GBI Yearbook | 2020 by Clifton Media Lab

FOR PROFESSIONAL INVESTMENT ADVISERS

M AGAZINE

Supported by EISA

GOVERNMENT BACKED - GREAT BRITISH INVESTMENTS - EIS - SEIS - BR - SITR - VCT

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YEARS

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Invest in the UKâ&#x20AC;&#x2122;s most exciting entrepreneurial businesses and benefit from generous tax reliefs

Calculus Capital is celebrating its 20th year, as a multi-award winning leader of tax efficient investment. The Calculus EIS Fund and Calculus VCT invest in businesses with strong growth potential, over a range of sectors with good quality management teams.

To find out more get in touch on: info@calculuscapital.com, 020 7493 4940 or visit www.calculuscapital.com

Before investing in the Calculus VCT or Calculus EIS Fund, you should read their respective Prospectus and Information Memorandum carefully and take professional advice. EIS and VCT are long term investments, and their value can fall as well as rise. Any person making a subscription to the VCT or EIS Fund must be able to bear the associated risks.

Contents

4 Foreword

Mark Brownridge, Director General of EISA

8 Welcome

Alex Sullivan, Managing Partner

THOUGHT LEADERSHIP 10 Octopus Investments - Jessica Franks, business line manager for tax products, offers insight on Business Property Relief and helping advisers unlock the estate planning opportunity

26 Resonance - Oliver Pollard, Senior Investment Manager, reflects on a different way to make a difference and the appeal of the Resonance Regional SITR funds

14 Deepbridge Capital - Andrew Aldridge, Partner and Head of Marketing, explains why management teams need vision and experience

30 Oxford Technology Management - 36 years and 150 start-ups later Oxford Technology’s Founder Lucius Carey explains why last minute investments in this sector needn’t mean second best

18 Hardman & Co - The team at Hardman & Co discuss why advisers need to identify the hidden risks of BR Products 20 Worth Capital - Matthew Cushen, Co-Founder, explores whether SEIS is the ugly duckling or beautiful swan of early investing

34 Stellar AM - Matthew Steiner, Corporate Development Director, explains the background and ambitions for Stellar ICENI and why advisers should prepare for the ‘inheritance econony’

24 Calculus Capital - The team behind the UK Creative Content EIS Fund outline how streaming revolutionised screen industry finance

FOCUS INTERVIEWS

ENHANCED COMPANY PROFILES

37 Downing Ventures EIS, Laurence Calcott, Partner and Head of Sales, and Portfolio Director Mike Kennedy on the EIS sector and Downing in particular 40 GrowthInvest, Daniel Rodwell, CEO and Founder, explains GrowthInvest’s aims and approaches to growing the tax-efficient investment market 42 Nova, Andy Davidson, CEO gives us an insightful snapshot on Nova Growth Capital

46 Vala 48 o2h 50 Syndicate Room 52 Committed Capital 54 Hambro Perks 56 Worth Capital 58 Iron Box 60 Stellar

63 The 10th VCT & EIS Investor Forum

OPEN OFFERS 64

DIRECTORY

Highlighting some of the key offerings currently available to IFAs

Disclaimer 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

Editor: Andrew Sullivan andrew.sullivan@cliftonmedialab.com

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

M AGAZINE

Telephone: +44 (0) 1179 089686

Additional Editorial: Jacqueline Wilson jacqueline.wilson@ifamagazine.com Design: Becky Oliver

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

Full subscription details and eligibility criteria are available at www.gbinvestments.co.uk ©2020. 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.

FOREWORD A ship in harbour is safe, but that is not what ships are built for.

isk. It can be a difficult subject to navigate.

So much of what we do in the investment industry is dominated by risk and it’s a word banded about regularly by portfolio managers, fund providers, financial planners and more recently HMRC. In 2018, HMRC introduced a “risk to capital” condition which stated that an EIS investment must include a significant risk that there will be a loss of capital of an amount greater than the net investment return. Why was such a condition needed? Effectively because HMRC felt that for too long and for too many investments, EIS was being used for so called “low risk capital preservation or asset backed” schemes. Schemes, who HMRC believed, were deliberating structuring themselves to mitigate the risk of investment for investors as much as possible within the legislation as it stood at the time. So why such focus on risk and what does risk actually mean? Risk is essentially a human invention that was originally designed to assist them with the navigation of dangers, fears, and uncertainties. In the early days of human history, mankind faced these on a daily basis and being aware of different types of risk kept our ancestors alive. However, over time and as we acclimatised to our surroundings and environment, these risks dissipated and we began to use risk for a variety of other situations. Unfortunately, this has led to our assessment of risk as being capable of failure generally due to two issues, ignorance and laziness. For instance, we fool ourselves

