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FOR PROFESSIONAL INVESTMENT SPECIALISTS

M AGAZINE

THE END OF A TA XIN G YEAR GB Investment Magazine · Dec|Jan 2018 1 GOVERNMENT BACKED - GREAT BRITISH INVESTMENTS - EIS - SEIS - BR - SITR - VCT


CONTENTS

CHAPTER • 1 5 - 10 News

A round up of industry news

CHAPTER • 2 11 - 13 SEIS in Action

Our Editor looks at how SEIS has worked in practice and highlights a few examples

14 - 19 Tax Year End Special Feature

In the run up to TYE 2020 we take a look at a some EIS funds which you may find of interest

20 - 21 Covid 19 – o2h Ventures Perspective

The early stage EIS and/or SEIS investment fund-backing biotech therapeutic and related AI opportunities, speaks to vaccine professionals

22 - 25 Snapshot – Focus on ARIE Capital Technology EIS

Stephen Margolis Chairman and Founding Partner of ARIE Tech LLP is in conversation with our Editor

24 - 27 Spotlight on the Vala EIS Portfolio

Jaspar Smith, CEO at Vala Capital explains their USPs and shares his passion for business

28 -31 Report from the VC Front Line

Glen Stewart, Head of Intermediated Capital Raising at Committed Capital gives readers his insights on investee selection, risk mitigation, success rates and much more

CHAPTER • 3 32 - 33 Praetura Ventures

We talk to David Foreman, Managing Director and Jon Prescott, Business Development Director about their portfolio team approach and their successes

34 - 36 We need to talk about Risks

Building client confidence in EIS by helping them understand the risks involved, James Faulkner, Director of Vala Capital, gives us his detailed insights

CHAPTER • 4 37 - 51 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.


Did somebody break a mirror?

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o I thought we’d done quite well to come out more or less smiling after the 2016 referendum, sundry General Elections and years of Brexit dithering.

Then along comes Covid-19; an unprecedented predicament for every single human being on the planet. So thanks a lot, Fate. But we all soldier on regardless, so welcome to GBI Magazine 19. In it, you’ll find evidence that creativity and innovation are still thriving in the UK; indeed, I feel certain that the impetus to overcome the current difficulties will be generated by a cohort of entrepreneurs from the private sector. You’ll hear from James Faulkner, a Director at Vala Capital who discusses how to build your clients’ confidence in EIS by helping them understand the risks involved. The CEO of Vala, Jasper Smith, has overall responsibility for Vala EIS Portfolio’s deal flow and mentoring services; he gives us a behind-the-scenes tour. Stephen Margolis, Chairman and Founding Partner of ARIE Tech LLP, tells us what makes him and his company tick.

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Glen Stewart of Committed Capital shares his thoughts on investee selection, risk mitigation, success rates, portfolio diversification and fees. Cradle of the industrial revolution and historically home to some of Britain’s finest manufacturing enterprises, all too often the North is patronised or even ignored by the South-centric media. But there is creativity and talent there in abundance, which is why some of the smart money, such as the Praetura EIS Growth Fund, is heading that way. You’ll also find articles from our website that you have missed over the last month or so, along with our regular features on New Entrants and Open Offers. In the meantime, do take every care to keep yourselves, your families and your colleagues as safe as you can. Wishing you all the very best,

GBI

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


News

ARIE investee Eyesight Technologies drives SEAT road safety innovation ARIE Capital Technology EIS funds AI breakthrough

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ars that scrutinise the face of their drivers could soon be built as Seat develops a system that tracks eye openness, angle of vision and head position to see if they are falling asleep. SEAT has partnered with Israeli firm Eyesight Technologies on the tracking feature, which uses cameras and sensors combined with AI to monitor the driver’s alertness. Eyesight Technologies’ alertness algorithm also detects when the driver is distracted by a mobile phone. The technology can identify the driver from previous trips and adjust the seats, mirrors, heating settings and other cabin features automatically.

Eventually, the software will also be able to detect pedestrians and analyse whether the driver is aware of them. Stefan Ilijevic, the head of product innovation at SEAT, said: ‘In total more than 90 per cent of the road accidents in Europe are caused by human factor. ‘The main reasons include distraction and tiredness, excessive speed and alcohol and drugs. ‘At SEAT we are working on solutions to prevent negligence behind the steering wheel and significantly reduce road accidents. ‘We partner with some of the world’s brightest companies on important technology to save lives, since our long-term vision is a world with zero accidents.’ GBI

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Raindog Films strengthens its film production business and expands into TV content

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he UK Creative Content EIS Fund has invested in Raindog Films, the UK-based production company cofounded by Oscar®-winning actor Colin Firth and music industry veteran Ged Doherty. The announcement was made by the Fund’s manager, Calculus Capital, and Stargrove Pictures. Writer and producer Trish D Chetty joins the newlook company to oversee the strategic expansion into high-end small screen content. Firth and Doherty established Raindog Films in 2012 and subsequently produced an awardwinning slate of premium filmed entertainment. Recent projects include Official Secrets directed by Gavin Hood, starring Keira Knightley and Matt Smith, which opened to critical acclaim; Loving, directed by Jeff Nichols and starring Joel Edgerton and Ruth Negga for which she earned an Oscar® nomination and Eye in the Sky, directed by Gavin Hood and featuring Helen Mirren and Aaron Paul. The new investment will facilitate Raindog Films’ ambitious plans to expand into TV drama, music content and documentaries. Writer/producer and

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award-winning researcher Trish D Chetty joins Colin and Ged to implement the company’s growth plans and commitment to identify new writing, directing and production talent. Colin Firth said: “The BFI works tirelessly to champion and support independent film and the wider UK screen industries, creating opportunities to train and develop new talent, to discover new voices and to ensure the highest ethical standards. We are delighted to receive investment from the UK Creative Content Fund which, although it operates independently, was an initiative of the BFI and its board” Ged Doherty added: “We value our independence more than anything and this investment will allow us the freedom to develop little known extraordinary stories and to help them find a global audience with the right partners. We are thrilled that Trish is joining us as she will bring a fresh perspective to everything we do.” Commenting on her appointment and new role Trish D Chetty said: “I have always admired the films that Raindog make, each one of their films


News

is bold and ambitious and the diversity of their work speaks for itself. I am excited to be joining Colin and Ged at this key stage of the company’s development.” Stargrove Pictures, whose team have overseen over £1bn of investments in the creative industries, was instrumental in identifying the opportunity to invest. As part of the deal, Stargrove Pictures CEO Stephen Fuss will join the board of Raindog Films. The UK Creative Content EIS Fund is run by private equity house Calculus Capital, which launched the UK’s first approved EIS fund over 20 years ago, with film/TV finance specialists Stargrove Pictures. It was launched last year in association with the British Film Institute (BFI), which as a charity has no financial interest in the fund but initiated the project to help UK producers exploit the growing opportunity fuelled by the rise of new era broadcasters like Netflix, Amazon and Apple. John Glencross, Chief Executive at Capital, said: “Colin, Ged and Trish powerful and incredibly talented team. has already established itself as a

producer of important films. We were particularly attracted to the team’s commitment to strong story telling in both drama and documentary. They have impeccable connections, which means they can attract the best actors, writers and directors, which is fundamental to the success of the projects they’re working on and ultimately to the business.” Stephen Fuss, CEO of Stargrove Pictures added: “What’s exciting about this deal for us is the expansion into TV and the plans to leverage Ged’s music industry experience and Trish’s ability to seek out and tell strong factual stories. The appetite and market for quality content has never been stronger, and there’s a particular interest at the moment in music-focused films and documentaries. When you see the calibre of the productions Raindog has in the pipeline already, and the names attached to them, you’ll understand why we’re so excited about this investment.” GBI

