The Future is Now | GBI 18 | February 2020 by Clifton Media Lab

FOR PROFESSIONAL INVESTMENT SPECIALISTS

M AGAZINE

THE FUTURE IS NOW GB Investment Magazine Â· Dec|Jan 2018 1 GOVERNMENT BACKED - GREAT BRITISH INVESTMENTS - EIS - SEIS - BR - SITR - VCT

INVESTING IN THE FUTURE With over 200 years of combined experience, Deepbridge only operate in the sectors in which the team has in-depth experience; technology, life sciences and renewable energy; which allows us to appreciate where, how and why our investee companies operate, giving us a better understanding of how to support, mentor and manage those businesses.

Deepbridge Technology Growth EIS*

Deepbridge Life Sciences EIS*

Deepbridge Inheritance Tax Service*

Invests in technology companies with the potential for significant capital growth. Offering a diversified approach across energy and resource innovation, medical technology and specialist IT solutions sectors.

Invests in a portfolio of healthcare innovations, targeting significant capital growth, operating in the biotechnology, pharmaceutical and medical technology industries.

The Deepbridge Inheritance Tax Service is an investment management service that invests in asset-backed renewable energy opportunities, targeting a 6% yield p.a.

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* Risk warning – Tax treatment depends on the individual circumstances of each Investor and may be subject to change in future. The availability of tax reliefs depends on the Company maintaining its qualifying status. Investments in unquoted companies carries high risks. The underlying investments of these propositions are both illiquid and high risk, not suitable for all investors and investors should not consider investing unless they can afford the full loss of their investment. No established market exists for the trading of shares in private companies, making it difficult to sell shares. This document is a financial promotion for the purposes of section 21 of the Financial Services and Markets Act 2000 and has been approved by Enterprise Investment Partners LLP. Deepbridge Advisers Limited is a subsidiary of Deepbridge Capital LLP (FRN: 563366). Interested Investors should seek independent advice before considering investing. This document does not constitute financial, tax or investment advice. Applications are only accepted on the basis of suitability and qualification criteria. Please refer to the full disclaimer and risk section in the respective Information Memorandum for further details. Past performance is not a reliable indicator of future performance. In relation to regulated business for retail clients, Deepbridge Advisers Limited (FRN:609786) is an Appointed Representative of Enterprise Investment Partners LLP “EIP” (FRN: 604439) which is authorised and regulated by the Financial Conduct Authority.

460473691/0220/01

01244 746000 www.deepbridgecapital.com

CONTENTS

CHAPTER • 1 4 - 9 News

A round up of industry news

CHAPTER • 2 10 - 13 Seed EIS

3 case studies from Nova, Jenson and Amersham

CHAPTER • 3

15 - 20 New Entrants

5 newcomer funds introduce themselves to GBI Magazine

22 - 31 EIS Round Table, London

When the advisers met the providers; contrasting perspectives on EIS and how investment specialists could understand each other and work together better

CHAPTER • 4 32 - 46 Open Offers

Our listing of what’s currently available for subscription

Disclaimer

performance is no guarantee of future performance. The value of shares in any investee companies may go down as well as up and investors may not get back the full amount invested. Investors should not consider investing unless they can afford a total loss of their investment. Investments in unquoted shares carry higher risks than investments in quoted shares and involve a degree of risk as well as the opportunity of reward. It may be difficult to sell or realise the investment or obtain reliable information about its value. Any tax reliefs referred to in this publication are those currently applying or expected to apply. However, readers should be aware that tax reliefs and legislation can change. Their applicability and value will depend upon the individual circumstances of a given investor. Whilst the investments set out within may qualify for EIS and other tax advantageous breaks, there is no guarantee that EIS status or other tax efficient status can be maintained throughout the life of the investment. Both investee companies and investors need to comply with the requirements of the EIS legislation in order to maintain EIS Relief and non-compliance may result in the loss or partial claw-back of EIS Relief and potential interest penalties. The material in this yearbook is not to be regarded as an offer or invitation to buy or sell an investment, nor does it solicit any such offer or invitation, nor does it seek to endorse any particular investment product. Any information it contains is given in good faith, but no reliance should be placed upon the same. Applications to invest in any investment product referred to within should be made to the relevant promoter. GBI Magazine neither endorses any particular member, product or company/firm wishing to raise money under the EIS nor does it accept any liability for advice given. GBI Magazine is published by and a trademark of IFA Magazine Publications Ltd, Arcade Chambers, 8 King’s Road, Bristol BS8 4AB, Telephone 01173 258328 @2018 all rights reserved.

GBI Magazine is for professional advisers only. All material has been carefully check for accuracy but no responsibility can be accepted for inaccuracies. Wherever appropriate independent research and where necessary legal advice should be sought before acting on any information contained in this publication. The information and offers contained in this yearbook may not be suitable for all investors. Readers should be sufficiently aware of the risks and ensure that they are of a suitable category as defined by the Financial Services and Markets Act to review and invest in any of the potential offers or funds. The information given in this publication is not to be construed as advice relating to legal, taxation or investment matters. The information contained in this yearbook does not constitute or form part of any offer to issue or sell, or any solicitation of an offer to subscribe or purchase any investment, nor shall it or the fact of its distribution form the basis of, or be relied on in connection with any contract. This yearbook is aimed at UK Investors and is not aimed at persons who are residents of any other country, including the United States of America and South Africa where the funds referred to herein are not registered or approved for marketing and/or sale and where the dissemination of information on the funds or services is not permitted. The information provided in the yearbook is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution, publication or use would be contrary to local law or regulation. The information contained herein may not be reproduced, distributed or published by any recipient for any purpose without the prior written consent of GBI Magazine. No representation, warranty, or undertaking, express or limited, is given as to the accuracy or completeness of the information or opinions contained in this publication. As such, no reliance may be placed for any purpose on the information and opinions set out within it. Past

GBI Magazine is published by IFA Magazine Publications Ltd, Arcade Chambers, 8 Kings Road, Bristol BS8 4AB

M AGAZINE

Telephone: +44 (0) 1179 089686

Commissioning Editor: Michelle McGagh

Editor-in-Chief: Michael Wilson editor@ifamagazine.com

Publishing director: Alex Sullivan alex.sullivan@ifamagazine.com

City Editor: Neil Martin neil.martin@ifamagazine.com

Design: Becky Oliver

Full subscription details and eligibility criteria are available at www.gbinvestments.co.uk ©2017. All rights reserved. Full subscription details and eligibility criteria are available at www.gbinvestments.co.uk

GBI Magazine is for professional advisers only. GBI Magazine is a trademark of IFA Magazine Publications Limited. No part of this publication may be reproduced or stored in any printed or electronic retrieval system without prior permission. All material has been carefully checked for accuracy, but no responsibility can be accepted for inaccuracies, independent research and where necessary legal advice should be sought before acting on any information contained in this publication.

What do we mean by ‘government backed’? In the interests of clarity, any reference made by GB Investments to the point that EIS, VCTs and similar investments are government backed relates to the government’s general approval of these schemes, indicated by their having granted them highly tax advantaged status. The use of this term does not imply that government would in any way act in the capacity as a guarantor or backer of last resort in connection with such schemes.

Au revoir, adios, auf wiedersehen, ciao...

o that’s it then – after more than 3 years of bickering, wrangling, resignations and recriminations, Brexit is done.

Except it isn’t really; even as we speak there’s idle speculation that we might swop the Square Mile for a fleet of trawlers that will make the Russian navy look puny. Brexit may be done, but it’s a long way from being dusted and thankfully, the UK’s entrepreneurs show few signs of being deterred from their goal of generating wealth, creating jobs and making the world a cleaner, safer, healthier and better place. In GBI 18, you can read what happened when the advisers met the providers; a fascinating Round Table session hosted by Calculus Capital brought the sides together and explored their contrasting perceptions of EIS and how they can work together better. I think it’s fair to say that everybody left the session with a much clearer view of the practicalities and possibilities of the scheme, and a much better understanding of the challenges of identifying suitable investee companies and selling the concept to private clients. We take a look at the Seed Enterprise Investment Scheme (SEIS), the sometimes overlooked, ignored

GB Investment Magazine · February 2020

or simply unknown cousin of the better-established EIS. We present 3 case studies of how the scheme has worked in practice for 3 successful companies and their backers – Sentric Music & Nova, Market Making & Jenson and Smart Plant Systems & Amersham. You’ll also find articles from our website that you have missed over the Christmas period, along with our regular features on New Entrants and Open Offers. I’m sure the next few months will throw up plenty of debate, controversy and drama as our final divorce from Europe gets dragged through the courts, but I’m equally certain that UK plc will come out on the other side as strong as ever. There’s simply too much up and coming talent and too much experience and expertise in Britain for it to be otherwise. Wishing you all the best,

GBI

Alex Alex Sullivan Managing Partner CML | GBI Magazine | IFA Magazine

News

Blackfinch launches Spring Venture Capital Trust

he Group’s first VCT targeting growthstage tech-enabled companies

Blackfinch Group has announced the launch of the Blackfinch Spring VCT, an investment portfolio of technology and technologyenabled companies, which have already raised funding, gained traction and are seeking to accelerate the scale-up process. The Spring VCT will also be a natural follow-on funder for the Blackfinch Ventures EIS Portfolios, which invests in technology-focused companies on the cusp of their growth journey. The Group’s existing businesses, including Blackfinch Ventures and Blackfinch Investments, have been focused on investing through these current EIS portfolios, as well as other tax-efficient solutions including the Adapt IHT and AIM portfolios. The Blackfinch Ventures EIS Portfolios have this year invested in eight investee companies in the technology sector, including those providing property technology, clean technology and consumer wearables. Blackfinch Ventures targets high-growth opportunities, supporting start-ups, early stage and growth stage businesses with technological

potential. The focus is on disruptive businesses, offering products that address real world needs, with the capability to make an impact in global markets. Richard Cook, Founder and CEO of Blackfinch Group, said: “This launch marks a key milestone in our continued growth and will further enhance the product range we offer to advisers and their clients. The Blackfinch Spring VCT will invest in companies operating across multiple sectors. The VCT will focus on its own high-quality deal flow as well as followon funding for the highest performing companies in the Blackfinch Ventures EIS Portfolios. These are innovative new firms at the growth stage of their development, bringing a higher chance of success.” Dr Reuben Wilcock, Ventures Director at Blackfinch, said: “Our Ventures team will carefully select strong, new opportunities from all around the UK, backing some of the country’s most talented founders. The Blackfinch Spring VCT will give clients the chance to diversify their portfolios through exposure to the tech sector. The VCT is targeting dividends of 5% p.a. by 2024; additional benefits will include special dividends through earlier exits and those that exceed projected performance and venture capital tax relief.” GBI

GB Investment Magazine · February 2020

10th VCT & EIS Investor Forum A Blowers-by-Blowers account

aybe the friendliest event of its type I’ve attended in many years, the 10th VCT & EIS Investor Forum at the Leonardo Royal Hotel, Tower Bridge, brought together the movers, the shakers, the hopefuls and the mentors and shuffled them together for a varied and satisfying day. Maybe I shouldn’t have been surprised that Daniel Rodwell, Managing Partner at GrowthInvest, had 3 paper rounds as a youngster and paid other kids to make the deliveries. I wasn’t alone in approaching the address by Rory Stewart, Independent candidate for Mayor of London, with a healthy helping of cynicism and ending up being surprised and impressed. There were debates, presentations, keynote speeches and The Advisor School; there was The Discovery Shop featuring innovative food and drink brands, there was the P2P Lending Zone, and there was a roomful of intriguing exhibitors, from a low-cost, long-haul airline servicing South Asia’s second cities to a charity facilitating income-generating home enterprises in some of the world’s poorest areas. And then there was Blowers. Whether you’re into cricket or not, you’ll have heard the legendary commentator’s avuncular ramblings across your TV and radio stations for many years. It was Henry Blofeld himself who wrapped up the proceedings with 20 minutes of reminiscences, many of which weren’t new to those of us who always have time to listen to anything My Dear Old Thing says, but to hear him deliver them in person was a rare treat.

