The dream investment must surely be the initial funding round of a "tech unicorn" – a technology company that grows to be valued by investors at over a billion US dollars. However, the clue is in the name; these elusive beasts are rare indeed. So is there any realistic possibility of an average person tracking one down and investing?

It is certainly unlikely. In addition to the low probability of identifying a potential unicorn, there are also protections for investors which make it difficult for start-up companies to offer their shares for sale to the general public. Traditionally, this has resulted in funding primarily from venture capitalists, business angels and, more latterly, private equity houses. Private equity investment is typically limited to high-net worth individuals, banks, pension funds and other institutional investors.

Investing in retail tech funds is an option for an average investor, thereby gaining the direct benefit of an investment manager's expertise and indirect exposure to a basket of potential "multibaggers". However, this approach also has its downsides. The investment also has to bear the cost of a regulated fund structure. In addition, the very nature of a retail fund structure with a requirement for high levels of liquidity is fundamentally at odds with the idea of investing in early stage, high-growth, difficult to value investments.

So, given the challenges facing the average would-be investor, has technology also provided the solution to early-stage investing?

Crowdfunding is a relatively recent innovation whereby equity in a business is offered to the public via an online platform and participants typically invest relatively small amounts of cash. However, whilst these platforms do occasionally provide the potential for outside returns, the due diligence on new ventures can be very limited, and there is also the risk of identity theft and fraud. It is arguable that some of the most effective crowdfunding innovations have actually been those where the participants themselves have a personal or vested interest in the project, or which have a reward-based outcome rather than financial gain. For example, Kickstarter turns 10 years old this year and has found success with its combination of reward-based returns with an altruistic flavour.

The initial coin offering or ICO is another innovation which can be viewed as an attempt to democratise the way in which an average investor can invest in tech start-ups. A company looking to create a new coin, application or service will launch an ICO which can cover a multitude of concepts and evolve from the offerings of decentralised virtual currencies such as Bitcoin.

ICOs can offer outsize returns but carry significant risks. Their decentralised nature makes it difficult to comply with applicable anti-money laundering and countering the financing of terrorism (AML/CFT) legislation. They are also vulnerable to speculation, volatility, fraud and theft.

In Guernsey, the Guernsey Financial Services Commission (GFSC) promotes the highest standards of compliance and probity and has sounded a note of caution in relation to virtual currencies and ICOs. Along with a number of other regulators, it has noted the risks associated with some offerings, in particular those targeted at retail investors. Whilst the GFSC remains committed to innovation, it has concerns in relation to exchanges, volatility and the secondary market for coins.

This is consistent with the position adopted by a number of other regulators and reflects the focus on protecting investors and on AML/CFT risk. That said, for those able to demonstrate that appropriate controls are in place, the GFSC has indicated that the door is open.

All in all, whilst technology and the internet can assist in the creation and promotion of a new project or idea, facilitate the transfer of data to assist with due diligence, and provide seamless new ways of value transfer, the fundamental tensions will always still exist between risk and reward, and investor protection and opportunity.

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