Calculus form a Raindog leading

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GBI Magazine partners with EISA to spread the tax-efficiency gospel Exclusive strategic programme to bring IFAs, SMEs and tax efficient fund providers closer

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s our regular readers will know, we are a campaigning magazine for the financial adviser community, with the objective of changing the narrative about EIS, Seed EIS, VCT and BR investments. We are the only magazine of its kind for the investment community. EISA is the official trade body for the Enterprise Investment Scheme; it is a highly effective not-forprofit organisation whose core aim is to help small and medium-sized enterprises (SMEs) obtain the funding they need to grow their business and help drive the UK economy forward. Throughout 2020, we will be joining forces to offer advisers greater education and insight into EIS, and to assist EISA in their SME support mission, building on an already successful series of round tables. You can read and download the previous round table supplements at the links below: GBI | EIS Round Table London | March 2020 GBI | EIS Round Table | November 19 EIS Round Table | GBI | September 2019 Together we will host a series of Round Table discussions around EIS throughout 2020 to promote the principles of the scheme and to help build direct IFA relationships. Each 1-2 hour session will see industry experts discuss a set theme, with input and interrogation from advisers, entrepreneurs and other interested parties.

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This format enables in-depth focused discussion on the issues (mutual and exclusive) facing both advisers, entrepreneurs and providers. The finishing touches are currently being put to the programme, but topics are expected to include: • EIS, education, platforms, due diligence • Reasons for recommending EIS – tax planning (non-IHT), IHT planning, diversification/risk • Concerns when selecting EIS: investment risk, lack of liquidity, exit risk • Preferred sectors: technology, general enterprise, industry and infrastructure, pharma and biotech • New Entrants • VCTs Alex Sullivan, Managing Partner of GBI Magazine commented: “We have always worked closely with EISA, but I’m delighted that this partnership formally cements our mutual commitment to the extraordinary wellspring of creative entrepreneurship that exists, and always has existed, in the UK.” Director General of EISA Mark Brownridge added: “We’re excited at this partnership with GBI Magazine and we look forward to broadcasting the EIS message even louder, to the benefit of advisers, SMEs and the overall economy alike.” GBI


News

Help for IFAs to source EIS & SEIS opportunities for their clients Some of the questions advisers ask Worth Capital most often How does Worth Capital hunt for potential investments?

due diligence before their decision to invest from the Fund.

Each investment is a monthly winner of the StartUp Series. This is a competition run by us and promoted by startups.co.uk, not surprisingly the ‘go-to’ place for start-up businesses looking for advice. With over 400,000 monthly users, the competition attracts an average of over 95 entries per month.

The Start-Up Series Fund is structured as an alternative investment fund (AIF) for the purposes of the Alternative Investment Fund Managers Directive (AIFMD), making investments in Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) qualifying companies. An advisor can direct a client’s investment to either SEIS or EIS investments. The investments themselves are made at the discretion of the Fund Manager.

The Series is promoted across the UK, so attracting entrants from well beyond the ‘old boys’ network and London-centric investment bubble, which see funders fighting over a small pool of opportunities – which can lead to inflated valuations. This wide and diverse deal flow is then assessed through six stages to distil down to one winner. Who decides on the investments to be made? The Start-Up Series distillation process is conducted principally by the two co-founders of Worth Capital, experienced entrepreneurs with expertise in brand, marketing, retail and innovation. The process takes six weeks and gets progressively more intense for the entrepreneurs. It includes half a day with each of the finalists, digging deep into the business proposition, strategy, plans, financial projections and the strength of the team. A winner is recommended to Amersham Investment Management, who then conduct additional technical

How are sensible valuations agreed for investors? Before getting to the final stage of the competition, we agree a fair valuation with each finalist in the event an investment is made. It will reflect the risk for investors, the progress made so far and the need to keep the founding team motivated through (the usually inevitable) subsequent funding rounds. We benchmark using tools such as Beauhurst and from having our ears to the ground on many private fundraises. As part of the final half day together the entrepreneurs get to understand the value of having Worth Capital involved, which helps them to maintain perspective on valuations we suggest. Having access to a deep well of deal flow, quality businesses and offering real help to the start-ups we talk to means we are in a strong negotiating position.

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We don’t find ourselves backed into a corner and agreeing valuations just to get a deal done.

How will you put my clients’ money to work quickly?

How will my client’s interests be diversified across companies and sectors?

We are aware that advisers have been frustrated by SEIS and EIS funds not deploying funds quickly enough, and in some cases not even in the same tax year. Because of our ‘competition funding’ approach and how it generates a wide and high quality deal flow, the Fund is never short of attractive investment opportunities. We are keen to put your clients’ cash to work quickly and have a record of making regular investments during the year (we aim for 3 SEIS and 3 EIS tranches of investment each year).

Investing in start-ups is inherently high risk, so no investor should invest in just one or two businesses. The Fund is invested in tranches, with each tranche designed to make three to six investments. So each investor immediately has a ‘mini-portfolio’ to diversify risk, and if invested across a whole year, they could end up with a portfolio of 12 plus investments. The Fund is not focused on any particular sectors, and covers both consumer and B2B businesses. It is not focused on technology and so avoids the hype (and crash) for or against particularly technologies or tech sectors. The common threads for companies supported by the Fund are under-served and/or growth markets; innovation; the ability to create habitual consumption and therefore to build loved brands (which is important to maximise exit value for investors). Therefore the investments do end up highly diversified across sectors. In addition, it is always Worth Capital and the Fund Manger’s intention to create diversification within each tranche of investment across consumer & B2B and to some extent between different maturity of SEIS or EIS businesses (within the confines of HMRC’s parameters for SEIS & EIS).

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How quickly will we receive tax certificates? For your client to claim their income tax relief, they will need their SEIS3 or EIS3 certificate from HMRC. It amazes us that these certificates often take many months to be received from some funds. We appreciate that this causes problems for advisers. We also think being tardy with these certificates is a sign of poor customer service. We have designed a simple process that we manage carefully and quickly, and have a record of getting certificates to investors within one to two months from the date the fund makes the investment. GBI


SEIS in action - GBI explores

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egular 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. The 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). 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 few examples. Sentric Music/Nova Sentric Music was one of Nova’s first investments, supporting the Liverpool based ‘music tech’ startup 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. 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 indepth 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

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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. 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

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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: “SEISPlus” While a handful of specialist funds have sought to adopt a ‘pure’ SEIS approach, the current investment 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.

MVP, add functionality and build stock levels whilst pursuing target ongoing revenues of £1.3m p.a. in 2021 at gross margins of 50%. 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. 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

The SEIS/EIS financing was implemented to allow the Company rapidly to recruit skills, finalise the

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FEATURE

Tax Year End Special This time of year can often get a bit frantic; 2020 is no exception, especially given the unprecedented situation we find ourselves in. So, we canvassed some of our colleagues in this sector to find out if they or their associates had any deployment capability still available and they sent us the following updates for you.

COMMITTED CAPITAL GROWTH EIS FUND In the run-up to TYE 2020, we take a look at a few EIS funds which you may find of interest

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ommitted Capital is an investment management and corporate advisory business founded in 2001.

They focus on maximizing growth in companies with the injection of human capital to assist leading entrepreneurs develop their business to its full potential. The Committed Capital EIS Growth Fund is a managed portfolio service for individuals seeking a portfolio of tax-efficient investments. The Fund invests in UK-based smaller companies, one of the most dynamic and potentially highest returning sectors of the market, and a core area of expertise at Committed Capital. Committed Capital aim to deliver strong returns irrespective of any tax benefits through the EIS structure.