GB Investment Yearbook · March 2020

that we are predisposed to assume that we understand the past. As a result, we then believe that we can also know what the future might hold (think of the most famous risk warning in the investment world, “past performance is not a guide to future performance”!). However, research shows that we don’t really understand the past nearly as much as we might think. As leading risk observer Daniel Kahneman points out, a particular problem is hindsight, ”Hindsight bias has pernicious effects on the evaluations of decision makers. It leads observers to assess the quality of a decision not by whether the process was sound but by whether its outcome was good or bad.” Many investment decisions that investors (and fund managers) make are actually made using a sound process but because of unforeseeable events if the eventual outcome is bad (i.e. money was lost), hindsight plants a memory of a bad experience that we then come to rely on when we make further decisions about the future. Decisions and preferences are significantly influenced by memories, and memories are not always right. Another emotion investors will be all too familiar with is regret when something goes wrong. A fear of regret is a motivation behind many decisions that we make, particularly investment ones. We avoid making decisions that may lead to regret and often miss out on opportunities because of this. Certainly all investors can relate to this. The old “one that got away” theory. However, decision makers (i.e. investors) are the most affected by regret. They know that regret is more likely in their lives and they often live in anticipation of it. The possibility of making a loss on an

EIS investment often results in investors avoiding making the decision to invest in the first place, even if that means missing out on a good opportunity. This gives the emotion of regret power, and it has a significant role in all investment decisions that are made. Given the difficulties we encounter with assessing risk and making choices, it perhaps becomes no surprise to learn that the majority of people don’t enjoy risk and avoid it whenever possible. In most cases, when offered two options, one being a gamble with a value much higher than expected, and one being a sure thing of expected value, most people will pick the sure thing. This is because we crave the security of knowing the outcome and avoiding the risk. Research shows us that in some cases if a sure thing is offered with less than expected value, some decision-makers will take this as the option, determined to avoid any potential risk. Perhaps this serves to help us understand why capital preservation/asset backed EIS’s which promised a more “low risk” approach to EIS investing became so popular with investors. Investors liked the security of knowing the outcome even if that meant receiving a lower return rather than potentially gambling on a higher than expected return. Unfortunately, recent events and history have showed us that these “low risk” investments were not low risk at all and these schemes are unravelling, leaving risk averse investors with significant losses, bad memories and regret. Will being left with these emotions deter such investors from investing in EIS again? Most likely. And will these emotions be contagious and infect other investors? Only time will tell.

Perhaps then this gives an insight into the psyche of an investor and why loss aversion weighs so heavily on many investors investment decisions and why EIS suffers as a result. Loss aversion is often seen as the motive to avoid losses as being stronger than the motive to achieve gain. To use money as an example, we are likely to be motivated more to not lose money than we would be to make money. Kahneman explains that this is why many people don’t set high-achieving goals. By setting a goal you never reach, you are making a loss. By exceeding the goal, you are achieving a gain. He explains that in many cases, people will reduce their efforts once they have reached a specific goal because they see no point going above and beyond, it’s not about the gains, it’s about avoiding the loss. I’m certain we see a similar effect working against EIS. Investors would rather set a low goal in terms of a return by investing in traditional stockmarket related funds or bank accounts than investing in EIS and potentially receiving a far higher return. Because, by not reaching those higher returns (e.g. 10x), it feels like a loss even if those returns (e.g. 5x) beat the returns of a traditional stockmarket related fund or bank account. So how can we reconcile the fact that people would rather not lose money than make money, but an investment such as EIS is likely to see some losses? Framing might help. Bad outcomes are much more acceptable if they are framed as a cost that did not win rather than losing. This is because losses evoke stronger feelings than cost. Take an example, I give you £50. I then ask you to choose between a sure outcome and a

GB Investment Yearbook · March 2020

gamble on a wheel of chance. If the wheel stops on white, you “receive” the entire amount, if it stops on black, you get nothing. The sure outcome is simply the expected value of the gamble, i.e. a gain of £20. The same sure outcome can be framed in two different ways either keep £20 or lose £30. The outcomes are identical either way. Generally, research shows us that when presented with this scenario, people are more likely to choose the sure thing when framed as keep £20 and more likely to accept the gamble when framed as lose £30. This tells us framing has a huge effect. Investors tend to prefer a sure thing over a gamble (i.e. they are risk averse) when the outcomes are good and they tend to reject the sure thing and accept the gamble (i.e. they are risk seeking) when outcomes are negative. So could we use this framing effect to our advantage by being upfront and honest about potential losses and returns but also reminding investors of the value of the tax relief? For example, would you invest £1,000 in an EIS that offers either a return of £300 immediately plus a 10% chance to gain £10,000 or a 90% chance of receiving nothing? Additionally, as every financial planner knows, we can also add in the effects of portfolio diversification which would hopefully bring those odds down further from 90%. In summary, we have seen over the past 18 months that some capital preservation/asset backed schemes haven’t lived up to their “low risk” billing and are leaving investors with significant losses. It seems we and HMRC have been ahead of the curve in curtailing these schemes and refocusing on entrepreneurial investments that

