Oxford capital eis fund
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When AI just works

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I’m awful at taking photos. Everything in my camera roll is out of focus, blurry or has my finger over the lens. I’ve recently been using the Prisma app and it is great at turning my dreary photography into fantastic looking art. When I searched for more information on Prisma, at first I was confronted by a haze of standard photo app reviews. But dive past that and there’s a really interesting AI story under the hood.
The Prisma app isn’t like Instagram, which layers a filter over the photo you took. Instead it uses neural networks and deep learning to extract the style of a painting and combine it with your photograph to create a new image. All the processing is done in the cloud, and the wait time is impressively short.
But as a consumer, what grabbed my attention wasn’t the novelty or cutting edge nature of the technology, but the quality of the product and user experience. It’s one of those apps that just works.
It’s great to see examples of AI being deployed where the user experience is so good that you’d never realise how much tech is going on behind the scenes.

Estimated reading time: 2 min

 

Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be high risk.

What are the key risks?

  1. You could lose all the money you invest
    1. If the business you invest in fails, you are likely to lose 100% of the money you invested. Most start-up businesses fail.
  2. You are unlikely to be protected if something goes wrong
    1. Protection from the Financial Services Compensation Scheme (FSCS), in relation to claims against failed regulated firms, does not cover poor investment performance. Try the FSCS investment protection checker here.
    2. Protection from the Financial Ombudsman Service (FOS) does not cover poor investment performance. If you have a complaint against an FCA-regulated firm, FOS may be able to consider it. Learn more about FOS protection here.
  3. You won’t get your money back quickly
    1. Even if the business you invest in is successful, it may take several years to get your money back. You are unlikely to be able to sell your investment early.
    2. The most likely way to get your money back is if the business is bought by another business or lists its shares on an exchange such as the London Stock Exchange. These events are not common.
    3. If you are investing in a start-up business, you should not expect to get your money back through dividends. Start-up businesses rarely pay these.
  4. Don’t put all your eggs in one basket
    1. Putting all your money into a single business or type of investment for example, is risky. Spreading your money across different investments makes you less dependent on any one to do well.
    2. A good rule of thumb is not to invest more than 10% of your money in high-risk investments. https://www.fca.org.uk/investsmart/5-questions-ask-you-invest
  5. The value of your investment can be reduced
    1. The percentage of the business that you own will decrease if the business issues more shares. This could mean that the value of your investment reduces, depending on how much the business grows. Most start-up businesses issue multiple rounds of shares.
    2. These new shares could have additional rights that your shares don’t have, such as the right to receive a fixed dividend, which could further reduce your chances of getting a return on your investment.

 

If you are interested in learning more about how to protect yourself, visit the FCA’s website here.