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Target investees are 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. To ensure diversification, investors will have between 8-12 companies in their portfolio with HMRC advance assurance in place. All funds can be deployed this TYE if deposited by March 31st* with a target return of 2-3x ROI**. There is an investment threshold of a minimum £15,000. TRACK RECORD Since 2001 the team have achieved an average 2.4x ROI** with an average holding period of 4 years.


The funds have deployed £48m (as at January 2020), 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. * – (across a portfolio of 4-5 companies) ** - (excluding any tax reliefs)

You can request an Information Memorandum here, or contact Committed Capital via: T. 020 7529 1365 E. glen.stewart@committedcapital.co.uk W. www.committedcapital.co.uk

GBI

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FEATURE

IW CAPITAL INTRODUCE THEIR TYE OPPORTUNITIES IW Capital is a small-cap PE house which has been specialising in EIS investments in the Growth space since 2010 with AUM of £60m across circa 40 companies and through investment by a book of 500 High Net Worth individuals. IW is due to have first exits shortly and since 2013 have had no failures.

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he IW Capital EIS Portfolio Service was launched in August of 2019 and has already taken £1.5m into the service with further commitments of £1.5m. We believe the service is different from other offerings in the market and is simple and transparent and underpinned by extremely thorough processes. One of the key aspects to the service is the speed of deployment and IW currently have 4 opportunities available for those requiring allocation before 5th April 2020 for carry-back purposes. The IW Capital EIS Portfolio Service is innovative whilst combining simplicity and full transparency and offers the following key highlights: •

Investment into growing UK SMEs across diverse sectors that can demonstrate growth potential and strong management through an established Growth EIS provider

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• Co-investment with a network of over 500 highly experienced private clients • Robust diligence and ongoing monitoring processes coupled with strong administrative processes and an innovative reporting platform • Evergreen service - available all year round with regular allotments • Non-UCIS • Two routes to entry: Self-Select for investors looking to select their own investments – minimum investment per company £10,000 Investment Management Facility where discretion is taken on behalf of investors based on selected portfolio allocations and timings – minimum entrylevel £10,000 to the service with a minimum diversity of 4 companies


• Targeted allocation of 5 investee companies within a 12-month period. • Investment Term 5-7 Years. • Target cash return of 3-5x multiple of net cost per investee company. • EIS3s available 45-90 days post allotment (subject to HMRC timings) • Simple, transparent fee structure. • HMRC Advanced Assurance received on all investee company’s pre-allotment. • Accredited CPD Certification through the CPD Certification Service. We are currently engaged with Martin Churchill, Allenbridge and the MiCAP review is now available on their website using the following link: www.micap.com/review/641

GBI

GB Investment Magazine · April 2020

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FEATURE

FOCUS ON TYE Nova Growth Capital introduces its portfolio of SEIS/ EIS growth focused technology companies

T

he Nova Cofoundery SEIS/EIS Fund allows you to co-invest alongside Nova. Our approach has resulted in growth at an average of 83% year on year for 10 years. This level of growth combined with available SEIS and EIS tax reliefs targets investor returns in excess of £5 for every £1 invested. ENGINEERED OUT RISK 46% of Nova’s startups live beyond 3 years - over 5 times more than the industry average in the UK. GROWTH Portfolio value growth in excess of 80% year on year compared to the Compound Annual Growth Rate (CAGR) market average of 34% (Syndicateroom)

OPPORTUNITY Since 2008 Nova has invested in over 70 companies and the value of this portfolio has grown at 83% year on year [i]. Now, for the first time as a private investor you can invest in the Nova Cofoundery SEIS and EIS Fund. In doing so you are investing alongside Nova in our Cofoundery portfolio. Along with benefiting from the many years operating experience accumulated by the Nova team, you can also look to benefit from tax relief available to UK investors through investment in SEIS and EIS qualifying companies. [i] Based on data from April 2018 DEAL FLOW

DIVERSIFIED PORTFOLIO

Nova have spent the last 10 years developing the Nova Cofoundery model. Last year Nova reviewed over 1,600 applications before making 27 investments.

20+

DEPLOYMENT

Through quarterly deployments, the fund seeks to offer investors a diversified exposure of a minimum of 20 companies.

Nova Growth Capital can deploy all investments this tax year if received by 26 March.

TAX EFFICIENT We believe that not only are the underlying investments all interesting and exciting proposition, but investors can also gain tax advantages available through investment into SEIS and EIS qualifying companies

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Past performance is not a reliable indicator of future results. Capital at risk. GBI


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COVID-19; AN O2H VENTURES PERSPECTIVE The early stage EIS and/or SEIS investment fund backing biotech therapeutic and related AI opportunities speaks to vaccine professionals.

F

irstly, we would like to express our sympathies to the families of the thousands of people who have now died from COVID-19. The markets are currently in turmoil regarding the potential economic impact and governments are hurriedly taking radical steps to curtail the spread of the virus. We hope that the biotech and pharma industry can play its part in developing a vaccine or drug as quickly as possible. In the UK, we have stellar academic and biotech groups that have or are developing breakthrough vaccines and so we thought we would seek expert opinions on how quickly a vaccine could be developed. Dr Eddy Littler, COO at ReViral is an expert in virology and has a track record in the development of antiviral therapeutics. ReViral currently has a vaccine for RSV in Phase II clinical trials. “The identification of a new human coronavirus COVID-19 has stimulated an interest in identifying antivirals or vaccines. Clinical trials have started in China to test off-the-shelf inhibitors the most promising of which is the Gilead drug Sovaldi which has been shown previously to be active against both

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Ebola and SARS in the laboratory. Several companies are screening their compound collections against coronaviruses to identify new leads however even with accelerated approval these new agents will take several years (>4) to be demonstrated to be safe and effective in the clinic. The development of a safe and effective vaccine for COVID-19 would be highly attractive however research has only started to identify protective antigens; select suitable methods of delivery and to show the vaccine to be safe and effective. We should all remember that respiratory syncytial virus is responsible for the death of over 200,000 babies and adults each year and yet despite efforts to develop a vaccine for over 30 years, to date, there is no vaccine that has been shown to be effective beyond phase 2 clinical studies.” We also managed to get an opinion from Neil French, a Professor of Infectious Diseases and Global Health and Hon Consultant Infectious Diseases Royal Liverpool & Broadgreen University Hospitals Trust. “It is possible to develop a vaccine ready for GMP manufacture in approx. 4 months, with 6-12 months being a more realistic timescale. However there is a high risk that the vaccine will not be sufficiently


immunogenic and multiple parallel designs could be pursued to mitigate this, which increases costs. How long to get such a vaccine to market? If you have a proven platform and construct pH1N1 influenza vaccines were ready in 12 months, but look at Ebola as a wholly novel pathogen the answer is several years and this is more likely for COVID-19.” We also asked Graham Richards, a former professor at Oxford University and the Chairman and Founder of Oxford Drug Design his views which he succinctly summarised in one line “To find one, months, but to get into use, at least a year.” These are of course just three professional opinions, but it does give an indication that this may not be as quick to develop a vaccine for COVID-19 as the 3-9 months I have read in various media reports and reality is that we could be several years away before we find an efficacious treatment. We hope a thriving UK biotech industry can contribute to this human health scare.

over the last 6 months, the SPDR Biotech Index has outperformed other indices this year, see Figure 1 below (the dark blue line is the SPDR Biotech Index). Insert FIGURE 1: S&P 500 Vs SPDR BIOTECH INDEX S&P 500 vs Biotech indices This could be in-part due to the massive acquisition that we have seen in 2019 (Bristol Myers Squibb for Celgene, AbbVie for Allergan, and Amgen for Celgene’s psoriasis drug Otezla—which have together delivered more than $150 billion of value) The core hypothesis of o2h Ventures S/EIS Fund that the large Pharma will seek to acquire or collaborate with smaller innovative biotech companies – is firmly being played out with this kind of deal flow. Exonate, an o2h Ventures Fund investment collaboration with the world’s largest pharma Johnson and Johnson is a homegrown example of this hypothesis. For information, you may contact invest@o2h.com

GBI

Biotech SPDR Index outperforming the S&P 500 The macro environment for Biotech remains positive, even though the S&P 500 has had a phenomenal run

GB Investment Magazine · April 2020

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SNAPSHOT -

FOCUS ON ARIE CAPITAL TECHNOLOGY EIS Stephen Margolis, Chairman and Founding Partner of ARIE Tech LLP, has a background in law. Stephen founded Taurus Asset Finance (ARIE Capital’s parent company) in 2011 as an alternative asset finance boutique.