GB Investment Yearbook · March 2020

are genuinely seeking to grow over the long term. We are already seeing some impressive exits from these businesses and this is likely to be a continuing trend. Some businesses will of course fail but by embracing diversification, understanding risk and human behaviour towards it and educating investors accordingly, EIS can continue to flourish. This is a great opportunity for our industry to face up to these challenges, be open and transparent and seek to change our language and messaging to potential investors. Certainly there is currently no shortage of dealflow in the UK SME sector and EIS/SEIS continues to step in at the very earliest stage to fund and mentor clever ideas and transform them into the next generation of productive businesses. EIS and SEIS can make a claim that no other investment - it fund dreams, invests in ambition and is the fuel for an entrepreneurs fire. The GBI yearbook has become a “go to” resource for everyone involved in the tax efficient sector and beyond and yet again its chock full of relevant articles, resources and information. So, put the kettle on, head for your comfiest chair and enjoy reading the yearbook as much as I have. You will soon be a fountain of EIS knowledge! GBI

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If you are interested in growing your estate planning business, and offering a more complete service to your clients please contact Matthew Steiner or one of the adviser team at Stellar, to see how we can work together. Matthew Steiner - Director 020 3326 0682 | 07786 930 360 matthew.steiner@stellar-am.com Switchboard - 020 3907 6985 stellar-am.com

Multiple elements. One estate planning service.

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WELCOME

o here it is at last – 2020’s GBI Yearbook. It’s a little later than we hoped, but the last few weeks have been a trifle turbulent (ask Sajid Javid) and what with General Elections and Brexits, publishing schedules have rather gone out of the window. The Yearbook is intended to be the adviser’s go-to source of information about tax-efficient investments, and I think this edition proves that despite all the recent economic uncertainties, UK entrepreneurs are as ambitious and innovative as they ever have been. The EIS/SEIS space has had some exciting tales to tell in the last year, and as a number of Round Table sessions during 2019 have shown, advisers’ understanding of the schemes is improving day by day, while the capital providers are working harder to explain precisely what it is they do and how it can benefit investors at every level. VCTs continue to prosper, while BR, SITR and ESG are moving centre stage as tax-efficient options; there are

GB Investment Yearbook · March 2020

also some very welcome estate planning initiatives to help advisers, their clients and their clients’ children make the most of the coming ‘Inheritance Economy’. Throughout the year you’ll find updates on all these markets as and when they happen on the GBI website, as well as in GBI Magazine; we’re also always very receptive to initiate debates that you feel need to happen. You can also use our Open Offers platform to investigate direct investment options. I hope you find this GBI Yearbook useful as a thought leaders’ forum throughout the rest of what will, I trust, be a hugely successful and prosperous 2020. From all of us at GBI Magazine & Yearbook, With best wishes, Alex Sullivan Managing Partner

M AGAZINE

THOUGHT LEADERSHIP GB Investment Yearbook Â· March 2020

BUSINESS PROPERTY RELIEF HELPING ADVISERS UNLOCK THE ESTATE PLANNING OPPORTUNITY Jessica Franks, business line manager for tax products at Octopus Investments, offers an insight into the opportunities waiting to be unlocked in an area which can be outside many advisers’ comfort zone

GB Investment Yearbook · March 2020

Thought Leadership

Advisers who have Business Property Relief (BPR) in their arsenal are better equipped to make the most of estate planning.

uses up their nil-rate band. So some people think, let’s sell the house, take the cash and put that into an inheritance tax service.”

That’s important to know, because estate planning looks set to be the single biggest advice opportunity of the coming decade. New research shows that three quarters of advisers surveyed find estate planning leads to them advising on client assets that they hadn’t advised on previously1.

THE ESTATE PLANNING OPPORTUNITY IN NUMBERS

“When you start talking to clients about their inheritance tax problem, more often than not, they will begin to open up about all the other assets they own, whether it’s the second bank account or the holiday home in Spain,” says Jessamy Walker, a financial planner at Brown Dog Financial Planning in Berkshire. But to make the most of this opportunity, advisers will need to deal with a growing client objection. Because when it comes to estate planning, clients are increasingly expressing concern about giving up access to their capital. In many cases, this concern makes them reluctant to do any estate planning at all. This may explain why more than half of all advisers surveyed said say they now recommend BPR-qualifying investments, which stay in a client’s name and so can be sold later if need be. HOW ESTATE PLANNING CAN BRING MORE ASSETS UNDER ADVICE Estate planning can give an adviser greater visibility of a client’s assets, because they need to plan for the whole estate. In some cases, the adviser will identify assets that they weren’t able to take into account previously, and where there might be a better way to allocate them.

