these cases, your investment return will be affected by exchange rate fluctuations and you will therefore be exposed to foreign currency risk. Currencies depreciate or appreciate in value against each other and this may correspondingly reduce or increase the value of your investment in foreign currency terms. Your payment service provider may also charge fees for converting funds into foreign currency or for making payments in foreign currencies.
Although certain investments trade via a matched buyer/seller mechanism on the Platform, there is no assurance that price formation will occur or active trading on the same matched buyer/seller basis will be sustained, or that any market for the investments will develop. There may be difficulty in trading an investment caused by a number of factors, including, but not limited to, lack of demand or supply, and volatile and unpredictable price movements in investments displayed via the Platform. In these circumstances, you may not be able to sell your investments in a timely manner or at the expected price level. Matching of trades can be halted or suspended due to several reasons, including technical problems, regulatory intervention and unclear or delayed disclosure by issuers. Hence, it may be difficult or even impossible for you to cash in on or exit such investments.