GBI : WHAT ARE YOU LOOKING FORWARD TO 2021? Our focus has always remained consistent – we work with a limited number of companies that we have worked with before and whose management we know. They have all shown growth, have improved revenues and fit into the strategy for the ARIE Capital VC Fund. With all this taken into account, it will enable us to broaden our range in 2021. GBI : WHAT SETS ARIE APART FROM THE REST? We would like to think that our track record is our best USP. Over our 2 funds we have achieved growth, 2 exits and follow on VC funding. This has been achieved by a rigorous selection process, being involved in the company and mentoring. GBI : HAS ARIE CHANGED IN ANY WAY DURING THE LAST YEAR? Nothing physical has changed. All that has changed is a fresh approach to both our investees and our client / investor relationships, for example the creation of www.ariecapitaleis.com, which contains help/advice for both start-ups and investors and demonstrates our growth, interactions and returns for investors.

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GBI : HAS ARIE CHANGED IN ANY GBI : THE UK APPEARS TO HAVE A STRONG START-UP/ENTREPRENEURIAL CULTURE – WHAT DO YOU PUT THAT DOWN TO? Basically, it’s the education process allied to the fintech base of the UK and the relative open mindedness of business to “start up”. Also, incentives such as EIS enable people to get started with some downside risk protection for investors. GBI : WHAT ARE YOUR VIEWS ON THE GOVERNMENT’S RECENT CHANGES TO EIS? I support them. The concept of EIS is to encourage investment where there is more risk and so getting rid of asset-backed EIS means that more money is available for the less conservative, higher-risk opportunities. GBI : ARE THERE ANY FEARS THAT FUTURE GOVERNMENT CHANGES COULD UNDERMINE THE SCHEME’S EFFECTIVENESS? Unfortunately, Governments regularly demonstrate the ability to do u-turns on these matters so I can’t rule them out; but it seems that this Government is getting it right - unless it decides to abandon the investment structure all together, which would be a real shame. GBI : HOW CAN EIS INVESTMENTS CONTINUE TO HELP DIVERSIFY CLIENT PORTFOLIOS? We have all heard and read about great unicorn investments – Instagram, Viper, Waze etc. - and we’ve


all wished that we could have had a chance to invest in them. EIS gives investors that chance and so long as there is a balanced portfolio – i.e. not too much money put into the risky end – then one is giving those investors that chance. GBI : WHICH SECTORS DO YOU SPECIALISE IN AND WHY ARE THESE IMPORTANT? We have investments in: - tech/data/IoT - life sciences and medical devices - fintech - media and sports related tech Each of these sectors represents a part of the industry that we believe is dynamic and with exponential growth value across a variety of sectors while still remaining scalable. GBI : ARE ADVISERS MORE RECEPTIVE TO THE SCHEMES? I think so but it is easier for advisers to invest in “brand platforms” as opposed to understanding what the smaller platforms, like ARIE Capital, are doing and the returns that we are achieving. GBI : ARE CLIENTS MORE SAVVY ABOUT EIS AND SEIS NOWADAYS, AND ARE MORE OF THEM BECOMING INTERESTED IN THE SCHEMES?

GBI : DOES THE INDUSTRY NEED TO DO MORE TO PROMOTE THE SCHEMES TO A WIDER INVESTOR BASE? It would be easy to say ‘yes’ to this; but one must never forget that investors are investing hard-earned money and the industry must be careful that investors understand their risks. GBI : HAS THE CONTINUED CONFUSION OVER BREXIT AFFECTED THE FUTURE OF EIS? Now that Brexit has been resolved it should make life easier because the UK will no longer be bound by EU state aid rules and so the Government can create areas like the Northern Power House and give additional incentives to areas where there is real talent looking for opportunity. GBI : ARE THERE ANY CLOUDS ON THE HORIZON THAT MIGHT SPOIL THE PARTY? There is a saying that behind clouds come clear skies. So yes, there are potential problems in relation to trading relationships, climate change and economic shifts - but each of those provide opportunity for new technologies and changing ways of working and running our lives. It is ARIE Capital’s view that it is constantly aware of not just what is happening now, but where we are likely to be in 2 years time, 5 years time and so on. This is the basis of our investment philosophy. GBI : STEPHEN, THANK YOU VERY MUCH FOR YOUR TIME. GBI

I believe so, on both counts. GBI : HOW CAN ADVISERS CONTINUE TO EDUCATE THEIR CLIENTS ABOUT THE INVESTMENT OPPORTUNITIES IN EIS? Investee companies have to promote themselves. We have a page dedicated to start-ups telling them how to pitch; and it is hoped that this will help investors understand what we look for.

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SPOTLIGHT ON THE VALA EIS PORTFOLIO Jasper Smith is the CEO at Vala Capital and has overall responsibility for Vala EIS Portfolio’s deal flow and mentoring services. He is an entrepreneur who has founded and invested in many companies in the media, technology and engineering sectors. He has generated a number of highly successful exits, creating significant shareholder value along the way. He was kind enough to tell us more about the company.

WHAT WILL BE VALA’S APPROACH IN 2020 AND LOOKING FORWARD TO 2021? Vala Capital is committed to supporting the best of the UK’s SMEs through the provision of capital and mentoring. The Enterprise Investment Scheme is a long established government scheme that aims to encourage investment in smaller companies and is a vital source of funding for SMEs, the lifeblood of the UK economy. Vala extends its support to businesses through institutional funding and debt too, and our first Institutional Fund is expected to launch in the second quarter of 2020. WHAT WOULD YOU SAY IS VALA’S USP? Firstly, we are truly entrepreneur-led. Many companies claim their founders have entrepreneurial backgrounds but no other team in UK VC can match the experience of Vala’s investment veterans in using their own capital to conceptualise, build and ultimately exit businesses. Secondly, it is those entrepreneurs who not only decide how we will invest theinvestors’ capital but also consistently commit their own capital to these enterprises and then mentor them throughout the lifecycle of the business.