GB Investment Magazine · February 2020

Leaning on a stick as a result of falling down 21 concrete steps at Sheffield University the previous weekend, he brought the house down as usual. But afterwards, as he waited for his cab in reception, I was able to tell him an anecdote about himself that he’d never heard before. Back in 1986 I was lucky enough to be in Antigua to see the 5th and final Test of David Gower’s humbling “blackwash” series. Having watched Viv Richards score the (then) fastest ever Test century in 56 balls, the final tea interval arrived, prior to England’s final batting session of a gruelling tour. Strolling round the ground, I bumped into Blowers and the Times cricket correspondent John Woodcock and offered to buy them a drink. Blowers demurred, “never on duty, my dear old thing...”, but I persuaded him. Then we had another. And another. As the bell went for the final session, we drank up and shook hands, with Blowers promising to be “professional to my fingertips, just you listen...” I got back to my seat, plugged in my headphones and sat back to watch and listen. A wicket soon fell. A burly figure in white trotted down the pavilion steps and out into the middle, to the immortal commentary of “And the next Gatting is Batsman...” When I told this tale, Blowers looked at me and said “Did I really say ‘The next Gatting is Batsman’?” I nodded. He guffawed, shook my hand and said “So nice to see you again!” A classy end to a classy day.

GBI

News

Amount invested in VCTs reaches highest level in over a decade £716m last year

CTs being used by HNWs following cuts to pension contributions; amount invested has risen 65% over the last five years.

SHW explains the tapered Annual Allowance was introduced in 2016, reducing the amount someone earning £210,000 can contribute to their pension tax free from £40,000 to just £10,000.

New data released today shows the amount invested in Venture Capital Trusts (VCTs) reached the highest level in over a decade last year at £716m.

“VCTs enable High Net Worths to recycle what they would have contributed to their pension into a fund that offers 30% income tax relief.”

The amount invested has risen from £705m in 2017/18 and £435m five years ago in 2014/15. VCTs are listed investment vehicles that are designed to invest in early-stage companies that meet certain criteria. Following the release of the data, Tim Holmes, Managing Director of Salisbury House Wealth, the leading financial adviser, comments: “High Net Worths have had the amount they can contribute to their pensions cut, so VCTs are being looked at more closely.” “Quite a few individuals have been hit by the tax on over-contributing to their pension and will not want to make the same mistake again. Other than VCTs, EIS and ISAs, there are few tax efficient products available.”

“For investors who can afford to take a long term view and do not have high liquidity requirements, VCTs can make a valuable contribution to a portfolio. However, it is key that investors are aware of the risk profile of the VCTs before making the decision to invest.” Salisbury House Wealth says there are generous tax breaks for investors in VCTs, which includes: • Investors get 30% Income Tax relief on investments up to the value of £200,000 – so for every £1 you invest up to £200,000 you can reduce your income tax by 30p • No tax on dividend payments from shares in VCTs • No Capital Gains Tax on disposals of shares GBI in VCTs

GB Investment Magazine · February 2020

Industries to watch in 2020

hris Hickey, UK CEO at global recruitment consultancy Robert Walters, marks GBI Magazine’s card

“With the outcome of the General Election now declared and Brexit at the centre of plans for 2020, we anticipate that there will be greater opportunities amongst emerging industries, disruptors and SMEs. Those sectors receiving notable VC funding will be ones to watch. “It’s businesses in these categories that will drive the hiring agenda by recruiting agile, tech-proficient and commercially savvy professionals who have their finger on the pulse of developing markets.” Edtech Education technology - edtech - is one of the UK’s fastest growing sectors, growing at 22% year-onyear and worth an estimated £170 million to the UK economy in exports alone. The UK edtech market is expected to reach £3.4bn by 2021 (out of a total of £100bn UK education market) and is home to more than 1,200 edtech companies - approximately a quarter of the total number in Europe. With spending and funding rife, the industry shows no signs of slowing down. In the UK alone schools are spending close to £900 million on edtech each year to leverage learning, and

GB Investment Magazine · February 2020

the education secretary has pledged a further £10million to support innovation. Coupled with this, the UK ranks number one in edtech venture capital funding in Europe – receiving more than a third (34%) of total investment to the continent. Tom Chambers, Senior Manager - Technology at Robert Walters comments: “For the last few years the fintech sector has been making significant noise in the recruitment market – with a 61% increase in job creation in 2019. What’s interesting is that edtech has now reached the same number of digital companies as financial technology and so I will expect to see a lot of competition between companies for top talent in 2020, which will naturally boost salaries and workplace benefits for anyone working in these sectors.” Agritech A number of startups in the UK have emerged at the forefront of agricultural technology – with the industry accounting for £14.3 billion in turnover and more than half a million jobs in the UK right now. The value is not surprising given over 70% of land in the UK is used for agriculture - representing over 7% of Europe’s total agriculture market. Chambers states: “The UK is no stranger to agritech and is home to many farmers who already

News

integrate technology into their work with excellent results.

half of payment service providers in the UK will be digital-only.

“Therefore it is not surprising to see the UK fast becoming a destination for tech companies to establish their businesses, not least because of our history of being a world leader in plant and animal science and being home to some of the most established agricultural research institutions in the world – 20% of the UK workforce is in science and so talent is not an issue.

Over a third (39%) of European venture capital funding goes to London fintechs - almost double any other city in Europe; Berlin (21%), Paris (18%), Stockholm (5%), Barcelona (4%), Amsterdam (4%), Zurich (3%), Copenhagen (2%) and Dublin (2%).

“Secondly, the UK proves an ideal environment for start-ups with access to one of the world’s leading venture capital industries and a major global financial centre. Venture capital investment in the UK is booming, with British tech firms attracting more venture capital funding than any other European country.” Fintech According to the Robert Waters report, The UK Fintech Revolution, in 2020 London will be home to just as many fintech ‘unicorns’ (companies worth more than $1bn) as current global leader San Francisco. Of the 29 fintech unicorns worldwide, nine are in San Francisco, while seven are housed in the UK.

Hickie adds: “When spotlighting the UK’s leading fintech unicorns, the income growth they have achieved over the past twelve months is phenomenal - increasing from a combined £77.1m to £177.6m revenue. That’s a revenue growth of 130% in just one year.” Such is the growth of the industry, that in 2019 job creation within the fintech space increased by 61% - making it the fastest growing sector in the London economy. And the benefits were not just felt in the capital; last year the fintech boom created an 18% uplift in job creation in regions outside London. GBI

E-money firms (as defined by the FCA) grew by 51% last year, and it is predicted that by 2020 over

GB Investment Magazine · February 2020

SEIS IN ACTION GBI EXPLORES

Regular readers of GBI Magazine will be familiar with the concept and implementation of EIS, but may be less conversant with its cousin, SEIS. In this article we’ll look at how the scheme has worked in practice for 3 successful companies and how in many circumstances it could be a viable alternative.

he Seed Enterprise Investment Scheme (SEIS) is the lesser-known companion programme to the much better publicised Enterprise Investment Scheme. SEIS was established by the UK government in 2012 and has enjoyed niche popularity, granting as it does a range of very attractive tax reliefs for eligible investors (including 50% relief chargeable against income tax).

to solve the problem of music artists and songwriters collecting their royalties and securing fair publishing contracts. Nova’s initial £50,000 SEIS investment and technical support allowed Sentric to bring their first industry disrupting product to market.

SEIS has rightly been lauded as a welcome and imaginative initiative, offering entrepreneurs a new mechanism of access to willing early stage venture investors where bank financing is unavailable to a young company for whatever reason and the capital requirement too small to interest mainstream funds, and offering generous tax reliefs to eligible investors. Here are a couple of examples. SENTRIC MUSIC / NOVA Sentric Music was one of Nova’s first investments, supporting the Liverpool based ‘music tech’ startup

GB Investment Magazine · February 2020

The digital platform gives music producers the ability to control and collect publishing royalties globally from one portal. This happens with no upfront fees, short

term contracts and preferable commissions; all whilst exposing artists to increased earning opportunities by connecting their music to opportunities in TV, film, video games and advertising. Nova’s support has followed Sentric’s progression from idea through to a successful, scalable, tech startup. Nova’s £50,000 investment has since resulted in a partial exit that returned £1,500,000; delivering 30 times investor returns over a 9 year period. Sentric Music is today a rapidly growing music publishing company with 70+ employees based across offices in Liverpool, London, Hamburg, Mallorca, New York and LA. The company now administers the works of over 100,000 artists/writers, and 1 million songs in the UK and around the world. Andy Davidson, CEO of Nova, told us “Being able to leverage Nova’s ‘startup generator’ business model gives us the ability to offer investors a direct route to the large and varied portfolio spread that’s required for SEIS to work. “Doing this without incurring the costs that other providers do in sourcing the deal flow, has allowed us to develop a better SEIS investment product that maximises the benefits for both investors and the businesses it’s deployed into.” MARKET MAKING / JENSON Jenson originally invested in Market Making (trading as agency:2) in February 2014. agency:2 started as a consultancy that specialised in social media marketing providing their clients with in-depth insight and understanding about key target demographics, thereby significantly improving the ROI on their digital marketing spend. Jenson recognised that the founders of the business (Joel Davis and Sharon Baker) had established a truly global social media agency, with a leading array of international clients – including MegaBloks, JLL & Pan MacMillan. Joel was also a regular speaker at

leading marketing events and was a founder member of the DMA Social Media Council. Sharon worked in project management for global multinationals such as DoubleClick / Google and the BBC and has worked extensively on international multi-lingual engagements on behalf of agency:2’s clients. Jenson’s Investment Committee minutes state that the reasons for investment were “The panel believed that the business operates in an attractive sector, has an appropriate business strategy which is delivering strong sales, profits and considerable growth and could provide significant upside returns if successful.” Following Jenson’s investment the business grew from strength to strength with the launch of the Social Insight Engine (SIE) in 2015 and the business doubled in size every year. The team continued to grow in size and scope and new client wins meant that the exponential growth looked set to continue. Whilst Jenson held the investment in agency:2, a Jenson Solutions Investment Director worked with the management team providing financial and operational support. The business won a number of awards such as Deloitte Top 50 Fast Tech Growth, Shorty Award ‘Best Use of Facebook’ Winner in 2017 as well as being nominated finalists in The Drum Social Buzz Award and CIM Award and more recently the Financial Times ranked them the UK’s fastest growing #socialad specialist in The FT 1000: Europe’s Fastest Growing Companies 2019. In June 2019 Jenson announced their exit from Market Making which consisted of cash and equity. This was Jenson’s fourth SEIS Exit. Next Fifteen Communications Group acquired the entire issued share capital of Market Making. The current return is 4.0x investment with a mix of shares and equity (before tax incentives and performance fee); with earnouts this could potentially reach a 12x return.

GB Investment Magazine · February 2020

As part of the exit, existing shareholders received an interest in SIE in proportion to their shareholding in Market Making. SIE holds the Atom technology that was developed in Market Making, so in effect investors in this company could receive a second exit from this one investment. A spokesman for Jenson told us: “Our experience is that the EIS/VCT market is highly competitive in businesses that are typically generating £1 million of revenue and are seeking additional funding, which has the effect of driving up prices. Our EIS Fund bridges the gap between SEIS funding and the larger EIS funds in the markets. “For our EIS deal flow we have access to our existing portfolio of SEIS companies and therefore have access to companies that we have been working with and mentoring for a number of years and are able to identify the most promising of our companies for follow on funding; additionally they are likely to fit the EIS criteria given the early stage of investment. We are also able to identify when they are likely to require follow-on capital and tranche EIS investments accordingly. We have invested EIS in 15 of our portfolio companies; in some instances they have received one round of funding and others have received multiple tranches since 2015. “The key difference is that we will invest earlier than our EIS/VCT competitors as we have extensive experience of early stage investing, we are perhaps more comfortable at the associated risk this brings. This is higher risk than a traditional EIS/VCT which is reflected in the favourable valuations we typically invest.” AN ALTERNATIVE APPROACH FROM AMERSHAM: “SEIS-PLUS” While a handful of specialist funds have sought to adopt a ‘pure’ SEIS approach, the current investment

GB Investment Magazine · February 2020

cap of £150,000 for any one qualifying company raise and a gross assets test of £200k pre-raise has dampened enthusiasm for SEIS within financial institutions for which this level of investment is too small to fit their investing criteria in terms of scale of promotion, selection, due diligence and management of such investments. Through experience in this market, with over £6m having been invested in their managed SEIS funds (December 2019), Amersham have dealt with companies that have indeed gone on to attract ‘followon’ funding with EIS investment in the ‘standard’ manner. However, thinking about how to optimally align managements’ interests to those of SEIS investors who naturally are concerned about initial EIS dilution as any growth company will require ‘follow-on’ investment, Amersham have developed a methodology to preassess those companies that carry sufficient potential strength to “pre-qualify” for possible follow-on EIS investment. Essentially, Amersham filter and select SEIS opportunities through the ‘lens’ of assessing these as future EIS prospects and then structure the investment decision from the very start around a twostage SEIS/EIS equity transaction. They know in such cases that that the business will require more than £150,000 to meet material growth criteria but have confidence in the core team that they will embrace the challenge of meeting the milestone criteria normally necessary to green light a second EIS stage of investment. These companies therefore gain a degree of comfort that their first EIS stage is prefigured into the overall financing plan at the SEIS stage. Fears by SEIS investors as to possible severe dilution prospects in a first EIS tranche and risks to operating viability and get-to-market speed of a delayed initial follow-on stage can be mitigated.