Thanks to rising house prices and stock markets, more people than ever are set to face an inheritance tax bill. The amount of inheritance tax paid to the Treasury is predicted to reach £6.9 billion by 2023-24. That’s an increase of £1.5 billion in just five years2. Then there is the fact that the UK has an ageing population. A woman aged 65 can now expect to live to 86 on average3. That has two profound implications. The first is that there are now more people than ever who are old enough for estate planning to be a concern. And their numbers are growing. The second implication is that clients are more wary about running out of money during their lifetime. “Even if it’s quite clear from cash flow modelling that it’s not going to be needed, people often just don’t want to give away what’s usually a six-figure sum of money,” explains Buckingham Gate’s Peter Ditchburn. “The thought that they’re not going to have it any more is often, to some people, quite an uncomfortable one.” It’s in this area that BPR can make a critical difference. THE ROLE OF BUSINESS PROPERTY RELIEF Nine out of ten advisers surveyed said say clients are increasingly reluctant to give up access to capital1.

“Talking to clients about inheritance tax planning leads to conversations about their entire estate,” says Ken Bannister, an estate planning consultant at Active Wealth Independent Financial Advisers in Hampshire. “We’ll often find that people have investment bonds and large ISA accounts, which we wouldn’t necessarily have touched before starting their estate planning.” Estate planning never happens in isolation, either. Some clients may be planning to sell their home with a view to downsizing, or selling a business as they retire, both of which would free up previously illiquid wealth. “Sometimes people sell a second property,” says Geordie Bulmer, an independent financial adviser, inheritance tax and pension specialist at AISA Retirement Planning in Bristol. “They realise they’ve got to deal with the hassle of renting it out, and they also realise that the value of it is going to be taxed at 40% when they pass away, because their home

GB Investment Yearbook · March 2020

One way some advisers address this is to tell their clients about BPR, which can enable them to do inheritance tax planning while keeping assets in their own name. Whether or not a client eventually uses BPR as a solution, discussing it as part of the estate planning conversation can help more clients feel confident about taking action. “There’s often a control thing where clients are worried about whether they can afford to give their money away”, says Jessamy Walker at Brown Dog. “That’s where BPR-qualifying investments come in; it tends to make the conversation a lot easier.” There’s another advantage to discussing BPR-qualifying investment with clients for whom they’re suitable. It brings the conversation back to something clients are comfortable with. “At the end of the day, it’s just an investment,” explains AISA Retirement Planning’s Bulmer. “Clients know me for investments, and most are comfortable with BPR once I’ve explained it.” BPR-qualifying investments are considered high risk, so won’t be suitable for everyone (see below). For the right clients, though, it represents a piece of estate planning that feels like a natural extension of all the other investments you’ve advised on. BPR-QUALIFYING INVESTMENTS ARE NOT SUITABLE FOR ALL CLIENTS Before we go any further, it’s important to remind ourselves that BPR-qualifying investments won’t be suitable for every client. They put capital at risk, meaning the value of an investment and any income from it could go down as well as up. Investors could get back less than they invest.

If you’ve never written BPR business before, or you’ve only done a small number of cases, it’s understandable if you have some queries about it. Octopus is the largest BPR provider in the market4, having helped lower the inheritance tax bill on thousands of estates by using BPR. If you have any questions about how it works, the risks involved, suitability, or anything else, please give us a ring on 0800 316 2067 to speak to one of our experts. TURNING CONVERSATIONS INTO ACTION Octopus has published a new report called Unlocking Estate Planning: How Business Property Relief is opening doors for advisers. If you want to read more about our research and its implications for your business, you can get a copy from us by calling 0800 316 2067. We also have a lot of material that can help you kick-start an estate planning conversation with a client, and then turn that conversation into action. The Untangling inheritance tax guide remains highly popular with both advisers and clients. It provides clients with a plain English overview of the major estate planning options (not just BPR). As such, it’s a useful guide to leave behind with clients and follow up on afterwards. There’s also our What I Own and Where I Keep It document. Over a thousand advisers have requested a copy of this document since we launched it last year.

Clients should also understand that the value of inheritance tax relief will depend on an investor’s personal tax situation, and on tax legislation which could change in future. Tax relief depends on portfolio companies maintaining their qualifying status.

As the name suggests, its purpose is to build a complete record of what a client owns, so their estate planning can run like clockwork when the time comes. You can help your client fill it in to make sure there are no gaps, and it’s a natural opener for a chat about estate planning.

Investors should also keep in mind that AIM-listed and unquoted shares can fall or rise in value more than shares listed on the main market of the London Stock Exchange. They can also be harder to sell.

If you want to know more about any of this material, and the other ways in which we help advisers during the estate planning process, feel free to give us a call on 0800 316 2067. GBI

This last point is particularly relevant for clients who are considering BPR as a way to retain access to their assets. Since 2007, Octopus has provided more than £650 million of liquidity to investors in its flagship Octopus Inheritance Tax Service. We aim to provide liquidity as quickly as possible, with shares historically being sold within 10 days. However, given the nature of unquoted shares it could take significantly longer.

These figures reflect the fact that liquidity is at the heart of how we’ve built our inheritance tax products. However, liquidity can never be guaranteed, and it’s important clients understand that.