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Finally, we have a unique approach to fees: no initial or ongoing fees are charged to investors. There is just one initial fee of 6% charged to the underlying investee companies on deployment of capital. No further ongoing, administrative, transactional or other fees are imposed and only on profitable exits will we take 20% of any profit on return of capital. This is not only a simple and transparent approach to fees but is a fairer balance of risk-sharing between investors and those who manage the investments. HAS VALA CHANGED IN ANY WAY DURING THE PAST YEAR? Vala has expanded over the last 12 months almost doubling in size in terms of personnel, particularly focused on fund management and investor services, and as a result we have more than doubled our office space. We expect to continue to grow our hard-working team as our funds under management develop in the coming months. THE UK APPEARS TO HAVE A STRONG START-UP/ENTREPRENEURIAL CULTURE – WHAT DO YOU PUT THAT DOWN TO? The UK is generally a good environment in which to start and grow businesses. We have comparatively


“My first investment was a bit of a fluke; my background is in engineering and I had a workshop in Battersea where I worked with loads of local artists. A bloke over the road worked for this new company called Sky TV; nobody in the UK at the time had a clue what satellite TV was. He asked me if I fancied a crack at it and I ended up with a contract to build 27 outside demonstration vehicles.” low business taxes and business-friendly legislation, and dynamic financial markets that provide sources of start-up funding. We also have a highly-skilled workforce and a culture of innovation and R&D. WHAT ARE YOUR VIEWS ON THE GOVERNMENT’S RECENT CHANGES TO EIS? A lot of work has been put in by the government to support EIS structures that focus on companies with high growth potential. Our view is that this benefits the investor with potentially attractive investment returns, but also the EIS-qualifying innovative startups and early-stage companies which find it difficult to obtain traditional finance. It is the provision of alternative finance to ambitious young businesses with significant potential for gains where Vala has always operated, so we welcome the changes and see them as an endorsement of our investment strategy. DO YOU HAVE ANY FEARS THAT FUTURE GOVERNMENT CHANGES COULD UNDERMINE THE SCHEMES’ EFFECTIVENESS? No. The changes over recent years focusing EIS capital towards growth or patient capital has been

a positive one and underlines the Government’s commitment towards SMEs. The Conservative manifesto trumpeted EIS as a great success story and the new Chancellor looks to be a source of support for SMEs. IF YOU COULD INFLUENCE CHANGES TO THE SCHEMES, WHAT WOULD YOU SUGGEST? Increased digitization of the EIS investment process we feel would be of benefit to all stakeholders; making it administratively more straightforward for individuals to claim their reliefs and for businesses to obtain their initial advance assurance. HOW CAN EIS INVESTMENTS CONTINUE TO HELP DIVERSIFY CLIENT PORTFOLIOS? We have seen that capital markets remain volatile and that so-called ‘safer’ assets are struggling to deliver on or above inflation growth. Accordingly, alternative

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WHICH SECTORS DO YOU SPECIALISE IN AND WHY ARE THESE IMPORTANT?

“Nothing gives me more of a buzz than the energy and enthusiasm of the entrepreneurs I come across. Passion is what builds a successful business and passion is addictive.” investments such as EIS, which can actually reduce systemic risk, can be a very useful constituent of a diversified client portfolio. Further diversification can be achieved where investors pursue an EIS portfolio versus a single company, and where that portfolio adopts a generalist versus a specialist investment strategy. UK SMEs have an important role to play as the engine room for growth of the UK economy, and for some investors this represents a sensible investment.

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Vala EIS adopts a generalist strategy because we believe this provides both opportunity and diversification for investors. Nevertheless we look for growth in sectors where the UK has a leading edge in expertise. For example, we have made, and will continue to make, significant investments into sectors of the UK’s engineering industry – such as marine engineering, which has deep roots in Britain’s history with skills and experience that are second to none in the world. We make similar focused investments in other high-skill, knowledge-intensive areas such as FinTech, as well as food & beverage brands that are growing well in the UK. ARE ADVISERS BECOMING MORE RECEPTIVE TO THE SCHEMES? Many advisers are already experiencing the benefit of having made recommendations to their clients. Many others are on a journey to understand not only the taxplanning opportunities to their clients, but how these kinds of alternative investments bring diversification to their clients’ portfolios. ARE CLIENTS MORE SAVVY ABOUT EIS AND SEIS NOWADAYS? Investors are possibly more aware of the tax reliefs on offer, but we think it’s still difficult for some – and indeed their advisers - to navigate the market and find and compare investment opportunities. ARE THERE MORE CLIENTS BECOMING INTERESTED IN THE SCHEMES? The EIS market as a whole has decreased in size in recent years, but that seems to be largely because of the disappearance of some of the ‘asset-backed’


and ‘lower risk’ investment opportunities in the wake of the rule changes. As far as we can tell, demand for true VC-style EIS investments remains buoyant. HOW CAN ADVISERS CONTINUE TO EDUCATE THEIR CLIENTS ABOUT THE INVESTMENT OPPORTUNITIES IN EIS? Working with Vala means that advisers get full transparency over the investee companies that are expected to be included in their clients’ – the investors – portfolios. This unique insight removes the opaqueness of EIS, which is all too commonplace within the market, and gives advisers confidence of understanding not only the companies likely to be included in portfolios but also the timing of when those investments (and the corresponding EIS3 certificates) will be made. DOES THE INDUSTRY NEED TO DO MORE TO PROMOTE THE SCHEMES TO A WIDER INVESTOR BASE? It is important to remember that EIS investments are only suitable for investors with a certain profile. As such, broadening the reach for EIS to a wider investor base needs a reasoned approach, but the industry should certainly continue its efforts to provide easily understandable information and improve transparency. HAS THE CONTINUED CONFUSION OVER BREXIT AFFECTED THE FUTURE OF EIS? No, we don’t think it has affected the future of EIS and now that there is a little more political certainty we think business confidence is on the rise. Prior to the recent General Election there was certainly some unease among advisers when considering whether to make a recommendation to their clients. This underpins an important role for managers like Vala

“Hunches matter. Take PlayJam, for example – with digital TV in its infancy, there was virtually no evidence in this market place, after all, who would play games on a TV? But we took it on, developed the set-top box and ended up as the world’s premier games network.”

to talk openly and honestly about risk management – how we select and mentor the investments we make; how we build diversified portfolios, and how fees play a crucial part in sharing the risk with investors. ARE THERE ANY CLOUDS ON THE HORIZON, SUCH AS TRADE WARS, SLOWING GLOBAL ECONOMY OR INTEREST RATE RISES THAT MIGHT SPOIL THE PARTY? All of the above! But one of the advantages of investing in smaller companies is that they tend to be agile and resourceful, making them potentially resilient in the face of changes and uncertainty. Many thanks for your time, Jasper.

GBI

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REPORT FROM THE VC FRONT LINE Committed Capital is a Venture Capital business based in Belgravia, London, and was established in 2001. Focusing on the technology sector, Committed Capital has a portfolio of promising growth stage and post revenue UK-based companies. Glen Stewart, their Head of Intermediated Capital Raising, talked us through some of the key areas including investee selection, risk mitigation, success rates, portfolio diversification and fees.

HOW DO YOU GO ABOUT SELECTING INVESTEE COMPANIES? We have a wide network of entrepreneurial angel investors in addition to the networks within our team and a number of intermediaries who are well versed in what we do and how we do it. As a consequence, the investment opportunities presented to us have already been through a filtering process, to a degree, which makes the process a little more streamlined. Companies then go through an more detailed filtering process to establish which ones we may wish to consider for full due diligence. Whilst not exhaustive, the filtering process includes areas such as: • Is the underlying market growing rapidly or otherwise dynamic? • Does the product/service compete with or complement key market incumbents?

• Is the company post revenue £1m+? • Can Committed Capital lead the round? • Can a Committed Capital representative sit on the board? • Has HMRC EIS Advance Assurance been provided? If any of these criteria are not met then that is a red flag for us. Other negative indicators can be if, for example, returns are contingent on third party intervention we have no control over (such as FDA approvals, Government approvals). THE PATIENT CAPITAL REVIEW BROUGHT ABOUT THE END OF CAPITAL PRESERVATION INVESTMENT OPPORTUNITIES THEREBY INCREASING THE RISK PROFILE OF EIS INVESTING. IS THERE ANY WAY OF MITIGATING THIS INCREASED RISK?

• Is the company’s strategy overall, and product market strategy in particular, sufficiently well considered to optimise success/sales growth?