Smart Plant Systems (SPS) is an example of such a two-stage-powered SEIS/EIS investment. SMART PLANT SYSTEMS / AMERSHAM SPS is a building safety and visibility tool and system, used to provide real-time insight into dangerous and hostile plant room environments by monitoring and measuring a range of configurable elements. This is a project backed in 2019 by Amersham from its principals’ incubator. SPS was created to design, develop and bring to market an innovative “high tech, low cost” approach to round the clock, real time visibility into the status of commercial and public buildings. The objective is to monitor and report a broad range of environmental threats as well as providing data on the status of the environment and facilities across one or many areas via a real time dashboard visible at the customer’s premises or where used by facilities managers at remote location. Development work was built on the know-how of industry-leading cyber security experts to help ensure external threats to the management and control of a Plant Room are thwarted. The SPS devices are sold outright and are linked to a monthly subscription payable by users. The SEIS/EIS financing was implemented to allow the Company rapidly to recruit skills, finalise the MVP, add functionality and build stock levels whilst pursuing target ongoing revenues of £1.3m p.a. in 2021 at gross margins of 50%.

The two Principals of SPS brought their respective skillsets to bear on the creation of the venture within Amersham’s incubator, which structured the company’s short and medium term growth plans to be suitable for a “SEIS-Plus” raise. They are: · A leading Network Specialist and Ethical Hacker with over 20 years’ experience in building and breaking computers. Having qualified in Cisco CCNA (Network Associate) almost 12 years ago, he went on to work on some of the UK’s largest technological infrastructure and in recent years as an adviser to commercial organisations and UK government. He has appeared in the UK media advising a national newspaper as well making radio and TV appearances (Channel 4/BBC). · A Chartered Accountant formerly with Price Waterhouse before spending several years in the corporate finance department of Samuel Montagu &Co. Ltd (part of HSBC’s investment banking arm) before taking senior finance positions in public and private entities, with an emphasis on managing business creation. Amersham’s “SEIS-Plus” approach allowed for planning SPS’s transition from R&D to market within one overall approach comprising the “SEIS scope” and the “EIS scope”. Total investment to date by Amersham in SPS is £302,943 comprising SEIS investment of £113,512 (March 2019) and EIS investment of £189,431 (April – November 2019), resulting in an overall 19.46% holding by Amersham-managed funds. GBI

SPS’s market is every organisation, whether big or small, that needs data and information to monitor facilities for its buildings or industrial processes. Revenues are derived from a “Product As a Service” model thereby deriving valuable repeat annual revenues.

GB Investment Magazine · February 2020

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NEW ENTRANTS GB Investment Magazine Â· February 2020

NEW ENTRANTS Regardless of Brexit, these are exciting times for the EIS industry. The sheer volume of opportunities is attracting more and more new funds to the market – and they are very welcome. In most instances, although the fund might be new, the people involved are highly experienced and experts in their fields. Some have been investing in young companies for many years but are now offering a fund for the first time and are seeking support from the adviser market. Hardman & Co’s New Entrant Network initiative has been created to smooth their path to market. In this feature, we take the opportunity to showcase some of these new entrants and what they have to offer. We think you’ll be as impressed by their potential as we are. HAATCH VENTURES Haatch Ventures is made up of a team of hands-on value creators. They have been there. Built scaled companies of their own and sold them. They use that knowledge, experience and network to accelerate the growth of their portfolio businesses via a “Smart Money” approach, providing support to enable digital transformation. Over the last seven years the team has been investing, supporting and managing their own private and EIS fund portfolio of digital companies, hand selected through a world class deal pipeline. Why is the deal pipeline so great? The answer lies in the vast amount of respect the digital world has for the founders - Kiddicare.com architect Scott Weavers-Wright, who sold the business to Morrisons in 2011 for £70m & has since sold another start up to Quotient Technologies (NYSE Listed), digital marketing expert Simon Penson (founder of Zazzle Media; sold to NYSE-listed IPG) and Mark Bennett (Director of Hardware Partnerships for Google) as

GB Investment Magazine · February 2020

well as respected technology expert Fred Soneya. Together the team is able to best support portfolio companies not just with cash, but with a vast wealth of start up scaling knowledge. Now for the first time this expertise is being harnessed into an EIS Fund. To date the approach has produced market-leading returns. The current portfolio has average ROI of 5.60x based on the latest third party fund raising round for each company. Our target return on exit is 10x. This has given us an enviable reputation as THE go to early stage investors in digital disruption tech. Fred Soneya fred@haatch.com 01780 408487

New Entrants

SIDE BY SIDE EIS investing does not have to be in just start-up companies. The companies we invest in, while still EIS investments, are at the later stage of their development phase, and usually have 2 to 4 million pounds of revenue, and are establishing mainstream customer loyalty for their product and services. The fund selects just a few new companies each year, (8 in total), growing British companies and after very extensive diligence (that includes customers and international markets), may enter into long term financing and management advising agreements with the company. We provide our own expertise free, but may also introduce other expertise as needed or dictated by the diligence process. Companies are allocated new working capital by us each year, necessary to meet their approved business and financial plans. We develop a close strategic and operating relationship and help companies transition the well known and otherwise risky process to commercial large scale success. We believe we are unique operators who bought into and exited companies in our own right before forming our fund to expand our capacity to bring this select, focused experience to each company and commit at least one day a month to be with each management team throughout their lifetime in the fund. Contact: London@thesidebysidepartnership.com Tel: +44 207 993 8686

GB Investment Magazine Âˇ February 2020

NEWABLE EIS SCALE-UP FUND The Newable EIS Scale-up Fund 3 seeks to leverage Newable’s unique corporate infrastructure to invest in knowledge intensive companies at the scale up stage. We target companies which have de-risked their technology, developed traction with customers and now seek funding to scale their commercial operations. We specialise in Med-Tech, Automation, Spacetechnology and Electronics; these sectors provide particular opportunities created through the emergence of the fourth industrial revolution which is increasing productivity and efficiency across the globe. Michael Walsh, Managing Director and Newable CFO - Mike provides strategic financial support across the business and previously managed over £300m of VC investment funds. Mike has worked for some 30 years in financial services and qualified as a CA from PWC. Sanjeev Gordhan MBA, Commercial Director - Prior to joining Newable Sanjeev worked at Mattioli Woods as a Wealth Manager with a client book of circa £30million. Having been an advisor, Sanjeev understands the key priorities for IFAs and Wealth Managers and for this reason has been able to ensure Newable is well placed to provide investors with a best in class EIS investment opportunity. Alex Sleigh, Investment Director - Responsible for overseeing investments across the Fund, having been involved in over 60 Investments since joining in 2011 . MA (Hons) in Economics and Modern History from University of St. Andrews and Masters in General Management from Vlerick Leuven Ghent Management School, Belgium. ‘Investor in Residence’ at King’s College, London. Established in 1982 Newable is a leading provider of business services to UK SMEs and start-ups to help them start, scale and internationalise. We provide businesses with a raft of products and services ensuring we not only invest capital but support those companies through their business journey. For more information, contact Sanjeev Gordhan – 07850 915378 or at Sanjeev.gordhan@newable.co.uk

GB Investment Magazine · February 2020

ZERO CARBON CAPITAL The climate crisis is an urgent and existential threat to humanity. Record levels of greenhouse gases in the atmosphere are making extreme weatherrelated events more frequent and severe: hurricanes, droughts, floods, heatwaves and wildfires. Tackling this global challenge requires big technological innovations that can dramatically reduce our carbon output. The companies that will invent and commercialise the next wave of those technologies are being created now, and need seed capital to grow. The Zero Carbon Fund is a new EIS fund investing in these early-stage opportunities. We find ambitious teams and breakthrough ideas that can scale to reduce greenhouse gas emissions by half a gigaton per year, and deliver long-term value. We believe companies that make significant contributions to our zero-carbon transition will be highly valuable as the financial landscape is fundamentally rewritten by climate risk.

New Entrants

PRAETURA Praetura has supported SMEs since 2011, with the acquisition and listing of Inspired Energy plc that year. Since then, we have grown steadily and made a further 36 investments into high growth tech or IP enabled small businesses on behalf of investors, investing over £130m. Headquartered in Manchester, the Praetura team have built an enviable network across the region generating strong deal flow and opportunities. Businesses we look to back all provide access to recurring, high margin revenue streams and the opportunity for operational leverage once scaled. We are prepared to back these inherently scalable business models early. We believe that by making an early investment in a business, we are able to work with driven management teams at the foundational stages of a business and support them in growing successful ventures.

The ZCC team has a long history of engaging in this space and spent the last 4 years investing their own money as angels in the US and UK. They have seen first hand the significant growth in demand for investment and in public interest in this space. Along the way they have built a strong, global network enabling them to offer a unique perspective on the opportunity to investors. We believe the zero-carbon transition will produce a significant number of breakout companies and the Zero Carbon Fund is your opportunity to participate in that value creation. You can find out more at https://zerocarbon.capital or by emailing info@zerocarbon.capital.

As important is our ability to add “more than money”, we’re constantly looking for ways to add significant value through our team’s skillset, network and experience. Deciding whether we can add value and help shape a company’s growth is critical when we decide where to invest, as it helps to reduce the risk inherent in early-stage investing. Praetura’s approach and track record offers investors looking for meaningful capital growth investments an attractive investment opportunity. Praetura won the ‘Best New Entrant’ award at the ‘Investment Week Tax Efficiency Awards’” Contact Details: Jonathan Prescott – Business Development Director 07710087636 jon.prescott@praetura.co.uk www.praeturaventures.co.uk

GB Investment Magazine · February 2020

DIRECTORY Side by Side Partnership john@thesidebysidepartnership.com

IW Capital mark.pearson@iwcapital.co.uk

Bethnal Green Ventures milly@bethnalgreenventures.com

Zero Carbon Capital pippa@zerocarbon.capital

Praetura mike.mannion@praetura.co.uk

Nexus Matthew.Oâ&#x20AC;&#x2122;Kane@nexusgroup.co.uk

Nova alistair.marsden@wearenova.co.uk

Newable sanjeev.gordhan@newable.co.uk

o2h sunil@o2h.com

Haatch Ventures fred@haatch.com

GB Investment Magazine Âˇ February 2020

EIS done differently.

Invest soon to carry back tax reliefs to 2018/19. Call us on 02039 510590, or email info@valacap.

Investors should only invest in the Vala EIS Portfolio on the basis of the Information Memorandum, Application Pack and Key Information Document, having received advice from a suitably qualified adviser. We do not offer investment or tax advice. EIS-qualifying investments should be seen as long term investments, their value can fall as well as rise and they are not covered by the Financial Services Compensation Scheme (FSCS).