GB Investment Yearbook · March 2020

1 Unlocking Estate Planning: How Business Property Relief is opening doors for advisers, published by Octopus Investments, February 2020 2

HM Treasury Budget, October 2019.

Social Security Benefits Planner, Life Expectancy https://www.ssa.gov/planners/lifeexpectancy.html

Tax Efficient Review, April 2019

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

Deepbridge Technology Growth EIS*

Deepbridge Life Sciences EIS*

Deepbridge Inheritance Tax Service*

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

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

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

––––––

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

460473691/0220/01

01244 746000 www.deepbridgecapital.com

GB Investment Yearbook Â· March 2020

Thought Leadership

ANDREW ALDRIDGE FROM DEEPBRIDGE CAPITAL EXPLAINS WHY A MANAGEMENT TEAM NEEDS VISION AND EXPERIENCE TO SORT THE WHEAT FROM THE CHAFF FOR INVESTMENT IN LIFE SCIENCES At this time, it is very difficult to extrapolate the UK economy and the sectors that make it up, from the political questions that are being asked and (hopefully) the solutions that will eventually be brought forward. I don’t wish to dwell on this but, at a time when political minds have been focused so much on the UK’s membership of the EU and the leaving of that organisation, it has undoubtedly been difficult to generate certainty and confidence amongst the business community of this island. Even as I write, we remain mired in those questions and until we have the answers then there are going to be large swathes of businesses opting for a ‘holding pattern’ approach. However, life and business must go on, and advisers will know only too well that the need for quality advice and recommendations do not simply stop in a politically uncertain time. If anything, the need to plan and prepare for any eventuality becomes even more important to clients as they want to ensure they have their financials and investments in a strong place. In that sense, let’s look at those areas where the UK is incredibly strong and, not coincidentally, where the UK Government is seeking to provide excellent support for those businesses who operate therein. One of those sectors is undoubtedly that of life sciences – if you wanted a recent example then the Government recently

announced an investment of £133m in treatments for arthritis and cancer, as well as gene-based therapies for diseases including dementia and Parkinson’s. You can fully understand why such intervention, research and the improvement of treatment, diagnosis and care options for these diseases are so important to any Government. These are major killers in this country and the Government appears focused on accurate diagnoses and early interventions – indeed it’s also providing £50 million into NHS diagnostic services to support the work currently ongoing in digital pathology and imaging with artificial intelligence. And there’s absolutely no doubt that the UK, and the large numbers of companies active in this space, often lead the way in this area, however there is only a certain amount of Government funding to go around and therefore private investment is absolutely vital. Many of the great leaps forward in life sciences come via private companies and this is where an investment manager like Deepbridge comes in. We have two main areas of investment and they tend to cross-fertilise so to speak because they’re technology and

GB Investment Yearbook · March 2020

GB Investment Yearbook Â· March 2020

Thought Leadership

life sciences. Concentrating on the latter, we operate here because there is a great deal of innovation, experience and expertise in this sector and we’re not simply talking about medical technology or treatments. Life sciences covers a huge number of sub-sectors from genetics to neuroscience, from biochemistry to drug discovery, so you can see why this is of interest to our business and why we are constantly seeking to present investment opportunities to our adviser client base.

This is why we have a specific life sciences team, completely focused on and experienced with such businesses, and who have partner relationships with Universities, hospital trusts, science parks and the like, right across the country – and overseas. This allows us to identify investee companies at a very early stage and it means we have the understanding and skill-set to take these businesses from initial idea through to a successful exit for our investors.

The problem of course is that you can’t simply magic up investment experience in this sector overnight – you have to know where to look, what you’re looking for, what the potential might be (not just in this country but right across the globe), you need the contacts and relationships, and – rather importantly – you need to be able to sort the management wheat from the chaff because you might well have the most ground-breaking product and service known to man but if you don’t have a management team with vision, nous and business acumen, then the likelihood is that you will fail.

And the opportunity here can be significant, which is why this is a key area for Deepbridge. Back in 2015, and according to a 2017 PWC report, the life sciences contributed £30.4 billion to the economy and that has grown over the last four years; plus, it’s estimated that around half a million jobs in the UK are supported by the industry. Given the ‘knowledge intensive’ focus of the Enterprise Investment Scheme currently, that’s incredibly important and we want to work with businesses which are able to grow and deliver that job creation which is so vital to the UK economy and the Treasury coffers.

And, again, that’s where a sector-experienced manager like Deepbridge can make all the difference because, even with the best will in the world, those individuals who tend to be active in their particular life sciences field are not necessarily those who can see the full commercial potential of what they are doing, or indeed how they can monetise it and ensure its success.