Yes, there are many ways to mitigate risk. Before the Patient Capital came in to effect it was commonplace for an investor to place their EIS portfolio allocation with just one fund manager, with a reasonable prediction as to the investment outcome, providing that the underlying companies remained EIS-qualifying throughout the investment term.

• Does the management team have a track record of delivering value to shareholders in the relevant sector?

That has now changed and there is now more specific risk which can be mitigated. Most fund managers specialise in a particular sector such as life sciences,

• Does the company have the products or services to take advantage of the market opportunity?

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renewable energy, media and, as we do, technology. It is important, therefore, for investors to spread investments across both fund managers and sectors to achieve a balanced portfolio and reduce the specific risk. When considering which fund managers to invest with, advisers should consider whether the manager has sector-specific experience and track record, is that in line with the target returns of the fund, number of exits and how many of these have been profitable and the typical exit time frame. Whilst previous performance of course does not guarantee future performance, it is a very good indicator as to how a fund manager selects investee companies, how hands-on they are with those companies, the valuation analysis and the depth and breadth of their initial and ongoing due diligence. Other considerations are HMRC Advance Assurance and deployment time. There is always a risk that HMRC do not deem that a business meets the exacting legislative criteria to obtain EIS qualification, and so investors and advisers should satisfy themselves that fund managers have HMRC Advance Assurance in place for each underlying company before investing. Some Fund Managers can take as long as 18 months to deploy funds, so it is worth checking the anticipated deployment timeframe with Fund Managers because investors do not receive income tax relief until the manager has deployed the capital and has issued EIS3 forms. At Committed Capital, we insist on HMRC Advance Assurance being in place prior to investment as part of our heads of terms with potential investee, companies, and we typically fully deploy investors subscriptions within 6-9 months, although we can accelerate this on request. AS A FUND MANAGER, HOW MANY SUCCESSFUL EXITS AND HOW MANY FAILURES HAVE YOU HAD? Since 2001 the team have achieved an average 2.4 x ROI (excluding any tax reliefs) with an average holding period of 4.5 years. We have invested in 33 EIS qualifying investee companies and made 19 exits and 2 partial exits of

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which 20 have been profitable and just 1 has made a partial loss. Our most recent exit was on 31st July 2019 which saw us sell our shares in FSB Technology Ltd to a strategic buyer, generating a return to investors of 2.71x ROI (excluding tax relief). We put this track record down to a well-grooved due diligence process, and being very hands on with our companies. In addition to finance, we provide support during the holding period in areas such as governance, remuneration, personnel, audit and sales and marketing strategies, and work with companies in identifying exit strategies from an early stage. HOW CAN INVESTORS ACHIEVE DIVERSIFICATION WITHIN A TECHNOLOGY FOCUSED FUND? As you know, technology encompasses almost every part of our lives, and the sector is deeper and broader than ever before and so, represents an exciting and opportune time to invest in this sector. In fact, total VC investment in UK tech in 2018 topped £6bn which was more than any other European country. Investors can achieve diversification by ensuring they are invested across a range of sub-sectors. Sub-sectors that the Committed Capital Growth EIS Fund invests in have included FinTech, InsureTech, EdTech, Gaming, Security, Internet of Things, Software as a Service, Digital Marketing, Cloud applications and Electric Motors. FUND MANAGERS CHARGE FEES EITHER TO THE INVESTOR, THE INVESTEE COMPANY OR A HYBRID MODEL. WHAT IS YOUR VIEW ON HOW FEES SHOULD BE CHARGED AND CAN THE INDUSTRY OFFER GREATER TRANSPARENCY IN THIS AREA? This is a somewhat emotive topic between fund managers, wealth managers and investors alike. How a fund manager chooses to charge fees can in part

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depend upon the stage of investee companies that the fund manager is focusing on. There are certainly pros and cons on both sides of the fence. Ideally of course, placing all charges on investee companies works in the investor’s favour as income tax relief is calculated on the full investment amount; however, this may not always achieve the best commercial outcome for the investee company which ultimately investors are relying upon to generate a profit on their investment; therefore, fees can alternatively be levied on investors. Lastly, of course, there is a blend between the two using a hybrid model. For Seed stage companies, charging all fees on to the investee company is quite often the norm. A Seed stage company must access capital from somewhere to turn their business idea into a commercial reality and is less sensitive as to the cost. It will naturally struggle to obtain finance from traditional banking routes, relying instead on a variety of alternative funding sources including friends and family, R&D tax credits, crowdfunding, peer-to-peer lending and finance secured through SEIS, VCT and EIS. By contrast, Growth Stage companies have more options available to them; they recognise the cost of capital and are much more sensitive as to the cost of finance. Placing all fees on to the investee company can run the risk that they seek more competitive finance elsewhere initially, or a fund manager not being able to follow their money as the investee company seeks out more competitively priced finance in a subsequent funding round. It is of course important, however, for the company to fully understand what they are getting as a part of a financing round. If it is just finance that is fine; however, assuming the fund manager is very hands on then cheaper finance is not necessarily and often not the answer.

whereby we charge some fees to the investee company and some to the investor. The importance of human capital cannot be underestimated, and we believe this is instrumental in optimising growth. We always take a non-exec board seat with our companies, spend time working with companies on their go to market strategy, set up a remuneration committee, work with them on their corporate governance and introduce them to strategic partners, whilst being mindful of potential exit routes from the point of engagement. Greater transparency with regard to fees is absolutely required. Having reviewed all the charging structures in the EIS arena, the way fees are charged varies widely, including different levels of fees, who fees are charged to, for how long they are charged, what they are charged for and whether VAT is or is not included. Transparency around fees disappointingly continues to fall below the level that they should have, making it difficult for advisers to make meaningful comparisons between fund managers. It would be great to see a third-party review service or platform provide a useful solution. There are of course fund managers who are crystal clear in how charges are presented, but also others who are rather opaque. What I would say, is that it is important to model all fees out over a 5 year term from both sides of the fence to calculate the total costs, and also to pay particular attention to how success fees are charged and whether these are on a company by company basis or on a portfolio basis. GBI

At Committed Capital, we invest into Growth Stage companies and operate a hybrid charging model

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PRAETURA VENTURES

L

ondon is the undisputed heavyweight champion of the UK when it comes to venture capital investment. In fact, the city is packing some pretty serious punches when it comes to Europe, too. In 2019 it received greater amounts of VC funding than anywhere else on the continent. Venture capital activity grew in the UK by 54% in 2019, with London accounting for the lion’s share of deals (and value). As an asset class, venture capital is hotter than it has ever been. But for investors, how big is the opportunity for capital growth outside of the capital? For one Manchester-based fund manager, Praetura Ventures, the answer is clear. According to the Patient Capital Review, and research from PMSI Strategy LLP, growing, funding-hungry businesses in the North suffer a shortfall in venture funding of between £700m and £1.4bn every year. London has over 90 venture capital firms. The North has fewer than 10. A recent report from the British Business Bank has seen equity investment in the North increase by over 130% in the past five years. The opportunity for a knockout in the North is there: The Hut Group and Boohoo.com are perhaps two of the most famous examples.