M AGAZINE

EIS ROUND TABLE LONDON

GB Investment Magazine Â· February 2020

Round Table

PARTICIPANTS Richard Angus

Ketan Patel

Head of Business Development

Chartered Financial Planner

Hardman & Co E: ra@hardmanandco.com T: 0207 194 7635

Prerak Financial Services E: ketancfp@gmail.com T: 07771 997857

Chris Sandfield

Bruce Elliott-Smith

CEO

CoInvestor E: chris.sandfield@coinvestor.co.uk T: +44 (0) 203 095 8551

Venture2Grow

Clive Nicholas

John Glencross

Director

Chief Executive

Morgans Independent Financial Advisers E: c.nicholas@morgans.co.uk T: 0207 491 5069

Calculus Capital

Curran Samuel Anstock

Kalp Shah

Director â&#x20AC;&#x201C; Financial Planning

Wealth Manager

Tilney Financial Planning E: Curran.anstock@tilney.co.uk T: 0203 818 6843

Vintage Wealth Management E: kshah@vintagewealth.co.uk T: 020 8371 3111

Timothy James Mckechnie

Andy Davidson

Investment Director

CEO

S4 Financial Limited

Nova E: andy@wearenova.co.uk T: 0151 558 0161

E: tim@s4financial.co.uk T: 01276 34932

E: bruce@venture2grow.co.uk M: 07710 700750

E: info@calculuscapital.com T: 0207 493 4940

GB Investment Magazine Âˇ February 2020

WHEN THE ADVISERS MET THE EIS FUND MANAGERS Back at the end of November, Calculus Capital kindly played host to GBI Magazine’s latest EIS Round Table session; the participants were an even even split of financial advisers / planners and fund managers / providers. The highly flexible agenda included the Patient Capital Review’s effect on EIS, investee company selection, levels of investment success and failure and how to make the Scheme work harder. The intention was for both sides to get a clearer picture of the issues and concerns that they each face.

ohn Glencross, CEO and co-founder of Calculus Capital, kicked off with a sobering statistic: “The UK is number 3 in the world when it comes to starting companies – but we’re 13th in terms of being able to scale them.” He noted that in the 25 years of EIS, it had proved to be the most important source of funding for UK growth companies. Two years ago he had taken part in the Patient Capital Review and the result had been “a mixed bag – which is normal. EIS was supported, but certain abuses and misuses were addressed. VCTs were supported too – both were regarded as playing a significant role.

GB Investment Magazine · February 2020

“What it didn’t crack is scale-up. We’re still struggling when a UK company needs £30-40m to grow, except in certain tech areas. A lot of our best companies end up getting bought, usually by Americans. That’s fine for investors, but what UK PLC needs to sort out is scale-up. Do we persuade the big pension funds to put in more? Woodford hasn’t helped there. Ask a fidelity with a small company fund, they won’t put in less than £250m. “The Patient Capital Review closed a few loopholes around film project finance, but it didn’t do much for companies which want to continue growing but aren’t in the corporate tech bubble. Such funds are

Round Table

available in the US, but we’re pushed to find them over here.” Chairman for the session was Richard Angus, Head of Business Development at Hardman & Co; he invited the rest of the participants to give a quick snapshot of their specialist areas and what they hoped to learn from the session. Chris Sandfield, CEO of Co Investor, the fintech platform explained: “We started in the world of EIS, that’s the DNA of the business and we’re now looking at working with fund managers with VCTs. The goal is to help facilitate the marketplace to the advisors and financial planning community and fund managers and digitise the investment process. “It’s an inefficient process to review and access research material, review the funds, invest, and the big bugbear is on the reporting of those funds. We’ve built the tech for four years to digitise the investment process. We’re looking at strategic partnerships for a complete digital universe and see how we serve the investors. The one thing we’ve done is we’ve made it free for the community. We try to work with the funds and provide the service free of charge to investors. “There is still plenty to do, not least increasing a full straight-through process and transaction capability. We’ll soon be launching a custodian suite, so we have a safe place to operate and handle complaints, then everything else is offline. The next evolution is the end-to-end process. Every advisor and investment manager we speak to says they’ll do it if we can make it easier. How can we create that marketplace in a scalable manner? “We can be more transparent. We can have better reporting to create a level of intelligence and trust. We believe we have the tech to serve the community, we just need to embrace the digitalization.” Curran Anstock, Director at Tilney Financial Planning, said this was his first Round Table, “so I look forward to hearing everyone’s thoughts. I’ve been working with clients with the EIS for 4-5 years, and there is still negativity when you speak to clients around taxefficiency. “It’s therefore about demystifying that and learning more about the actual companies and benefits of

the tax advantages and how they can drive these companies. So understanding that better and showing we’re investing in real things rather than just a product with a few tax benefits. It’s about if you would invest without the benefits.” Ketan Patel, Chartered Financial Planner at Prerak Financial Services, took over his father’s business in 2007. “I’ve got about 125 wealth clients and about 700 mortgage and protection clients. They’re not interested in buy-to-let any more, so I’m new to EIS and VCT, and that’s the next best place for them to invest. The majority of my clients have parents with 4-5 properties they’re going to inherit, so we’re looking for alternative investments and I’m hoping today will help clear things up.” Tim McKechnie is Investment Director at S4 Financial. “We now look after about 160 reasonably high net worth clients, most have their retirement planning sorted and are looking for something more interesting. EIS and VCT are options for many of those, particularly with the pension restrictions. A number of clients have set up as angel investors and we help them with EIS compliance and do all the HMRC. “We’ve done some EIS investment via funds; one of the questions that keeps coming up with a number of clients is many funds are set up as blind and they don’t know what they’ll be investing into. We’ve seen things where we’ve seen EIS companies, who’ve historically invested into a different area announcing they’ll be investing in regional manufacturing, so how does this translate across? The key question is how do people select investments and how can we give the clients confidence that the investment manager has the expertise in a given area? Take the film and media space - a lot of clients will have read that HMRC have challenged the film partnerships so there is a negative perception of the sector, and a lot of clients and investors won’t invest into that area because of the history.” Kalp Shah is an IFA with Vintage Wealth: “We’ve been going for 30 years. We primarily advise clients, mostly businesses; a lot of referrals come from joint ventures with accountancy firms in London. As a firm, we’re a cautious investor, so the majority of clients want to protect their cash. I’ve been advising on EIS for about

GB Investment Magazine · February 2020

eight years, I like them, but the appetite seems to have gone down. My role is to work with our compliance department and educate them that that tax efficient planning should be part and parcel of our advisory role, and in doing so encourage other advisers to use them more.” Bruce Elliott-Smith is CEO of Venture2Grow: “I raise money, consult and provide deal flow for 8 EIS funds and other investment funds too. I’m also an early stage investor in the GrowthInvest Platform. I’m not normally a participant at these things, but GBI Magazine invited me.” The CEO of We Are Nova, Andy Davidson, has built an operating model which allows the company to cofound businesses with passionate co-founders. “We’ve done 80 businesses now and we have an 80% yearon-year growth record in our portfolio. Over a 10-year period, we’ve co-invested a lot, we have some luminary investors, we’ve also co-invested with EIS funds, and about a year ago we launched our own EIS fund. “The thinking in our business is quite disruptive and tech-backed and looks to use technology to improve operations in the sector. We’ve looked at that with EIS funds. We’re building a platform around our fund to allow us to make it easy for investors to have a broad portfolio.

GB Investment Magazine · February 2020

“We want to get to a point where an investor can sign up to invest £500 a month, have their money deployed into 50 different companies, the certificates to be generated automatically, and for the forms to be filled out and tax reclaimed. We’re trying to drive out the paper trail and make it easy to take advantage of the tax breaks out there and investing in a class of assets that can deliver returns.” Clive Nicholas is a Director of Morgans Independent Financial Advisers and he added “we’ve been doing EIS for 10-15 years, with VCTs as well. They all fit in with retirement and pension planning, and are all part of what should be considered for high net worth individuals and we get involved with the products. “What I’m looking to find out is how others are sourcing the market as it’s hard to find what’s out there, who’s good in what sector, what they’ve done in the past, it can be difficult. It’s not like life insurance, it’s hard to select who’s good in what sector. You have to look at promoters, then the underlying investments they go for so it can all be a bit daunting for small and medium sized IFAs.” So, an interesting opening round. Rounds 2 & 3 will be reported later in this issue... GBI

Round Table

“SUCCESS IS NOT FINAL; FAILURE IS NOT FATAL: IT IS THE COURAGE TO CONTINUE THAT COUNTS.” WINSTON CHURCHILL

At a recent GBI Magazine EIS Round Table, kindly hosted by Calculus Capital, the spotlight fell on the success/failure rate among early stage companies and how it is perceived by fund managers and investors alike.

hairman for the day Richard Angus of Hardman & Co reported a recent conversation with an investor who said that of “...the next 10 investments he would make, 3 would survive (with 1-2 being successful) and 7 would fail. “And that’s a good risk reward profile. But do you as advisers think you can take the investment proposition to the next stage with your client with that information? John Glencross of Calculus agreed: “Anyone who says they’ve never had a failure in business is not being totally straightforward as this is about growth investment. As growth investors, we know it works, we know there’s plenty of intellectual capital in this country, and the communication of that risk and reward to the outside world can be tricky. I went last night to my old university where they brought together people from the fund management industry and students, and someone said if they get it right 60% of the time, they’re ahead of the market, which is true. “The important thing is the investor. If you were as rich as Steve Jobs, I’d say if you like that company, invest in it, but for people for whom this isn’t their day job, you have to have a portfolio to spread the risk.

After Andy Davidson of We Are Nova reminded the participants that 90% of early stage companies fail to make it past year 3, John emphasised “I think you have to tell clients there will be failures and say that’s okay because that’s part of growth investing, but the loss relief on failures is very attractive. “The bottom line is if you want a big income fund, fine, you don’t expect companies to fail, but they seem to quite regularly. In growth investing, though, you will get failures. You have to tell the client it’s okay, the important thing is to have a portfolio and have a growth manager with a track record. Andy Davidson suggested it all comes back to the data: “You need to go back to your client and say what the market has done. What appears to be happening is that all this growth in the market is coming from a small number of companies so you need a really big portfolio. Fund managers have different specialities, but I’d say if you’re going to invest £100,000, I’d put £10,000 with 10 different managers. Different managers have different specialities. It is important to talk about failure in the context of the wider market growth, and the way to mitigate risk is to put your money with as many as possible.”

GB Investment Magazine · February 2020

Andy Davidson reckoned that in early stage, you need a portfolio of 50-80 companies to offset failures and as you can’t influence the outcomes you need them to fail quicker and thereby consume less capital. Over the previous year, Calculus explained that they had explored investing in around 600 companies, while We Are Nova had looked at 1,600 founders and completed 27 deals. Davidson noted that he and Calculus are at opposite ends of the lifecycle. “For us, we’re big practitioners of the lean movement, we fund a number of things we do, we don’t try and fund high counting businesses, we try and build in a variable cost base and we try and achieve the next proof point. We might work with a medical professional, we’ll buy at £400,000 and take 25% of the equity, we will provide them with a team to get to a minimum viable product to get tested in a hospital. You might fund them for six months with an outcome they need to achieve. If you don’t fund them, the business doesn’t fail, but you don’t put in any more money until they hit their next traction point. If they need to get hospitals to trial their product, it can take three days, three months or three years, it doesn’t matter to us. “We don’t fail things, we just ‘not yet’ them. If they want to take the next steps and need capital, we won’t fund that until something happens and then we might fund it for another six months. That’s the strategy we use to make sure we spend as little investor capital as possible. “We do that with 45 companies at once and we want to expose investors to all those. We buy at £400,000, so a successful EIS funding round for us would value the business at maybe £5m, as you get more than 10 times the uplift in value. It’s important that we have a broad spread of risk.” John Glencross told how one of Calculus’ portfolio companies, Essentia Analytics, had been founded by an ex-fund manager who had identified that investment manager bias influences outcomes. “The investment decision is very scientifically driven in active fund managers, it’s very controlled. However,

GB Investment Magazine · February 2020

sale decisions can be more emotional, especially if the company is not performing as expected. One of the hardest parts about what we do is to say we will not finance a business anymore as we don’t believe it will achieve its objectives. We don’t just pull the plug on a business when it’s not working, you can’t do that as an investor, we work with the management teams to help enact positive change, and if they can’t look to further capital from us we may help them raise other sources of funding, or if appropriate, we’ll look to sell in the market. Making investment is the easy bit, the tough bits are the decisions afterwards. This is real, these are real companies and we have to be prepared to take tough decisions. By and large, we get it right.”“The three important things in property are location, location, location. What’s important in growth investing? People, people, people, because it doesn’t matter if you have the best business plan, if you don’t have someone capable, it’s not going anywhere. We spend a lot of time working with pre-investment to ascertain how they will function, and we do our own due diligence. Our people assess the strength of a management team including the senior people. “What do we look for? Experienced management that has a reasonable track record that will give us a good indication and a service that is ready for market. We want a discernible market lead and a reasonably competitive situation. People, people, people; then ‘ is the product ready for market and is there a need?’ You do an awful lot of due diligence in making an investment, but you have to be ready to pull the plug. If you have 35%, you control the situation, or you say they’re not having any more money. There’s the famous adage that the best way to lose money is to double up.” The best thing about having a portfolio of EIS investments is that when an investment does fail, not only do you have the downside protection of loss relief, but you have other potentially successful investments to fall back on and provide you with a strong return. The discussion then moved on to cover communication, EIS admin and exit strategies, which are covered in our next article. GBI

Round Table

PROVIDERS AND ADVISERS – IS THE COMMUNICATION GETTING BETTER?