However, the other caveat is that, whilst offering potentially lucrative opportunities, such investments carry high risk – these are unquoted companies and early-stage companies. What we try to do at Deepbridge is, to some degree, mitigate risk by having a specialist team of experts who fully understand this fascinating sector, and to coin a phrase, have ‘been there and bought the t-shirt.’ You really can’t underestimate that experience and, with that in place, we believe that investment opportunities (and potential successes) within the life sciences sector can continue to be appealing to investors and financial advisers, whilst providing investors with the potential tax incentives available via the Enterprise Investment Scheme. GBI

In a very true sense, our involvement with such a company is perhaps less about the funding that we’re able to provide – which, don’t get me wrong, is important – but more about the business expertise we can deliver, the solutions we can offer and the pathway we can outline which will make their activities a success. Indeed, often on the Board of such companies you’ll have a mixture of academics and commercial representatives, which is clearly important, but that mix might also need a ‘third-party’ to help with strategy and with end delivery.

Andrew Aldridge is Partner, Head of Marketing at Deepbridge Capital

GB Investment Yearbook · March 2020

THE HIDDEN RISKS OF BR PRODUCTS Advisers and their clients aren’t always getting the whole picture when it comes to BR. Hardman & Co have identified several key issues that should be taken into account before any final decisions are made.

Looking from a high level, non-AIM products sound straightforward. Yet, the area is fraught with difficulties. Often an adviser is only writing a small amount of estate planning business each year, and so doesn’t have time to probe deeply into the products. Generally, clients only go through this process once and are usually in no position to become experts themselves. All too often advisers can equate low annual target returns with low risk. This is often a fallacy, and most advisers that we talk to are unaware of the real risks involved. In support of advisers, some of the providers have done an excellent job in providing education for advisers and clients. Octopus, in particular, even gets credit from several of its competitors for growing the market, which has led to it becoming by far the largest provider in this space. However, this support cannot be considered unbiased and many of the advisers that we have spoken with feel the existing research providers are not filling the gap. Hardman & Co are now providing advisers with a more informed opinion.

• Poor disclosure: Fees are the most noticeable area but there are others. Key Information Documents (KIDS have helped but many products are exempt. In many cases, indirect fees are still obscure and other costs can be substantial. For example, in the past three years, listed renewable energy funds have outperformed comparable BR products by several percentage points a year. A large part of this gap is a relative cost disadvantage. •

Weak governance: Only three managers have products with a board in which the majority of directors are independent of the product manager. Six companies have products with no non-executive directors.

Many of these are not standalone issues. While hardly any products suffered from every issue, there were very few products for which we did not have any concerns. Governance, in particular, has been largely ignored to date but is likely to come more to the fore.

• Strategy analysis: What are the businesses actually doing and what risks are they taking?

Oxford Capital Estate Planning Service, for example, had only one independent director, didn’t publish income statements (only balance sheets) and used a valuation process that was outside the audit. While we cannot directly link its issues to these, greater external scrutiny may have made the problems less likely.

• Lack of transparency: Six managers publish only abbreviated accoiunts for their products. This is a

One observation that we might make is that, of the 19 product providers in our survey, we are only aware of two

We have identified many issues, some small, some very significant, that advisers and clients need to consider in their decision making. Some of the key ones are:

choice, and it makes it difficult for external analysts to confirm what is going on in a business.

GB Investment Yearbook · March 2020

Thought Leadership

that have significant numbers of investors that have done so purely for investment reasons. That these products are not attractive to investors who are not looking for BR is telling, although we note that some providers are attracting investments into similar strategies in other products. ANALYSING INVESTMENTS

product since the latest accounts and, as yet, we have no meaningful information on how the companies are structured now. In response to these issues Hardman & Co provides a coherent intellectual framework for analysing and comparing BR companies. This can be summarised in the waterfall figure below.

Investments into non-AIM BR products means investing directly into one or more unquoted companies or limited partnerships. Many of these have ‘Trading’ in the name, as if to emphasise that they are real businesses. From an analysis perspective, this naturally suggests that the primary information to be used is the company accounts. The benefit of this approach is that it should allow analysts to look at what the products are really doing, rather than relying on what the glossy brochures say. There are some challenges, which we alluded to above. The first is that most activities take place in subsidiaries. These can be numerous and, on occasions, four or five layers deep. The consolidation of these subsidiaries is inconsistent across the sector, with many using net figures that do not reflect the underlying activity. Others fund through loans, which may or may not pay interest to parent companies at probably undisclosed rates. At least one manager uses a transaction price of a NAV based on a different consolidation basis to that used in the published accounts. The second challenge is the use of abbreviated accounts. As we mentioned before, a third of managers use these throughout the operations. Even where full accounts are given for the investee companies, subsidiaries often have abbreviated accounts. This includes some larger managers, as well as smaller ones. The final challenge is a lack of timeliness. The only restriction on production of accounts is the deadline that Companies House imposes, which is nine months after the financial year-end. We regard this as a relatively minor inconvenience, although we know there is at least one manager that has significantly restructured its