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GB Investment Magazine · April 2020

The demand for genuine venture capital in the North presents an enormous opportunity for investors seeking returns from early-stage companies. It’s also a founding rationale of Praetura Ventures, who seek to predominantly back businesses from the North of England. Praetura was set up in 2011, raising capital and investing in the early stages of business lifecycles. Founded by Mike Fletcher, David Foreman and Peadar O’Reilly, the team floated Preston-based Inspired Energy PLC providing their investors with a 16x return. Eight years later, after investing over £40m in equity across 25 portfolio companies, David Foreman launched Praetura Ventures. Building on the strong track record laid by the original business, Praetura Ventures’ Praetura EIS 2019 Fund closed in May 2019, breaking the record for the largest ever maiden EIS fund at £15.0m. A smaller, top-up fund closed in January 2020, taking the business’ total raised to over £22.0m in its first year alone. In its first 18 months, the company has grown to 26 people, with one of the UK’s largest EIS-focused venture capital investment teams. In line with its more than money approach, Praetura Ventures’ portfolio team provides tangible value to the business it has invested


in. The portfolio team is comprised of entrepreneurs and business leaders with experience of founding, scaling and exiting early-stage ventures. “We saw a great opportunity for a firm to break into the market with a differentiated approach,” says David Foreman, Praetura Ventures’ managing director. “The smartest businesses raising money right now are looking for something more than just a big investment on a massive valuation. That’s something we sought to address with Praetura Ventures: giving management teams more than just a cheque.” That ‘more than money’ approach is in Praetura’s DNA. One of its portfolio businesses, Sorted Group (a business first backed by Praetura in 2013) recently placed 45th in the Financial Times’ 1000 Fastest Growing Businesses in Europe. Another portfolio company, backed by Praetura since its early stages, recently rejected an investment offer from a US VC firm valuing it at £50m. “We won’t invest in a business unless there’s the opportunity for us to add more than money” continued Foreman. “That could involve support with a company’s go-to-market strategy, helping them to build out their finance function, or even just connecting them to other businesses in the portfolio. We have an unrivalled network in the North, and we want to leverage that when we back some of the region’s most exciting earlystage companies.” Exclusively investing in EIS-eligible business, Praetura Ventures saw a 1300% increase in support from intermediaries between its first and second funds. Foreman credits the firm’s speed of deployment as one of the reasons. “We deployed our 2019 Fund in seven months, and we’re on track to deploy our 2020 Fund in just three. Advisers have told us that planning around tax years is important and that their clients aren’t happy when managers take months and months to invest their money. It might take us six months to invest in a business, but we’re usually in the final stages of investment by the time we close a fund.” Jon Prescott, Praetura Ventures’ business development director, understands the value in forming a partnership with IFAs. “Finding the right advisers to partner with is a critical part of our business,” he explained.

“We listened carefully to what intermediaries wanted from a fund manager and set out to deliver that from the start. Regular, honest and detailed transparent communication forms part of that,” he added. “So does administrative support. For example, all of our systems have been designed from the start to help IFAs manage the EIS process quickly and easily.” Whilst we’re confident in our ability to raise, investment decisions are changing on a daily basis. GBI

GB Investment Magazine · April 2020

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WE NEED TO TALK ABOUT RISKS James Faulkner is a Director at Vala Capital and has responsibility for the experience of investors and their advisers. James has enjoyed a successful career in sales and marketing for over 30 years primarily within financial services with PwC, ABN Amro and Dun & Bradstreet but with spells in manufacturing and consulting too. James is a Chartered Member of the CISI and holds the Level 4 Investment Advice Diploma. In this article he discusses how to build your clients’ confidence in EIS by helping them understand the risks involved.

T

here is no getting around the fact that investing into companies that qualify for the Enterprise Investment Scheme is risky. After all, EIS tax reliefs exist solely to incentivise risk-taking. But it’s also true that risks can seem more severe to clients who do not fully understand them. By demystifying EIS risks for your clients, and by showing them how EIS fund managers try to mitigate risk, you can help them to feel more confident about investing. Some general risk mitigation themes, like diversification and due diligence, are familiar but worth thinking about in more detail. And all sorts of other factors, including the manager’s experience, their approach to mentoring and even the product’s fee structure can have a bearing on risks. This article sets out some of the risk issues you might have thought of before, alongside some that you may not have previously considered. Investing in an EIS fund rather than a single company is the simplest way to manage risk. At the most basic level, this is just about spreading investment across a portfolio, so that you’re not putting all a client’s eggs in one basket. But diversification can work on a number

34

GB Investment Magazine · April 2020

of other levels too. Some EIS products seek to diversify a client’s subscription across a number of different industry sectors. This means that if a certain industry is hit hard by economic issues, evolving consumer trends or regulatory changes, it shouldn’t affect the investor’s entire portfolio. At Vala, we tend to invest in the sectors that we know best. And because our investment committee members have a broad range of experience, that means our portfolio is diversified across sectors including technology, engineering, fintech, media & entertainment, lifestyle brands and food & beverages. Further diversification can be achieved by investing in companies that are at different stages of development. Investing in a company that has not yet sold its product to any customers brings higher risks, but it could also eventually yield higher returns when compared to investing in more mature businesses. Companies that are already generating sales revenues command higher share prices at the point of investment, so the later investors will generally achieve a lower exit multiple than the pre-revenue investors. At Vala, our preference is to invest in companies that have already generated at least some revenues. But to maintain the right balance


of risk and reward across the entire portfolio, we do sometimes invest in pre-revenue companies too. If diversification is such a powerful way to mitigate risk, why stop (as Vala does) at a portfolio of 6 to 10 companies? Why not invest in 100 businesses? Put simply, the bigger the portfolio, the smaller the chances of extreme outcomes. As the size of your portfolio grows, you are less likely to lose your entire investment. But you are also less likely to achieve a really exciting return. If you split your investment equally across 10 companies, then successfully sell one company at a 10x multiple, you have recouped your entire investment. Within a 100 company portfolio, the same outcome only returns 10% of your original investment. At Vala, diversification is baked into our investment thesis. And because we invest in tranches, clients are able to see a preview of the companies we plan to invest in next. As such, clients can sense-check the diversification we are aiming to achieve for them, before they commit to investing with us. Good due diligence processes, carefully carried out by an investment manager, can also serve to strip

out some layers of uncertainty. Clearly due diligence cannot remove all risks. But it should be of some comfort to know that the investment manager is carrying out a detailed assessment of a company’s business plan, financial model, management team, intellectual property and more, before committing to making an investment. At Vala, we often invest in companies that have come through accelerator and incubator programmes we are involved with. This provides a useful additional source of practical knowledge to supplement our other due diligence processes. We have the chance to see the company and its founder in action over a prolonged period of time, in order to build our confidence in their abilities prior to investment. Managing risk does not end with the selection of companies to invest in. The way in which funds are released to companies can play a part. At Vala, we often reach agreements with our portfolio companies where we commit to provide a certain amount of funding, but release it gradually rather than in a single payment. Each phase of the investment acts as a review point. We revisit our due diligence and assess the company’s progress before providing further cash, giving us regular chances to evaluate the risks involved.

GB Investment Magazine ¡ April 2020

35


The support provided to companies by EIS fund managers throughout the investment holding period can also serve to mitigate risk. At Vala, all of our investee companies receive monitoring from our team of seasoned entrepreneurs. They have all enjoyed success in creating, growing and selling companies, but they have also learned lots of painful lessons along the way. This experience really comes into its own in a crisis. We’re able to offer our investee companies calm, constructive help whenever they face challenges and obstacles. This is in turn helps to manage risks for our investors. It’s also worth thinking about how an EIS product’s fee structure will affect the provider’s attitude to risk. For example, the Vala EIS Portfolio does not collect any initial or annual charges from investors. Our costs are covered by a 6% fee charged to investee companies, and our profit incentive comes from a 20% performance fee on successful investments. This closely aligns our interests with those of our investors. We are incentivised to generate strong investment returns. But if we take excessive risks we may end up with no reward, since we do not have the cushion of annual fees to fall back on. Finally, it is worth coming back to where we started this article – the connection between EIS tax reliefs

36

GB Investment Magazine · April 2020

and risks. Whilst tax-free gains on investment returns enhance the potential upside, income tax relief reduces the cost of investment and loss relief limits downside risk. When an eligible higher rate taxpayer invests in EIS, these tax reliefs restrict their potential loss to just 42% of the amount invested. And an investor paying tax at 45% can only lose 38.5% of their EIS investments. So, are clients right to worry about the risks of EIS investing? On one level, yes. Investing in start-up companies and early-stage companies is difficult and risky, and always will be. But by choosing an EIS provider who takes a strategic and disciplined approach to managing the inherent risks, and by remembering that the EIS reliefs reduce the overall amount of money at risk, investors might feel more confident about their decision to invest in EIS. GBI


M AGAZINE

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


SEIS Open

Close

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

Close

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).