At a Round Table session in November hosted by Calculus Capital, one of the main topics was the varying criteria that make an investee company attractive to capital providers and to IFAs and their clients. Chairman for the day Richard Angus, of Hardman & Co, wanted to know if the two sides were beginning to understand each other better.

“

hey are,” said Bruce Elliot-Smith, CEO of Venture2Grow. “I’ve gone from when there was no provider information, no IFA involvement, and I was doing demos for about a year, so I was getting a lot of feedback. Then the GrowthInvest platform came along. I raised money for hundreds of companies. When I met new IFAs, I knew they just wanted to know how to do it.

“Let’s face it, IFAs want clients, so if they meet the CEOs of the companies, it changes as they develop a relationship with that provider. That became the norm for me, and more recently I have another trend which is in philanthropic investing. If you have that element to your fund, it makes it easier for me to go that way round, so I’m essentially in the adviser’s shoes working backwards.”

“The first thing that is asked is what is different about the provider? It could be track record but the big thing that made a difference was taking the investment, so I found when you introduced the company, it would spark the interest to look at that provider.

Andy Davidson, CEO of We Are Nova, agreed. “It’s a dichotomy, you should look at data, portfolio spread and how to maximise returns, but that can be perceived as dull. If you can get your client in front of someone who talks well, that really works. People

GB Investment Magazine · February 2020

do get excited so you need to say it’s great, but it might not work, so spreading the risk out allows you to match up the interest with the financial element of needing to build a portfolio.” IFA Clive Nicholas, Director of Morgans, noted that “As IFAs, we have to look at who’s managing these and investigate whether they’re managing them properly. We have to look at day to day money; if we give you money, how quickly it will be deployed? We need to know about these things and finding out it’s fair to say can be very difficult. The key question we want answer is what’s lined up and when are you likely to put that money in?” Glencross of Calculus Capital agreed and added “We’re aiming for 15 months. I think we’ll get closer to a year as we go through the first part of next year. If I talk to investors now, I say 15 months to invest that money. Each investment gets an EIS3 but the timescale to get an EIS3 varies, if we’re the only investor it can all be given to the revenue within a week, the revenue will probably come back in six weeks with the forms. “The challenge is, if we’re co-investing with someone and getting their investment, I won’t invest alongside a so-called private client investor. If a private client investor comes into an investment, and sometimes they do, it can be very difficult to get the tax details for all the people, so we tend to invest with a knowledgeable peer group and do lots ourselves,. That way it can be a quick process and investors will start to get EIS3s in a few months, but my aim is to bring that 15 months down to 12.” Curran Anstock, Director at Tilney Financial Planning commented: “Engagement is a really important aspect of it. People want to know where their money is being invested and what it’s doing. We’ve had a change towards a more philanthropic mindset of wanting to help, so knowing you’re close to these companies and working with them gives us a lot more confidence

GB Investment Magazine · February 2020

speaking to clients to say we know what management is being provided and that’s a great comfort to the client to know there are processes in place.“ Asked about understanding the investment opportunity and communicating it to his clients, Kalp Shah, IFA at Vintage Wealth, was confident. “I’m comfortable with the investment and the engagement part is easy. My clients trust me, if I say it’s good for them, that’s it, but I’m not confident investing their money in something they don’t understand. Further down the line, they could complain. “I like Andy Davidson’s idea a lot, where they can put the money in monthly and then it’s spread, that reduces the risk a lot. I would explain to my clients that you don’t just chuck the money at a company and it gets invested. There is this statistic that 90% of companies don’t make it past year three...It’s the support the company is getting, it’s not just giving them the money, you’re asking them for accountability and you’re supporting them, so they have a much better chance of being successful. They’ve learnt how to invest money better and provide that support. This is what I would do. I’ve started to go into VPR investments, but with 4-5 different providers and I would do the same with EIS. Andy Davidson raised a common gripe: “We also need to remove 18-page application forms.” Chris Sandfield, CEO of Co Investor, offered a solution – “I have an efficient service where you only have to fill out the form once and can apply it to all the funds.” This would suit Tim McKechnie, Investment Director of S4 Financial: “You can end up with a position where you’re waiting for 15-20 different EIS3s. If that were automated, which is where you come in, if we could do that with one application and one set of reporting to clients, that would be easier. A challenge we have is with regard to some of the EIS funds, you suddenly

Round Table

have a number of providers or fund managers who have completely changed their game and are investing in an area that doesn’t fit. As far as that’s concerned, it does make it more difficult. These companies who were the stalwarts are now going into areas that we need to be confident they understand.” From an investor perspective, going back to this, the clients want to know what they’re going to be investing into, that’s why investing into an individual with someone they know is easier because they like him and what he’s doing. The whole deployment period is also difficult as I’d like to be able to invest all the money we get in 1215 months. We’ve got a hefty portfolio, so we have 45 companies and we know they’ll all raise money in the next 12 months, so we currently deploy funds quarterly and are looking to monthly. Tim McKechnie added “this comes down to automation and single application. We’ve seen this with simple cash accounts, now there are aggregators where they spread the money. Unless you have something like that, investor apathy is such that if they have to fill out 10 forms, they can’t be bothered. If they can’t be bothered to do it for their own bank accounts, it’s hard to sit down and run through 5-10 different applications for funds. It’s easier for them to invest in one company that they know. The Chair asked the fund providers how much was dictated by the end of the tax year? The consensus in the room was that it was too much. In response Clive Nicholas observed that it shouldn’t be difficult because of the carry back provision and it shouldn’t be an issue. He said “We’ve talked about selecting companies, but not exit strategies, which is equally important. If your money is locked up for longer than expected, are there exit strategies in place?”

One of the key takeaways from the day was that the industry is changing and technology solutions will allow more people to invest. “We’ve got technology now that can make it efficient,” offered Chris Sandfield. “We’re speaking with a number of fund managers about standardising an application pack, a lot of them are keen. More importantly, what can technology do next? I’m encouraged. My background has been asset allocation, and I think we all recognise that what the industry needs to do next is to utilise technology to bring the funds together for an easier way for investors and advisors to have an automated diversification process. “That de-risks investments and creates some liquidity for the smaller fund managers who don’t have the marketing budgets but have specialised teams. If tech can facilitate diversification, I’m encouraged by the openness to explore that and I’d like to pick up on that in another round table.” Clive Nicholas liked this; “I think the process we have in house is on the right track, selecting the EIS providers, but I’m encouraged there will be technology to help us in getting more diverse portfolios. 18 pages on one form is a nightmare and having EIS3 forms coming out of our ears, the clients don’t know where they are, so this is very encouraging.” As the session drew to a close, Ketan Patel, financial planner at Prerak Financial Services, observed: “We’re a cautious firm. What I got out of today as I’m sure we all did is that it’s useful to really understand the providers. We spend a lot of time doing due diligence on which products to recommend, and sometimes we have to handhold clients all the way through and it’s an expensive process. This is a value-added service we GBI provide, so I hope we’ll get the reward over time.”

GB Investment Magazine · February 2020

M AGAZINE

GBI OPEN OFFERS A selection of tax efficient opportunities currently open for investment

Open Offers

SEIS Open

Nov 2017

Evergreen

Target Raise: £3m per annum Minimum investment: £10,000

Deepbridge Innovation SEIS The Deepbridge Innovation SEIS represents an opportunity for private investors to participate in a selected portfolio of innovative seed stage innovation companies, taking advantage of the tax benefits available under the Seed Enterprise Investment Scheme. Providing seed investment to emerging technology-focused companies, the Deepbridge Innovation SEIS seeks to fund selected investee companies that possess an exciting new innovative approach to meet the existing and emerging requirements and demands of both corporate and consumer markets. The Deepbridge Investment Team has a proven track record of working with emerging companies to create value for shareholders through a hands-on investment methodology. The Deepbridge Innovation SEIS is a manager fee-free SEIS opportunity at the point of investment for subscriptions received by a financial adviser. Upfront and ongoing manager fees are paid by the Investee Companies, potentially allowing investors to enjoy up to 100% of SEIS tax benefits. Please see costs and fees section in the Information Memorandum for full details.

T. 01244 746000 E. Enquiries@deepbridgecapital.com www.deepbridgecapital.com

The availability of SEIS tax reliefs depends on individual circumstances, may be subject to change in future and depend on underlying companies invested in maintaining their qualifying status. Investment in unquoted companies carries high risks and investors could lose the total value of their investment. Investments in SEIS can be difficult to realise. Past performance is not a reliable indicator of future performance. This financial promotion, directed at investment professionals, has been approved by Enterprise Investment Partners LLP (“EIP”). Deepbridge Advisers Limited (FRN: 609786) is an Appointed Representative of EIP, which is authorised and regulated by the Financial Conduct Authority (FRN: 604439).

EIS Open

January 2013

Evergreen

Deepbridge - Technology Growth EIS

Amount to be Raised: Uncapped

The Deepbridge Technology Growth EIS represents an opportunity for private investors to participate in a selected portfolio of innovative growth companies, taking advantage of the tax benefits available under the Enterprise Investment

Minimum Investment: £10,000

Scheme. The Deepbridge EIS focusses principally on three sectors: • Energy and resource innovation; • Medical technologies; • Business enterprise and other high growth IT-based technologies.

T. 01244 746000 E. Enquiries@deepbridgecapital.com www.deepbridgecapital.com

The Deepbridge Investment Team has a proven track record of working with emerging companies to create value for shareholders through a hands-on investment methodology. The Deepbridge Technology Growth EIS is a manager fee-free EIS opportunity at the point of investment for subscriptions received by a financial adviser. Upfront and ongoing manager fees are paid by the Investee Companies, potentially allowing investors to enjoy up to 100% of EIS tax benefits. Please see costs and fees section in the Information Memorandum for full details. The availability of EIS tax reliefs depends on individual circumstances, may be subject to change in future and depend on underlying companies invested in maintaining their qualifying status. Investment in unquoted companies carries high risks and investors could lose the total value of their investment. Investments in EIS can be difficult to realise. Past performance is not a reliable indicator of future performance. This financial promotion, directed at investment professionals, has been approved by Enterprise Investment Partners LLP (“EIP”). Deepbridge Advisers Limited (FRN: 609786) is an Appointed Representative of EIP, which is authorised and regulated by the Financial Conduct Authority (FRN: 604439).

GB Investment Magazine · February 2020

SEIS Open

January 2016

Evergreen

Target Raise: £3m per annum Minimum Investment: £10,000

The Deepbridge Life Sciences SEIS The Deepbridge Life Sciences SEIS represents an opportunity for private investors to participate in a selected portfolio of early stage life sciences companies, taking advantage of the tax benefits available under the Seed Enterprise Investment Scheme. Providing seed investment to emerging companies operating in the life sciences sector, the Deepbridge Life Sciences SEIS seeks to fund companies with exciting new technologies that aim to satisfy the needs of large and growing markets. The Deepbridge Investment Team has a proven track record of working with emerging companies to create value for shareholders through a hands-on investment methodology.

T. 01244 746000 E. Enquiries@deepbridgecapital.com www.deepbridgecapital.com

The Deepbridge Life Sciences SEIS is a manager fee-free SEIS opportunity at the point of investment for subscriptions received by a financial adviser. Upfront and ongoing manager fees are paid by the Investee Companies, potentially allowing investors to enjoy up to 100% of SEIS tax benefits. Please see costs and fees section in the Information Memorandum for full details. The availability of SEIS tax reliefs depends on individual circumstances, may be subject to change in future and depend on underlying companies invested in maintaining their qualifying status. Investment in unquoted companies carries high risks and investors could lose the total value of their investment. Investments in SEIS can be difficult to realise. Past performance is not a reliable indicator of future performance. This financial promotion, directed at investment professionals, has been approved by Enterprise Investment Partners LLP (“EIP”). Deepbridge Advisers Limited (FRN: 609786) is an Appointed Representative of EIP, which is authorised and regulated by the Financial Conduct Authority (FRN: 604439).

EIS Open

March 2017

Evergreen

Deepbridge Life Sciences EIS

Maximum Raise: Uncapped

The Deepbridge Life Sciences EIS represents an opportunity for private investors to participate in a selected portfolio of healthcare innovation, whilst taking advantage of the tax benefits available under the Enterprise Investment Scheme.

