I realise the title is a little provocative, but I was having a discussion with a friend recently who eschewed these kinds of government schemes in favour of more traditional investments. (And they weren't risk averse, this was loseable money that they wanted to maximise potential return on)

My point was: for UK-based investors with small pots of money, these schemes basically give you free money (if you only invest up to the limits for tax relief). While, yes, they are much riskier in terms of company sucess/failure, the scheme negates most of the real risk and removes taxation on the rewards. The government is basically hedging your bets.