SEIS Open

January 2016

Close

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).

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


Open Offers

EIS

SEIS

Open

Close

Evergreen

Evergreen

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

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.

EIS Open

01.09.2017

Close

Evergreen

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

Oxford Technology Last Minute 2020 EIS Fund An investment in this fund will give investors a portfolio of 5-10 EIS investments in this tax year, so made before 5 April 2020. These investments will be in companies which we know well, since they are already in our porftolio and which are raising capital for expansion. They will include some or all of the following: Combat Medical, Lightpoint, Animal Dynamics, Bioarchitech, Active Needle, Lupe, Process Vision, Atelerix, Dark Beam, Expend, and possibly others. A page of information on each of these companies and how they are doing can be found by downloading our latest quarterly report from www.oxfordtechnology.com.

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

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

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.

GB Investment Magazine · Open Offers

39


EIS Open

Close

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)

EIS Open

Close

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).

EIS Open

Evergreen

Close

Evergreen

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

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

40

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 GB40 Investment Magazine · October· 2018


Open Offers

EIS

SEIS

Open

Close

Now

Multiple

Amount to be Raised: Evergreen

Minimum Investment: £10,000

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

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.

EIS

SEIS

Open

Close

Now

31.07 2020

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

Close

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

41


BR Open

Close

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

Close

Evergreen,

although deadline of 31st March for full investment this tax year

Amount to be Raised: £5m Minimum Investment: £25,000

Amberside Incrementum EIS A partnership with CH1 Investment Partners, who have over 10 years’ experience of investing in EIS companies. Matthew Evans and Richard Spacey ran Vestra Ventures together, and brought that experience across to CH1 when they launched the business in 2016. The Incrementum EIS Fund invests in well-run companies that can demonstrate a proven market for their product or service through increasing annual revenue streams. Summary: - Generalist EIS providing expansion capital for companies that can demonstrate increased demand for their product/service within their market - Invests in strong, well-run companies with ambitious yet achievable business plans, who have a willingness to engage with the Fund as the business grows - Target exit of 4-6 years post investment per investee company - Bespoke split and single company investment available

T. 01442 910 069 E. info@amberside.com www.amberside.com/eis

- Shares are alloted on a regular basis, and additional details made available of all Investment Committee approved companies - All investee companies are personally invested in by CH1 directors pari passu with EIS investors to demonstrate belief in the proposition Transparency is key at Amberside Capital, and investors will have visibility of their likely portfolios at the time they invest, as well as having 24 hour online access to portfolio information.

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


Open Offers

EIS Open

Close

Evergreen,

although deadline of 2pm on 3rd April for full investment this tax year

Amount to be Raised: £20m Minimum Investment: £25,000

Amberside Knowledge Intensive EIS A partnership with Anglo Scientific, who are experts at selecting, building and exiting from technology businesses, having invested using this strategy for well over 10 years. The combined team of Anglo Scientific and Amberside Capital has over 100 years’ combined experience in EIS investments. This EIS fund invests in a carefully selected portfolio of companies that are using world class technology to help solve challenging global issues predominantly in 3 sub-sectors: - Security; - Healthcare; - Communications. The companies will all have defensible IP, a truly global market, and be able to demonstrate a clear route to earning over £100m annually in revenues.

T. 01442 910 069 E. info@amberside.com www.amberside.com/eis

EIS Open

Evergreen

Close

Evergreen

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

We would expect holding periods of between 5 and 7 years depending on the stage each investee company is at. Transparency is key at Amberside Capital, and investors will have visibility of their likely portfolios at the time they invest, as well as having 24 hour online access to portfolio information post investment.

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

BR Close

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.

GB Investment Magazine · Open Offers

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IHT Open

Close

Evergreen

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.

IHT Open

Close

Evergreen

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

Close

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.

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


Open Offers

EIS Open

Close

Evergreen

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

EIS Open

Close

July 2019

June 2020

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

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.

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.

VCT Open

September 2019

Close August 2020

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

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

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EIS Open

Close

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.

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

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


Open Offers

EIS

SEIS

Open

May 2019

Close

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

Close

Evergreen

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/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

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EIS Open

Close

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

Now

Close

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

48

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 GB48 Investment Magazine · October· 2018


Open Offers

EIS Open

Close

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

October 2019

Close 30th October 2020

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.”

Blackfinch Spring Venture Capital Trust

Amount to be Raised: £20 million

The Blackfinch Spring VCT brings clients the chance to further diversify their portfolios through exposure to the technology sector. This is alongside access to VCT tax benefits including 30% income tax relief and the prospect of tax-free dividends.

Minimum Investment: £3,000

The VCT plans to invest in a diversified range of early stage technology firms operating across sectors. The focus is on firms at a growth-stage of development, bringing a higher chance of success. Investee firms will be sourced from high-quality new deal flow. The VCT will also make follow-on investments in the highest-performing firms emerging from the Blackfinch Ventures EIS Portfolios. By 2024 we plan to return the profits to investors as tax-free dividends of 5% per annum.

ordinary shares and over-allotment facility for a further £10 million.

T. 01452 717070 E. enquiries@blackfinch.com www.blackfinch.com/ventures/ springvct

Investment Magazine · Open2018 Offers GB GB Investment Magazine · Dec|Jan

49


EIS Open

Evergreen

Close

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

SEIS

Evergreen

Open

Evergreen

Amount to be Raised:

Open Ended

Minimum Investment: £10,000

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.

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

50

• 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

GB Investment Magazine Open Offers GB50 Investment Magazine · October· 2018


Open Offers

EIS Open

Close

Evergreen

Evergreen

Amount to be Raised:

c. £30m

Minimum Investment:

£25,000

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

EIS Open

1st November 2019

Close 31st March for investment requiring deployment by the 5th april for carryback; otherwise the fund will remian open with depoloyment on a monthly basis

Amount to be Raised:

£3,500,000

Minimum Investment:

£10,000

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.

ARIE Capital Technology EIS Fund ARIE Capital began investing in technology companies in 2016, following on from two early technology investments that its parent company, Taurus Asset Finance, made in 2013. Since then, our company has made fifteen technology-based investments. We are proud of our vibrant and diverse portfolio that continues to increase exponentially in valuation, with two exits already made. Following these principles, we have now assembled a dedicated team to focus on the development of EIS opportunities and to cultivate exciting new technologies. We are partnering with companies and founders that are well known to ARIE Capital and have already shown considerable growth and development. We look to nurture these companies so that they will be ready for further funding in the future (from ourselves or other investors), which will be to the benefit of all concerned. With our globally-minded structure and experienced team, ARIE Capital offers you the opportunity to invest in companies that might not come your way via the traditional routes. In this way, we present to you a fund that is full of unique investment opportunities that are both exciting and with significant upside potential.

T. 020 7087 3570 E. martin@arietech.co.uk www.ariecapitaleis.com

GB Investment Magazine · Open Offers

51


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The end of a taxing year | GBI 19 | April 2020