Minimum investment: £10,000

The Deepbridge Life Sciences EIS focuses principally, but not exclusively, on three sectors: • Biopharmaceuticals • Biotechnology • Medical Technology. The Deepbridge Investment Team has a proven track record of working with emerging companies to create value for shareholders through a hands-on investment methodology.

T. 01244 746000 E. Enquiries@deepbridgecapital.com www.deepbridgecapital.com

The Deepbridge Life Sciences EIS is a manager fee-free EIS opportunity at the point of investment for subscriptions received by a financial adviser. Upfront and ongoing manager fees are paid by the Investee Companies, potentially allowing investors to enjoy up to 100% of EIS tax benefits. Please see costs and fees section in the Information Memorandum for full details. The availability of EIS tax reliefs depends on individual circumstances, may be subject to change in future and depend on underlying companies invested in maintaining their qualifying status. Investment in unquoted companies carries high risks and investors could lose the total value of their investment. Investments in EIS can be difficult to realise. Past performance is not a reliable indicator of future performance. This financial promotion, directed at investment professionals, has been approved by Enterprise Investment Partners LLP (“EIP”). Deepbridge Advisers Limited (FRN: 609786) is an Appointed Representative of EIP, which is authorised and regulated by the Financial Conduct Authority (FRN: 604439).

GB Investment Magazine Open Offers GB34 Investment Magazine · October· 2018

Open Offers

EIS

SEIS

Open

Evergreen

Open

Evergreen

Amount to be Raised:

Open Ended

Minimum Investment: £10,000

Nova Growth Capital At Nova, we believe that fund management can be done differently. Our approach to fund management affords the investor access to tech enabled, growth-focused businesses at the earliest stages of a company life cycle, all whilst aiming to reduce the risk associated with investing in startups. We do this by aiming to reduce the 5 most common startup mistakes. Our truly proprietary deal flow is provided by our cofoundry business, helping founders solve real problems felt by sizeable markets. Our cofoundry then employs over 100 people to consult, build and grow our portfolio companies, applying our investors capital into an operating model rather than an investment model. The result; our portfolio value has grown in excess of 80% year on year for 10 years. • Potential returns of £5.70 in the £1 if portfolio growth continues at 83% • Target returns of £2.18 in the £1 based on targeted 20% year on year portfolio growth

T. 0151 318 0761 E. fund@wearenova.co.uk www.wearenova.co.uk

EIS Open

Evergreen

SEIS Close

Evergreen

Amount to be Raised: £5m Minimum Investment: £15,000

• A minimum return of 58p in the £1 in the unlikely event that every company in the cohort fails • A 0.2% chance of every company in the cohort failing Our senior team are a balanced mix between seasoned investors, start-up practitioners and successful entrepreneurs. The fund aims to deploy quarterly into 10 companies through a mixture of SEIS and follow on EIS investment, further reducing risk by giving a diversified spread of circa 30 high growth, tech enabled companies per year

Oxford Technology Combined SEIS and EIS Fund - “The Start-up Fund” Oxford Technology invests in high risk, high reward technology start-ups, in general within an hour’s drive of Oxford, and has been doing this since 1983. The latest fund, OT(S)EIS, made its first investment in 2012. By 31st December 2019, OT(S)EIS had completed 129 investments in 40 companies. The figures for the fund as a whole since its inception are as follows:

T. 01865 784466 E. info@oxfordtechnology.com www.oxfordtechnology.com

Gross amount invested by OT(S)EIS:

£6.51m

Cash back to investors via tax reliefs:

£2.54m

Net cost of these investments after tax reliefs:

£ 3.97m

Cash back from exits:

£ 0.24m

Fair value of remaining portfolio:

£13.47m

Total value: £16.25m Tax free gain (on paper only so far):

£9.50m

After tax losses on the three failures:

£0.0459m

*OT(S)EIS investors who made an SEIS investment in Animal Dynamics, an Oxford University spin-out at 14p per share (7p after SEIS tax relief) in Jun 2015, had the opportunity to exit in March 2019 at 97p per share (so 14x the after tax share price). About 50% of the shareholders opted to sell with 50% opting to remain – the company is doing very well. OT(S)EIS remains open for investment at any time. We average about one or two new investments per quarter, and investors in the fund receive their pro-rata share of these. The latest quarterly report, with a page of information on each investment is downloadable from from www.oxfordtechnology.com.

GB Investment Magazine · Open Offers

EIS Open

01.09.2017

Evergreen

Amount to be Raised: £40m Minimum Investment: £15,000

Oxford Technology EIS Fund - “The Development Fund” Oxford Technology has been investing in technology start-ups since 1983. The Oxford Technology EIS Fund will aim to provide each investor a diversified portfolio of 5 - 10 EIS investments in high risk, but high potential early stage technology companies near Oxford.

T. 020 7222 3475 E. info@oxfordtechnology.com www.oxfordtechnology.com

EIS Open

01.10.2018

Evergreen

Amount to be Raised: £20m Minimum Investment: £10,000

Great Point Ventures EIS Great Point Ventures EIS (“Fund”) presents UK tax payers with the opportunity to invest in EIS qualifying businesses operating in the booming UK creative industries. The Fund aims to seek out high growth companies and has a broad sub-sector approach designed to offer investors a degree of diversification across content creation, content distribution & marketing, production facilities & services and new media & technology. Investors will have a minimum of four companies in their portfolio and all companies must have received Advance Assurance from HMRC prior to funds being deployed. Why Great Point Ventures EIS?

Unrivalled sector experience - the Great Point team have a unique blend of financial, operational, commercial and investment management expertise specific to the media sector T. 0203 873 0028 E. dperkins@greatpointmedia.com www.greatpointmedia.com

Strong opportunity pipeline - significant proprietary deal flow and a number of “first look” deals in place with industry players and leading educational institutions Alignment of interest - the Fund offers a competitive fee structure ensuring Great Point’s interests are aligned with those of the investor Growth focussed - the Fund’s target return is two times gross investment (excluding tax reliefs, inclusive of all costs and fees) Tax efficient - for every £1 subscribed at least a minimum of “98p” will qualify for EIS relief (subject to personal circumstance)

GB Investment Magazine Open Offers GB36 Investment Magazine · October· 2018

Open Offers

EIS Open

April 2017

SEIS Close

Evergreen

Amount to be Raised:

Up to £25,000,000

Minimum Investment: £10,000

T. 020 7071 3945 E. enquiries@growthinvest.com www.growthinvest.com

EIS Open

Now

SEIS Close

Multiple

Amount to be Raised: Evergreen

Minimum Investment: £10,000

T. 07768571271 E. pauls@worthcapital.uk worthcapital.uk

GrowthInvest Portfolio Service A discretionary investment management service which seeks to leverage the experience and expertise of the GrowthInvest investment team to select a diversified portfolio of some of the most promising companies that have passed through GrowthInvest due diligence process. GrowthInvest is an independent platform, which provides access to tax efficient investments to a growing network of UK financial advisers, wealth managers and investors. The platform aims to bring the advantages of early stage investing to a wider audience of investors and advisers, who are able to benefit from the potentially higher returns these companies can offer and tax efficiency via government approved schemes, such as SEIS and EIS. From our experience working with advisers on the Platform, the Fund has been designed to consist of three sub-funds, each with a separate investment policy. The first will target Investee Companies which qualify for SEIS Reliefs only. The second will target Investee Companies which qualify for EIS Reliefs only and the third will be a mixed investment policy which will target Investee Companies which qualify for SEIS Reliefs and / or EIS Reliefs. You will be able to choose how much of your subscription to allocate to each of these three sub-funds. The Fund is aiming to exit investments after three to seven years.

Start-Up Series Fund The Start-Up Series Fund is an evergreen EIS & SEIS service. Managed as an Alternative Investment Fund by Amersham Investment Management Limited, authorised and regulated by the FCA. The service is designed for eligible subscribers to be invested in selected winners of the Start-Up Series, a monthly competition organised by Worth Capital Limited and promoted by startsups.co.uk. The Fund invests in qualifying B2C or B2B companies with innovative products or services that can create new consumer behaviours in growth markets, with teams that demonstrate compelling marketing & communication skills and with a clear credible route to exit. •

EIS & SEIS investments - choose EIS, SEIS or both

•

Businesses selected by real world, commercial entrepreneurs with deep brand, marketing, retail & innovation expertise – worth capital

•

A unique approach to UK EIS & SEIS fund investing – a monthly competition which has attracted over 2,600 applications to date

•

Ongoing oversight from experienced investor directors - skilled in helping accelerate growth & reducing risk

•

Investments in ‘mini-portfolios’ of typically 3 or 4 businesses

•

Investments qualifying for attractive EIS & SEIS tax reliefs

Any investment in the Start-Up Series Fund places your capital at risk of total loss and will not be readily realisable. Tax treatment depends on individual circumstances and is subject to change. We recommend you take professional advice before investing.

GB Investment Magazine · Open Offers

EIS

SEIS

Open

Now

31.10.19

Amount to be Raised: £3.5m Minimum Investment: £20,000

Iron Box Capital: Alive in the Morning Ltd. Alive in the Morning Ltd. will develop, produce, finance and market a slate of unique, commercial films in the horror and thriller/horror genres. Horror is one of the most popular and pro table genres in a worldwide Filmed entertainment market that will be worth a forecasted US$104.62 billion a year by 2019. It is consistently commercially successful as people love to watch movies to be scared, whether at the cinema or at home. Horror is also one of the most international genres, as fear is universal, transcending cultural and geographical boundaries. Horror Films additionally can be made on low budgets and do not need star names to attract audiences, offering the potential for a significant return-on-investment. Advance Assurance has been given.

T. 07528616752 E. raimund@ironboxcapital.com www.ironboxcapital.com

SEIS Open

Now

Evergreen – multiple close dates

Amount to be Raised: £750K Minimum Investment: £10,000

Iron Box Film & TV seis channel in the Amersham SEIS fund The British Film Industry is growing, and is forecast to grow for years to come. This is fuelled by the global demand for films, through multi on-line channels, including Netflix and Amazon Prime. Iron Box’s team of experts has specialist knowledge across development, finance, production and marketing of film & television projects. As a company they are well positioned to capitalise on this growth market. The aim is to focus on the most profitable genres, where there is a clear target audience, and in using proven teams of people that have a track record of making profitable Film & TV shows. The Iron Box Film & TV SEIS Channel has been designed for UK tax payers who prefer to invest in a managed portfolio of independent filmed entertainment projects, whether for traditional films or television. There are likely to be around 4 films in each portfolio. The fund will finance projects that are commercial, with strong audience appeal, and suit the international marketplace.

T. 07528616752 E. raimund@ironboxcapital.com www.ironboxcapital.com

The companies will be SEIS eligible.

GB Investment Magazine Open Offers GB38 Investment Magazine · October· 2018

Open Offers

BR Open

June 2005

Evergreen

Amount to be Raised: Unlimited

Minimum Investment: £25,000

Octopus AIM Inheritance Tax Service Since 2005, the Octopus AIM Inheritance Tax Service has offered a fast and flexible solution to inheritance tax planning, while providing the potential for significant capital growth through investment into a portfolio of 20-30 companies listed on the Alternative Investment Market (AIM). As we only select companies which meet the requirements for Business Property Relief, the shares should become exempt from inheritance tax after just two years, provided they are still held on death. Our highly experienced Smaller Companies team manages £1.5 billion on behalf of 11,500 investors across the service.

T. 0800 316 2295 E. clientrelations@octopusinvestments.com

octopusinvestments.com

Portfolio companies are chosen after detailed research, which involves spending time with a company’s management team, evaluating its competitors and assessing its financial strength. Holdings are monitored on a day-to-day basis, with the team making investment decisions. The Octopus AIM Inheritance Tax Service is also available within an ISA wrapper. The value of an investment, and any income from it, can fall as well as rise and you may not get back the full amount invested. Tax treatment depends on individual circumstances and may change in the future. Tax relief depends on portfolio companies maintaining their BPR-qualifying status. The shares of smaller companies could fall or rise in value more than other shares listed on the main market of the London Stock Exchange. They may also be harder to sell. Issued by Octopus Investments Limited, which is authorised and regulated by the Financial Conduct Authority. Registered office: 33 Holborn, London EC1N 2HT. Registered in England and Wales No. 03942880. We record telephone calls. Issued: September 2018. CAM07427-1809.