Gross return

Gearing

Expenses

Net return

Source: Hardman & Co Research

Many products are producing a low net return; most target something around 3%-5%. However, the gross return required on the underlying assets to achieve that is usually substantially higher. Given that risk is the flip side of return, the starting point for assessing relative risk is this gross return. That is not to say the underlying assets are ignored: both cross-strategy and in-strategy diversification are considered, as well as the managers’ processes for managing the underlying assets. The latter allows Hardman & Co to use its vast experience to make proper comparisons of what managers are doing and how effectively they are managing risk. It offers an invaluable service for advisers that are serious about the estate planning market. GBI

GB Investment Yearbook · March 2020

SEIS: THE UGLY DUCKLING OR BEAUTIFUL SWAN OF EARLY STAGE INVESTING? Matthew Cushen, Co-Founder of Worth Capital, explores the role of SEIS & EIS in a portfolio. In 2012 the Government introduced the Seed Enterprise Investment Scheme (SEIS) to work alongside the Enterprise Investment Scheme (EIS). I’d already had around 8 successful years of investing and enjoying 30% income tax relief. So, I was dancing a jig at receiving 50% tax relief - and hugely reducing the risk of this earliest stage investing. Since then I’ve found it curious how many investors fall into a trap of automatically perceiving that EIS investing is lower risk than SEIS investing. To start, it’s unhelpful that the tax wrappers have created two discrete classes of investment. In reality there is a spectrum of early stage investing, from just-formed businesses that are little more than an idea through to well established revenue & profit generating companies. SEIS & EIS are categories that are based on arbitrary HMRC criteria - such as length of trading history and amount previously raised in investment. Although it is fair to generalise SEIS as being the earliest stage businesses, there is much overlap and two different businesses with similar financial performance and in the same market could fall into either scheme. EIS covers a huge range of circumstances. There will be pre-revenue businesses that are raising their first investment - possibly even, say, a £250,000 investment where some investors are getting SEIS and other investors

GB Investment Yearbook · March 2020

EIS reliefs. But another EIS business might be 7 years old and reaching maturity. Not so risky based on them having successfully made it that far, but still with significant market, executional or strategic risks. Then these later stage businesses are unlikely to have the explosive growth and highest potential multiple of returns - particularly if they are already commanding a heady valuation. Too many investors focus on the attractive tax reliefs associated with SEIS/EIS investing and forget the fundamentals of investment. It is about returns. And returns are a factor of how much you pay going in and how much you get coming out. We have stumbled into an era of frothy valuations. Crowdfunding has played a part here. For both entrepreneurs and investors, crowdfunding provides the most visible valuations. It also throws up two parties – the entrepreneurs and the crowdfunding platforms - that are incentivised to drive valuations up. But crowdfunding lacks professional investors providing seasoned objectivity and desire to temper valuations. Even in the professional space we often see fund managers fishing in the same pool of deal flow, they end up fighting over the same deals and so inflating valuations. It is always useful to ask a fund manager how unique their deal flow is, how wide they cast their net and the advice,

Thought Leadership

guidance and credibility they are offering entrepreneurs that lubricates the valuation discussion. By looking at relative risk, ingoing valuation, exit returns and tax reliefs together it’s possible to be objective about the most suitable asset class. Consider the two SEIS and EIS portfolios on the following page. Each have a dozen investments, and for simplicity just two different pre-money valuations and equity raise amounts. Each portfolio has a number of successes, failures and the most frustrating of all – those that just bumble along. There are few studies into UK seed investment returns. The two most credible are ‘A Nation of Angels’ (published January 2015 by The Enterprise Research Centre (ERC), in conjunction with the UK Business Angels Association) and Siding with the Angels (published September 2009

by Nesta). The portfolios illustrated have 4 SEIS and 3 EIS failures from 12 businesses. From both market studies and our experience, this feels bearish. The SEIS portfolio predicts some higher multiples if the businesses are successful. Again, reasonably conservative. Critically there is provision in this model for further dilution. Too many investors forget that either they need to have the cash to take up follow-on investment or their equity is going to be diluted by further funding. The dilutionary impact is likely to be higher for earlier stage, lower priced SEIS investments. Before we even begin to consider the generous tax reliefs, we end up with a comparison of 44% SEIS returns vs. 23% for EIS.

GB Investment Yearbook · March 2020

Then there is the difference in returns when netting off tax reliefs. These tables only consider income tax reliefs, the picture gets a little complicated to illustrate when thinking about capital gains reinvestment relief (at 50%) for SEIS versus capital gains deferral relief (at 100%) for EIS. But when considering the 50% income tax relief for SEIS and 30% income tax relief for EIS, plus the impact of loss relief, the post-tax returns number are more pronounced at 203% for SEIS and 86% for EIS. Clearly these are made up numbers to simplify the argument. We could have had the same structures, different numbers and a different conclusion. So please donâ&#x20AC;&#x2122;t take our word for it. We encourage you to try yourself and with your clients. These two tables are pre-populated at www.worthcapital.uk/portfoliocalculators. Just download the spreadsheet and you can play with all the numbers and see the impact calculate through. By the way, in the same location there is a simple one-page summary about SEIS & EIS reliefs and criteria as well as a link to an online tool we have built to allow you to calculate the detailed SEIS & EIS reliefs for a specific investment.

