Originally written by Lawrence Gosling on Small Business
Many investors think investing in early stage, growth companies is a high risk investment strategy, particularly when compared with the public markets where many of the businesses listed on the London Stock Exchange have decades of trading histories.
But as this pandemic has shown, just because a company is listed on a stock market or has been trading for a long-time, doesn’t make it low risk.
So should private growth companies, many of which has used Seed EIS investment and the follow-on EIS investment be viewed in a different way?
Well two specialist investment groups, Worth Capital and Nova, sometimes known as We Are Nova, believes investors need to think about how they view risk and effectively don’t immediately think Seed EIS equals high risk and large, listed companies equals low risk.
In a short video, the pair discuss how they aim to get diversification within the portfolio of companies they invest in across their Seed EIS funds, and how this can compliment the portfolio investors’ listed investments or other funds, such as investment trusts or unit trusts and open-ended investment companies (Oeics).
“#Startups are taking their place and are growing quickly; They are very nimble and able