EIS Open

Evergreen

Amount to be Raised: £15m+ Minimum Investment: £25,000

T. 020 3327 4861 E. EIS@hambroperks.com www.hambroperks.com

Hambro Perks Co-Investment Fund Hambro Perks helps outstanding Founders build world-changing businesses. The provision of permanent, patient capital from our own balance sheet means we are completely aligned with the long term goals and interests of the entrepreneurs and investee companies that we support. We aim to take early risk in businesses, investing where we can add significant value through applying and sharing the expertise our team has built over many decades’ combined experience of founding, building, internationalising and exiting companies. We believe we are the destination of choice for the very best entrepreneurs, and they actively choose us to support them as they build fast growth tech-enabled businesses. Our main areas of focus are education technology, digital health, insurance technology, digital media and fintech. The Hambro Perks Co-Investment Fund enables individuals to co-invest alongside and on a fully aligned basis with Hambro Perks, thereby benefiting from this extraordinary access and proprietary dealflow while utilising EIS reliefs. Please get in touch for more information.

GB Investment Magazine · Open Offers

EIS Open

Evergreen

Amount to be Raised: Evergreen Minimum Investment: £15,000

Downing Ventures EIS Downing Ventures EIS invests in high risk, high potential return investment opportunities with a principal focus on early-stage UK technology companies, while also providing access to attractive EIS tax reliefs. The teams invests across a variety of sectors, with a focus on enterprise software, health technology and e-commerce. Each of these young, growing businesses will be high risk with a significant chance of failure. However, the following factors should help to manage risk: • Diversification: investments are estimated to be spread across a portfolio of 10 - 15, where possible in a variety of sectors.

T. 07946 117770 E. Bill@Downing.co.uk www.downing.co.uk

IHT

Open

Evergreen

Amount to be Raised: Evergreen Minimum Investment: £25,000

• Due diligence: a high number of opportunities will be investigated before each investment is made. In 2018, the team reviewed around 100 companies a month. It’s anticipated that investors will be given the opportunity to exit their investments between four and eight years from subscription.

Downing Estate Planning Service Downing Estate Planning Service (DEPS) aims to preserve investors’ capital by focusing on two sectors: businesses trading from freehold premises and/or energy businesses. We believe these are lower risk than other tax-efficient sectors. DEPS is designed to offer full IHT relief on subscriptions after two years, by investing in a portfolio of businesses that qualify for business relief. The service has been designed with the following key features: • Targets capital growth of 4% per annum over the medium term (this is a target and not guaranteed).

T. 07946 117770 E. Bill@Downing.co.uk www.downing.co.uk

• Receive distributions (paid on a quarterly, six-monthly or annual basis). • Access to capital twice a month, with no charges or penalties on exit (subject to liquidity, Downing’s discretion and 10 days’ notice). Additionally, we offer two insurance policies for this service: • Downside protection cover (at no additional cost): covers the first two years (before the investment obtains IHT relief). It covers a loss in value of up to 20% on initial net investment on death. • Life cover (optional – at an additional cost): mitigates the effect of IHT for the first two years before IHT relief begins. It covers 40% of the original gross investment (which would be payable to HMRC) upon death within the first two years.

IHT Open

Evergreen

Amount to be Raised: Evergreen Minimum Investment:

£100,000

Downing AIM Estate Planning Service (DAEPS) Downing AIM Estate Planning Service (DAEPS) enables investors to own a portfolio of AIMlisted shares and is designed to offer full IHT relief on subscriptions after two years, by investing in companies that qualify for business relief. We aim to manage risk by spreading funds across at least 20 companies from different sectors on the AIM market. Other key features:

T. 07946 117770 E. Bill@Downing.co.uk www.downing.co.uk

• Downside protection cover (at no additional cost): an insurance policy that covers the first two years (before the investment obtains IHT relief). The policy covers 20% of any net loss in value on death under the ages of 90 years. • Ownership and control: allow investors to retain full ownership of the investments. • Capital growth: companies will be selected based on analysis on operational business, longevity of earning and alignment between management and equity shareholders. • Access: enable investors to withdraw capital from their portfolio at any time, subject to liquidity and 10 days’ notice.

GB Investment Magazine Open Offers GB40 Investment Magazine · October· 2018

Open Offers

IHT Open

Evergreen

Amount to be Raised: Evergreen Minimum Investment:

£100,000

Downing AIM ISA (DISA) Downing AIM ISA (DISA) gives investors the opportunity to invest in a portfolio of AIMquoted companies, combining IHT relief (after two years) with ISA tax benefits, by investing in companies that qualify for business relief. We aim to manage risk by spreading funds across at least 20 companies from different sectors. Other key features: • Downside protection cover (at no additional cost): insurance policy that covers the first two years (before the investment obtains IHT relief.) The policy covers 20% of any net loss in value of death under the ages of 90 years.

T. 07946 117770 E. Bill@Downing.co.uk www.downing.co.uk

• Ownership and control: allows investors to retain full ownership of the investments. • Capital growth: generate capital growth from the portfolio of investments. Companies are selected based on analysis of their operational business, longevity of earnings and alignment between management and equity shareholders. • Access: to enable investors to withdraw capital from their portfolio at any time, subject to liquidity.

EIS Open

Evergreen

Amount to be Raised: Uncapped Minimum Investment: £20,000

Symvan Capital Symvan Capital has an established and award-winning track record of growth-oriented investing. We invest in scalable and disruptive technology businesses – companies that seek to impact and change established business models or industries. We look for businesses with a unique proposition and the potential to deliver ten times our investment. Symvan scours the market to find founders with strong teams who have vision, drive and flexibility to deliver results within reasonable time frames. We fund, mentor and support them through to exit. We provide both management and expert advice from our own team and from our network.

T. 020 3011 5097 E. ml@symvancapital.com www.symvancapital.com

There are zero upfront or ongoing charges to the investor. We charge the investee companies instead. Therefore, investors can claim 100% of the EIS tax reliefs. The only fee Symvan eventually charges investors is a 20% performance fee, which is dependent on a successful exit. Consequently, Symvan is very exit focussed. We typically add no more than five to seven new companies to the portfolio per year, in line with our “deeper not wider” investment philosophy. We have £9.5 million remaining capacity for deployment pre 5th April 2020, targeted across up to 12 companies. Guaranteed carry-back to 18/19 for subscriptions received prior to 5th April 2020.

EIS Open

Evergreen

Amount to be Raised: N/A Minimum Investment: £25,000

Vala EIS Portfolio The Vala EIS Portfolio invests in companies selected and mentored by a group of serial entrepreneurs, with a long track record of creating, building and successfully selling companies. We focus our investments on the sectors we know best, where our expertise and networks can make a valuable impact on the progress of our portfolio companies. This includes digital media and entertainment, engineering, fintech, leisure, and food & beverages. Investors will acquire shares in 6-10 companies, with an overall target return of 2x and expected holding period of 3-5+ years. Portfolios usually include both pre-revenue and post-revenue companies, and new and follow-on investments.

T. 0203 951 0590 E. info@valacap.com www.valacap.com

We charge no initial or annual management fees to investors. Our costs are covered by a 6% fee charged to investee companies, and we earn a performance fee of 20% of profits from successful exits. Investments are completed in tranches, so subscriptions can be quickly deployed and investors can learn about the companies we plan to invest in before subscribing. Our next tranche is scheduled for before the end of the 2019/20 tax year, giving eligible investors the option to carry back tax reliefs to 2018/19.

GB Investment Magazine · Open Offers

EIS Open

July 2019

June 2020

Amount to be Raised: £20m Minimum Investment: £50,000

Calculus EIS Fund Pioneers of tax efficient investing, Calculus Capital created the UK’s first approved EIS Fund in 1999. Our 20 year track record of investing in growing UK companies assures investors of our ability to make sensible investments capable of delivering excellent returns at every stage of the economic cycle. Calculus has won multiple awards, including EISA’s ‘Fund Manager of the Year’ five times, and ‘Best EIS Investment Manager’ at the Growth Awards, most recently in November 2018. Calculus are recognised as having an incredibly robust investment process and an active portfolio management style - which has led to an impressive track record of successful exits. The Calculus EIS Fund focuses on established companies with growth potential, across a diverse range of sectors. An investor can expect a portfolio of at least 6 companies with the following characteristics: • The ability to achieve our target IRR of 20% • Experienced management teams • Successful sales of proven products or services

T. 020 7493 4940 E. info@calculuscapital.com www.calculuscapital.com

• Profits or a clear path to profitability • Clear route to exit Calculus’ investment strategy is exit led, with a key focus on delivering strong returns to investors. The target 18 month deployment commences after the relevant closing date. Calculus value their reputation for client service as much as their investment record, and are focused on building long standing relationships with both clients and advisers. Please get in touch to find out more on 020 7493 4940 or info@calculuscapital.com.

EIS Open

June 2019

June 2020

Amount to be Raised: £20m Minimum Investment: £10,000

UK Creative Content EIS Fund The UK Creative Content EIS Fund, in association with BFI, will invest in a new generation of EIS qualifying UK creative content companies within a diversified growth focused portfolio. Calculus Capital is the fund manager bringing a wealth of experience investing in growing UK companies over the past 20 years. Stargrove Pictures is acting as strategic adviser for the Fund, having overseen £1bn+ of investment in the sector. Together, Calculus and Stargrove create a ‘best in class’ combination which the BFI selected after a rigorous selection process. UK content companies already have an established track record of creating high quality content watched by millions worldwide. Technology is changing the way we consume creative content, evidenced by the significant growth of subscription video-on-demand (SVOD) services such as Amazon and Netflix, who are reported to be spending almost $15bn on content. Together with the more traditional broadcasters and distributors, this has created a highly competitive landscape and an ever-increasing global demand for exciting original content. The Fund is well placed to capitalise on this unprecedented growth in demand.

T. 020 7493 4940 E. info@calculuscapital.com www.creativecontenteis.co.uk

An investor can expect a portfolio of at least 6 companies with the following characteristics: • Proven experience in developing and producing commercially appealing projects • Existing development slate • Excellent talent connections • Commitment to diversified multi-platform strategy • Experienced entrepreneurial management teams The Fund is targeting deployment over 15 months with a target return of 2x on monies invested. Calculus value their reputation for client service as much as their investment record, and are focused on building long standing relationships with both clients and advisers. Please get in touch to find out more on 020 7493 4940 or info@calculuscapital.com.

GB Investment Magazine Open Offers GB42 Investment Magazine · October· 2018

Open Offers

EIS Open 2012

Close Evergreen

Amount to be Raised: No maximum

Minimum Investment: £20,000

Par Syndicate EIS Fund Par Equity is an award-winning EIS Fund Manager, investing in innovative, high growth potential technology businesses across the UK. We harness the expertise and contacts of our Par Syndicate and wider investor network to create a distinctive, operationally focused investment model that benefits both investors and entrepreneurs. Our investor network provides unrivalled access to the right people at the right time, who enhance our deal flow, improve our due diligence, fine tune business models and guide the entrepreneurs through to exit. Entrepreneurs recognise Par Equity as an added value investor, which is reflected in our strong flow of investment opportunities. Strategy for the Fund: • Focused on early stage technology companies with high quality management teams addressing global markets

T. 0131 523 1057 E. pauline.cassie@parequity.com www.parequity.com

• Co-investing with experienced angel investors who add value to portfolio companies at each stage through to exit • Target portfolio of 7 - 8 investments • Target deployment within 12 months • Expected holding period of 5 - 7 years with a benchmark IRR of 15% Experience and track record of the Fund Manager: • Award-winning investor • 10-year track record • 53 investments made • £128m deployed • 14 realisations achieved: • 3.2x multiple (before tax relief) • 26% blended IRR • 3.6-year average holding period

EIS/SEIS Open January 2019

Close Quarterly Closings

Amount to be Raised: £10m

Minimum Investment: £25,000

E. invest@o2h.com www.o2hventures.com

The o2h therapeutics and AI fund The Britain’s first S/EIS investment fund backing biotech therapeutic and related AI opportunities has made 10 Investments into biotech therapeutics and AI companies since its launch at the beginning of 2019. o2h ventures look for companies with great science that have potential to be developed towards a collaboration or exit. It is fund manager’s belief that what happened in Tech over the last 10 years is being replicated in Biotech with large pharma seeking to collaborate and acquire innovative small biotech companies. o2h ventures are also privileged to invest into a sector in which they can not just make a commercial return but also work on projects that benefit society. The team at o2h group have access to some of the most exciting ideas through its live grass roots working relationships fostered with entrepreneurs and scientists over many years giving it far earlier access than competitors to the most promising companies. In 2019, the o2h therapeutics and AI fund was nominated as the Best New Entrant in the Tax Efficiency Award by Investment Week and was the finalist for Impact Awards in the 25th Year EISA Awards. Sunil Shah, the fund manager, is on the Board of the Biotech Industry Association, Cambridge Angels and received the 2019 UKBAA Angel of the Year award.

