Do you know how much risk you are prepared to tolerate when you invest? This is the question that lies at the heart of investment planning – and very often the discussions about risk take the longest. The basic investment choice is between the following asset classes:
Cash deposits in banks and building societies.
Fixed interest securities – effectively loans to the government or businesses.
Property – commercial or residential (very different from each other).
Equities – shares in companies listed on stock exchanges.
These are the building blocks of investment portfolios. Your risk profile – how much risk you can and should be prepared to take on – will help determine the appropriate mix of these basic components in your portfolio, usually called the asset allocation. There are several other factors to consider such as how investments are taxed, and the choice of fund managers and institutions, which can make a substantial difference to your returns, but asset allocation is almost certainly the key decision.
Venture Capital
Venture capital remains an important source of funding for entrepreneurial start-ups and young, growing companies and has a number of advantages over other types of investment.
We can structure venture capital finance with no ongoing repayments, investing income back into the business, allowing it to grow more quickly. While the investor will take an equity stake, you will retain control of your business and can benefit from the expertise and support that experienced venture capital investors bring.