What are the risks of EIS?

Investing in small, growth companies (the type that tend to qualify for EIS) always carries risks. These risks include:

• Partial or total loss of capital
• Illiquidity - i.e. the inability to sell your shares quickly or without a substantial loss in value
• No dividends paid to shareholders
• Share dilution - or the reduction in value of your shares because more shares are issued

The benefits of The Enterprise Investment Scheme (EIS) help mitigate some of these risks by providing up to 30% tax relief, plus a potentialreduction in your net losses, through loss relief.