GB Investment Magazine · Open Offers

EIS

SEIS

Open

May 2019

Evergreen – Bi-annual tranches

Amount to be Raised: £5m Minimum Investment: £10,000

Jenson SEIS & EIS Funds 2019/20 Applying a very structured sector agnostic investment approach, the SEIS Fund targets exciting, innovative and disruptive technologies which qualify for SEIS investment, where we typically invest the full allowable amount of £150,000 per company. The investee companies are then nurtured via the Investee support programme, which provides financial and operational assistance to enhance returns, a key differentiator between Jenson and other SEIS and EIS fund managers. The EIS Fund is utilised to provide follow-on funding to fully exploit commercialisation of a proven business model. Specifically, the EIS Fund will concentrate on the best of the existing portfolio but will always be benchmarked relative to new external company opportunities. Having access to an extensive and existing SEIS portfolio enables follow on funding at a fair price.

T. 020 7788 7539 E. invest@jensonfunding.com www.jensonfundingpartners.com

EIS

SEIS

Open

Evergreen

Amount to be Raised: N/A Minimum Investment: £5,000

Jenson Funding Partners has been investing since 2012 and has made over 100 investments, with six exits from its first two funds. To date the SEIS Fund has invested over £13.5 million and the EIS Fund, combined with the syndicated investors, has invested over £6 million and raised over £5 million of debt facilities.

GrowthInvest - The Tax Efficient Platform for Advisers GrowthInvest is a unique, independent platform which provides access to tax efficient investments to a growing network of UK financial advisers, wealth managers and investors. Originally founded by financial advisers in 2012 as the Seed EIS Platform, we rebranded as GrowthInvest in October 2016 to better reflect the wider range of products and services available: We permit investment into a range of single company offers, as well as Managed EIS Portfolio Services and funds, giving clients a number of different investment options. • We offer a simplified asset transfer process which allows advisers to place all of their clients’ tax efficient investments onto the platform. • We provide intuitive online reporting tools, allowing advisers to monitor, analyse, and provide consolidated performance updates and quarterly reports to their clients.

T. 020 7071 3945 E. enquiries@growthinvest.com www.growthinvest.com

• All investable companies go through one of 3 defined due diligence tiers, giving added peaceof-mind to the adviser. • A single, secure online environment for all clients to review and build their tax efficient investment portfolios. We’ve placed the adviser at the heart of everything we do, making it straightforward for advisers to improve the service they offer to their clients in the tax efficient investment arena. Please visit us at growthinvest.com for more details about our current open investment opportunities.

EIS Open

Now

Evergreen

Amount to be Raised: N/A Minimum Investment: £5,000

Access EIS Access EIS tracks performance data of over 1,000 active startup investors. It then selects and co-invests with some of the best-performing “super angels” with the aim of replicating their collective success. The fund aims to diversify your investment across at least 50 super-angel-backed startups to minimise risk and capture as many potential “blockbusters” as possible. As an EIS fund, eligible investors could benefit from generous tax relief on their investment into Access EIS. SyndicateRoom’s dashboard aims to make light work of EIS paperwork with easily downloadable summaries that can simply be attached to an HMRC self-assessment tax return.

T. 01223 478 558 E. contactus@syndicateroom.com www.syndicateroom.com

With investments, your capital is at risk. SyndicateRoom and Access EIS are targeted exclusively at sophisticated investors who understand these risks. This message has been approved as a financial promotion by Syndicate Room Ltd, which is authorised and regulated by the Financial Conduct Authority (No. 613021). It is not a recommendation to invest and does not constitute advice. Tax relief depends on an individual’s circumstances and may change in the future. If unsure, seek advice. Syndicate Room Ltd is registered in England and Wales. Number 07697935. Registered office: The Pitt Building, Trumpington Street, Cambridge CB2 1RP

GB Investment Magazine Open Offers GB44 Investment Magazine · October· 2018

Open Offers

EIS Open

15th Dec 2014

Evergreen

Target Raise: Evergreen Minimum investment: £15,000

Committed Capital Growth EIS Fund Committed Capital is an investment management and corporate advisory business founded in 2001. • Investment Methodology - Focus on maximizing growth in companies with the injection of human capital to assist leading entrepreneurs develop their business to its full potential. • Investment Strategy - Post-revenue (£1m+), growth stage UK based technology companies across a number of sectors. Companies must have multiple client contracts in place, solid pipeline of sales, proven management and robust and demonstratable growth strategy. • Diversification - Investors will have between 8-12 companies in their portfolio with HMRC advance assurance in place.

T. 020 7529 1365 E. glen.stewart@committedcapital.co.uk www.committedcapital.co.uk

• Deployment • Target return

- Funds typically deployed within 12 months.

• Minimum investment

- 2-3x ROI*

- £15,000

Track record Since 2001 the team have achieved an average 2.35x ROI* with an average holding period of 4 years. The funds have deployed £42.5m (as at August 2019), had two profitable partial exits and most recently a whole exit that completed on 31 July 2019 with a 2.71x ROI*. Outside of the current funds, Committed Capital has deployed £36.8m across 18 other EIS qualifying companies and has exited all of these achieving 17 profitable exits with just 1 partial failure. * - (excluding any tax reliefs)

EIS Open

31st January 2019

Evergreen

Amount to be Raised: Uncapped Minimum Investment: £20,000

or £5,000 under the future investors scheme

T. 0785 091 5378 E. sanjeev.gordhan@newable.co.uk www.newable.co.uk

VCT Open

September 2019

Close August 2020

Amount to be Raised: £10m Minimum Investment: £5,000

Newable EIS Scale-up Fund 3 The fund seeks to leverage Newable’s unique corporate infrastructure and the extensive ecosystem built by Newable and London Business Angels over the last 35 years. Bringing together some of the best entrepreneurs, partners and investors to invest in and help scale potentially high-growth ventures. We target the funding gap that exists for ventures which have partially de-risked their technology, developed traction with customers and who now seek funding to scale their commercial operations. The fund aims to provide investors with a diversified portfolio of 7-10 EIS qualifying investments per subscription, across our key sectors; SpaceTech, Healthcare, Automation and Electronics. The Newable Investment Committee has over 100 years of combined investment experience with a track record of making successful investments across the innovation and technology space. “Capital at Risk. Learn more about these risks. Tax advantages are dependent on individual circumstances and subject to change. This article has been approved as a Financial Promotion by Larpent Newton & Co Ltd (FRN 141275). Newable Ventures Limited (FRN 795277) is an Appointed Representative of Larpent Newton & Co Ltd. Larpent Newton & Co Ltd is authorised and regulated by the Financial Conduct Authority.”

Calculus VCT Calculus Capital have a strong track record for investing in established, unquoted UK companies. Our experienced investment team and thorough investment process have produced impressive dividend performance and exit returns for investors. By co-investing in selected established companies through both VCT and EIS, Calculus are able to choose larger companies and bigger deals - reducing the risk profile of the investment. The Calculus VCT has the following characteristics: • Targets an annual dividend of 4.5% of NAV • Income tax relief of 30%, tax-free capital gains and dividends • Diversified portfolio, targeting 30 qualifying companies • Share certificates issued 10 days after allotment • Allotments available in both 2019/20 and 2020/21 tax years • Monthly standing order option available • Target 5% discount in respect to share buyback after 2020

T. 020 7493 4940 E. info@calculuscapital.com www.calculuscapital.com

The top up offer will be used to both invest in new companies with growth potential and provide further funding to a number of portfolio companies. Calculus value their reputation for client service as much as their investment record, and are focused on building long standing relationships with both clients and advisers. Please get in touch to find out more on 020 7493 4940 or info@calculuscapital.com.

GB Investment Magazine · Open Offers

EIS Open

Evergreen

Amount to be Raised:

£20 million

Minimum Investment:

£20,000 (£15k if both spouses)

T. 0207 927 7465 E. Enquiries@endven.com www.endven.com

EIS Open

Evergreen

Amount to be Raised:

c. £30m

Minimum Investment:

£25,000

Endeavour Ventures Managed Portfolio Service Building on our successful track record in growth EIS investing since 2005, Endeavour’s new Portfolio Service has been designed to provide many of the advantages of a managed EIS fund, but with better flexibility and no initial or annual fees for investors. Total fees are kept low, and clients receive 100% EIS relief on the money we invest. Endeavour builds each client a diversified portfolio of companies across technology sectors that we know and understand. We focus on enterprise software, property and legal technology related platforms, cloud-based software delivery, workforce management and optimisation, data management platforms, and we have developed expertise in payments, FX and in fintech. We also diversify across stages of development, we seek out companies that are showing increasing customer traction, and many of our investments are into maturing businesses wishing to expand. The number of investments held by a client increases over several years tax years to give optimum diversification. The objective is to enable clients to consistently benefit from EIS reliefs against tight deadlines while providing a base case return on capital of 1.6x to 2x over a 5 year period. This is against Endeavour’s 12 year audited cash to cash track record of 6.1x cost. Our investment team understands growth investment complexities and timeframes. We have the right combination of skills for due diligence, investing, assisting and monitoring portfolio companies, and for exiting investments. We know that growth investing requires resilience over a number of years, and therefore forge strong partnerships between management teams and our own team members, that endures throughout the course of the investment cycle and on to exit. The most recent portfolio exit was Blue Prism Group Plc, providing Endeavour’s investors with a return of 150x and securing the EISA’s 2017 Best Exit of the Year.

MMC Ventures EIS Fund Invest in the UK’s fastest growing technology companies • Performance: In the last 24 months, MMC has delivered five positive exits returning an average of 2.7x to investors. • Experience: MMC has been backing the UK’s fastest growing tech companies for 19 years, making them one of the most experienced managers in the EIS space. • Commitment: More than £11 million has been invested by the MMC founders and team alongside its investors, on the same terms.

T. 0207 361 0212 E. invest@mmcventures.com www.mmcventures.com

Investors in MMC’s EIS Fund can expect deployment over a 12-18 month period in a diversified portfolio of c. 10 companies. The Fund targets a 2-3x return over a 4-8 year holding period.

GB Investment Magazine Open Offers GB46 Investment Magazine · October· 2018

PEOPLE LIKE TO BE SCARED

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You can invest in a portfolio of films Call Iron Box Capital now on 020 7628 7857 or email raimund@ironboxcapital.com

Serious Investment Serious Entertainment www.ironboxcapital.com

How does the challenge of developing transformational apprenticeships lead to long term income for your clients? Unlike other traditional venture investment products, Triple Point’s Venture Fund looks to maximise shareholder returns by identifying specific challenges faced by established corporates and then matching them with high-potential startups that are best placed to solve them. Why? Because it helps to reduce risk, transform lives and maximise growth.

Maximising Financial Returns by Solving Real-Life Challenges This investment carries all the risks of investment in smaller companies and places investor’s capital at risk. There is no guarantee that target returns will be achieved, and investors may get back less than they invested. Tax rules and reliefs depend on individual circumstances and are subject to change.

020 7201 8990 contact@triplepoint.co.uk

VENTURE FUND

www.triplepoint.co.uk

This financial promotion has been issued by Triple Point Administration LLP (“TPAL”), which is authorised and regulated by the Financial Conduct Authority (FCA) in the United Kingdom (with firm reference number 618187). Triple Point is the trading name for the Triple Point Group which includes the following companies and associated entities: Triple Point Investment Management LLP registered in England & Wales no. OC321250, authorised and regulated by the Financial Conduct Authority no. 456597, Triple Point Administration LLP registered in England & Wales no. OC391352 and authorised and regulated by the Financial Conduct Authority no. 618187, and TP Nominees Limited registered in England & Wales no.07839571, all of 1 King William Street, London, EC4N 7AF, UK

The Future is Now | GBI 18 | February 2020

Articles inside

WHEN THE ADVISERS MET THE EIS FUND MANAGERS

Industries to watch in 2020

“SUCCESS IS NOT FINAL; FAILURE IS NOT FATAL: