Full disclaimer
Skyline Angels Connect does not offer investment advice to individual investors, their associated groups or the individual businesses seeking investment. This type of investment activity may expose an individual to a significant risk of losing all of the property or other assets invested. The communication with Skyline Angels Connect should be reviewed only by parties who are (i) Certified High Net Worth individuals, (ii) Certified or Self-certified Sophisticated Investors, (iii) High Net Worth Persons. All correspondents with Skyline Angels Connect should not under any circumstances be read by or distributed to any party other than the Authorised Recipients. We strongly recommend that you seek independent and qualified advice, as we are unable to offer you this service due to Skyline Angels Connect not being regulated by the Financial Conduct Authority (FCA).
Skyline Angels Connect accepts no responsibility or liability for the information/forecasts/opinions/drawings/statements or any form of communication provided by the businesses. Whether this be through face-to-face pitches, or any other form of communication. This information is explicitly the responsibility of the business concerned.
Risk Warning
Choosing to invest in a company that has provided information through Skyline Angels Connect is done so at your own volition and without reliance on any information from Skyline Angels Connect. This is regardless of whether it is a pitching event or through any other communication or correspondence. Such a decision should be solely based on the information provided by the relevant business. If you are unsure or have any doubts to any aspects of the information provided, you should seek advice from an independent financial adviser.
Investing in small private or publically listed companies involves risks, including illiquidity, loss of investment, lack of dividends and dilution, and it should only be done as part of a diversified portfolio. Skyline Angels Connect exclusively targets investors who are sufficiently sophisticated to understand these risks and make their own investment decisions. You will only be able to consider investing via Skyline Angels Connect upon registering as a High Net Worth individual or as a sophisticated investor.
Loss of capital
A considerable number of Small Businesses fail, and if you choose to invest in a business that has been introduced to you by Skyline Angels Connect it is possible that you will lose your invested capital. You should not invest more money than you can afford to lose without altering your standard of living.
Limited illiquidity
Investments in Small Companies via Skyline Angels Connect should be considered as highly illiquid. It is very unlikely that there will be a secondary market for such shares and one is not expected to develop. This means that you are highly unlikely to be able to sell your shares until, and unless, the Investee Company floats on a securities exchange or is bought by another company. Such an eventuality is unlikely to occur for a number of years from the time of your investment. There are no guarantees that the Investee Company will be able to make repayment of a Convertible Loan Note and interest on the due-date if this is your chosen investment structure.
Investment risk
Any potential investor needs to appreciate that an investment via Skyline Angels Connect is subject to market fluctuations and there can be no assurance that any appreciation in value will occur. It should be appreciated that both the value and the income from investments can fluctuate and may decrease. There is no certainty that an investor will get back any part of their investment and should further appreciate that their interests are unsecured and rank subordinate to the interests of all creditors. In the event that a company becomes unable to meet its debts as they fall due, investors may receive less than their original investment. The price which investors may receive for their investments and the timing of any such realisation may be influenced by a large number of factors. Some of these are specific to the investment and others of which are extraneous. The ability of an investor to sell shares will depend on there being a willing buyer for such shares at an acceptable price.
Rarity of dividends
Small companies rarely pay dividends. This means that if you invest in a business via Skyline Angels Connect, even if it is successful, you will be unlikely to see any return of capital or profit until you are able to sell the shares in the investee company. This is unlikely to occur for several years after you have made your investment.
Dilution
Any investment you make via Skyline Angels Connect may be subject to dilution. This means that if the business raises additional capital at a later date, it will issue new shares in the investee company to the new investors, thus the percentage of the investee company that you own will reduce. These new shares may also have certain preferential rights to dividends, sale proceeds and other matters, and the exercise of these rights may work to your disadvantage. 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 parties connected with, the investee company.
Lack of operating history
Many of the investee companies are likely to be recently formed entities and have no substantive operating history upon which prospective investors can evaluate likely performance.
Diversification
It is generally expected that investing in startups should only be considered as part of a diversified portfolio. This theory suggests that you should invest relatively small amounts in multiple businesses rather than a lot in one or two businesses. It also suggests that you should invest only a small proportion of your investable capital in startups as an asset class, with the majority of your investable capital invested in safer, more liquid assets. This is a specialist area and you should seek advice from an independent financial adviser.
Dependence on directors
The success of many investee companies coming via Skyline Angels Connect will depend in part upon the ability of their directors to develop and maintain a strategy that achieves the company’s investment goals.
Tax treatment of shares
Tax reliefs are not guaranteed, this depends on the entities maintaining their qualifying status, which 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. Advance EIS and SEIS clearance from HMRC are not a guarantee that an investor will receive the indicated tax relief.
Financial services compensation scheme
Investors will not be able to claim under the Financial Services Compensation Scheme merely because an investee company introduced via Skyline Angels Connect, fails. Details of the Financial Services Compensation Scheme may be found at www.fscs.org.uk
This list of risk factors does not purport to be a complete enumeration or explanation of the risks involved. Prospective investors should read the relevant investee companies’ pitch documents they have received in their entirety and consult with their own advisers before deciding whether to invest, or not.