Legal
Risk Factors
A detailed summary of the principal risks of investing in early-stage private companies.
Last updated 1 January 2026
1. Loss of capital
Early-stage companies fail at a high rate. You should be prepared to lose the entire amount invested and should only commit capital you can afford to lose.
2. Illiquidity and long holding periods
Shares in private companies are not traded on any exchange. There is normally no way to sell or transfer your holding, and any return typically depends on an acquisition or listing that may take many years or never occur.
3. Dilution and preferential rights
Follow-on financing rounds will usually dilute your ownership. New investors may receive liquidation preferences, anti-dilution protection or other rights that rank ahead of your position.
4. Concentration risk
Investing in a small number of companies materially increases risk. Venture exposure should represent only a modest portion of a diversified portfolio.
5. Valuation uncertainty
Private company valuations are negotiated, not market-determined. Reported valuations may not reflect realisable value and can be written down substantially.
6. Reliance on founders and key people
Outcomes depend heavily on a small founding team. The departure, underperformance or dispute of a key individual can materially damage a company's prospects.
7. Execution, market and competitive risk
Companies may fail to achieve product-market fit, may be outcompeted by better-funded rivals, or may be affected by shifts in customer demand, technology or macroeconomic conditions.
8. Information asymmetry
Disclosure by private companies is limited and unaudited in many cases. You may not receive timely or complete information about performance after investing.
9. Regulatory, tax and cross-border risk
Portfolio companies operate across several jurisdictions in Southeast Asia and beyond. Changes in law, licensing, taxation, capital controls or foreign exchange rates may reduce returns.
10. Structure and vehicle risk
Investments may be made through special purpose vehicles or nominee structures. Fees, expenses, administration and the actions of other participants in the vehicle may affect your net outcome and your ability to act independently.