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 SeedingVR LTD ("SeedingVR") or by any of its directors, agents, employees or other members.
To invest through SeedingVR you need to understand the following important risks:
Losing all of your investment
Investment, whether in new or existing businesses, carries high risks as well as the possibility of high rewards. Accordingly each investor should consider very carefully whether such investments are suitable in the light of personal circumstances and commitments and the financial resources available to each Investor. SeedingVR does not promise any return on investment nor that the value of any investment will be maintained. Engaging in any investment activity may expose you to a significant risk of losing all of your investment.
Most of the investee companies which are listed on SeedingVR are new companies with limited if any track record. These companies will provide information such as their business plan and financial forecasts. Please be warned that these documents are not guarantees that the relevant company can achieve what it is hoping to do. Equally the information provided may state certain facts and statements, and again please be warned that SeedingVR is not responsible for checking the accuracy of these facts and statements (which may not always prove to be true or complete).
If a company you invest in fails, neither the company – nor SeedingVR – will pay back your investment.
No established market – lack of liquidity
As an investor you should be aware that no established market exists for the trading of shares in private companies (which the companies that are listed on the SeedingVR Website are), and such shares are not easily realisable. It must be appreciated that there could be difficulty in selling such investments at a reasonable price and, in some circumstances, it may be difficult to sell them at any price.
Lack of dividends
The companies pitching on SeedingVR are early stage companies, and these companies will rarely pay dividends to their investors. This means that you are unlikely to see a return on your investment until you are able to sell your shares or the company grows significantly. Profits are generally re-invested into the company to fund growth. Companies have no obligation to pay shareholder dividends.
All companies who pitch through SeedingVR offer Ordinary Equity Shares. Dilution will occur during future investment rounds should you not buy any of the new shares being issued. As a result an existing shareholder's proportionate shareholding of the company is reduced, or ‘diluted’. This has an effect on a number of things, including voting, dividends and value of shareholdings.
The need for diversification
Diversification by spreading your money across multiple investments will reduce risk. Investors should only invest a proportion of their available investment funds via SeedingVR due to the high risks involved.
Conflicts of Interest
Conflicts of interest may arise when professional interests conflict with personal interests. Conflicts of interest are not necessarily unethical nor may they always result in financial loss. However, in the interests of transparency, SeedingVR have processes in place to identify, manage and - where necessary - prevent actual and potential conflicts between us, our Investors and VR Companies (together, our “clients”).
The overall responsibility for identifying, escalating and managing conflicts of interest rests with the senior management of SeedingVR. If senior management concludes that there is a conflict of interest (or the possibility of such an conflict) which has or could adversely affect a client, the senior manager responsible will investigate and notify the client within 5 working days. A record of all conflicts of interest identified is maintained and regularly reviewed by the SeedingVR Board of Directors.
The potential for conflict between SeedingVR and our clients is low but may arise in one of the following situations where SeedingVR, an employee of SeedingVR or a representative of SeedingVR:
a) makes a financial gain (or limits / avoids a financial loss) at the expense of a client;
b) has an interest in the outcome of a service provided by SeedingVR to a client;
c) has an incentive (financial or otherwise) to favour the interest of one client over other clients; or
d) receives an inducement in relation to a service provided to the client.
The above list is non-exhaustive.
SeedingVR treats situations which give rise to a perception of a conflict of interest as if they were actual conflicts of interest.
Tax reliefs and savings may not materialise
SeedingVR does not guarantee that Enterprise Investment Scheme ("EIS") tax relief, SEED EIS tax relief or any other type of tax relief shall apply in respect of any investments made by you as an investor in companies via the SeedingVR Website. SeedingVR recommends that you take your own tax advice on any investments which you make via the SeedingVR Website.
SeedingVR does not make personal recommendations and does not promise that a particular investment will be suitable for the individual circumstances of an investor.
Please note that just because a company has obtained an advance clearance from HMRC to confirm that it is for example an EIS qualifying company, it must be noted that the company can subsequently lose this status if it does not spend the investment in a prescribed way or it changes its business or share structure in a way which is contrary to the relevant tax rules. Furthermore if the investee company goes to a successful exit event within three years (which you may have no control over) then the benefits of EIS tax relief will not apply. If the investee company is required by a majority of its investors to enter into a shareholders’ agreement (using the form prescribed by SeedingVR) then there are standard provisions to help ensure that any tax relief is maintained but it should be noted that this cannot be guaranteed as a complete safeguard in itself.