GB Investment Yearbook Âˇ March 2020

One watch-out, these tables conclude with a simple return multiple, they are not giving a time-based IRR. Generally (there we go again) SEIS investments will have a longer gestation period than EIS. And for some investors the lack of liquidity might be an overriding reason to favour EIS. If this is the case, then good to consider the breadth of maturity of EIS businesses as described above. We know that thereâ&#x20AC;&#x2122;s research and compliance effort when advising clients on either EIS or SEIS. And we are sympathetic that PI insurance is sometimes impacted by advising for this asset class. But they are remarkable schemes, generous to investors and structured to support UK innovation. They are an important part of wealth planning for any investor at the limits of their pension and ISA allowances. We hope that SEIS gets a fair hearing. The tax reliefs go a long way to mitigate the generally higher risk. But the true picture only emerges when thinking through the reliefs alongside potential valuations, potential returns and relative failure rates. GBI

EIS done differently.

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

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

HOW STREAMING REVOLUTIONISED SCREEN INDUSTRY FINANCE In 2013, Netflix decided to take a punt on a remake of a forgotten nineties BBC political drama as its first piece of original, premium content. One television journalist described the decision as “probably the biggest gamble in its 14-year history”. The gamble paid off. House of Cards won Emmy and Golden Globe awards and was a hit with viewers, boosting monthly subscriptions and, crucially, improving retention. There was now a reason for viewers to stick around after devouring all of the licenced content and using up their free trials. Netflix had original content worth paying for. It was the strongest possible confirmation to company executives that producing original content – both television and film – would be the core of the firm’s future strategy. In the six years since, Netflix has gone from rivalling Blockbuster video rentals to a well-oiled content mass production line, with pockets as deep as the largest filmstudios. Take Martin Scorsese’s upcoming mob movie The Irishman, produced for Netflix. The film has budget of $200m – easily ranking it among the most expensive movies ever made. Of the company’s $13bn content budget, 85% of it went towards original content last year. The strategy has certainly been good for the share price: since 2013 its market capitalisation has surged from $5.7bn to $151bn. Competitors, both in streaming and in traditional TV and film, are flushing the market with cash in a battle for viewers. Amazon Prime is expected to spend in the region of $6bn on original content this year. It will spend $250m of that on just one show, its spin-off ‘Lord of the Rings’ series.

GB Investment Yearbook · March 2020

Hot off the success of historical drama Chernobyl, Sky announced its plans to double investment in original programming to £1bn a year. And it is no coincidence that the recent final season of Game of Thrones, flagship series of ‘conventional’ US network HBO, was the most expensive ever made. Viewers are willing to pay, but they expect nothing less than the highest-quality production values. Others are joining the market such as Apple TV+ and Disney+ the BBC and ITV are launching a collaborative effort, while AT&T-owned WarnerMedia, Viacom, Quibi, Vudu and even Snapchat are moving, or have already moved, to streaming original content as well. All of this effort is going towards meeting the seemingly insatiable audience demand for more content. In July of last year the total number of UK subscribers to the three most popular online streaming services in the UK – Netflix, Amazon and Sky’s Now TV – surpassed the number of subscribers to paid-TV packages, with 15.4m compared to 15.1m. And that is despite the fact that many paid TV services in the UK are seeing subscriptions go up too, albeit at a slower rate. What is extraordinary is that much of the content on Netflix, Amazon and to a lesser extent Now TV is inaccessible for those with paid-TV packages. Viewers are not simply substituting one for the other, they are supplementing. Some of the new entrants – particularly Warner Bros and Disney who own vast back catalogues – will almost certainly look to flex their licencing muscles and tie their intellectual property to their own streaming services in the future. The result will likely be less licenced content on the likes of Netflix and Amazon Prime, intensifying the urgency for them to create their own original content.

Thought Leadership

The result of all these converging pressures has been far more premium content with high production values being greenlit to hit our screens. Bigger budgets, both in terms of the number of programmes commissioned and in terms of the money available for making them, have become the norm. Producers and writers have arguably never had a greater chance of seeing their projects brought to screens, and they have a larger pool of suitors with deeper pockets vying for their intellectual property than ever before. While consumers may be willing to part with more of their income for premium content, they also have to part with their time. Given that the average Briton already spends about 10 years of their life watching television, where are we finding the time to watch more? The answer lies in your pocket. Phones, tablets, laptops, even work computers. In the time it takes to unlock a phone, a person can go from sitting on a bus or a train to resuming iPlayer or Netflix on their mobile device. Time that was once latent has been burst open with the accessibility of media platforms. Someone with a 30-minute train commute can

watch a whole hour of extra TV with zero change to their schedule every single day. That could easily mean watching a new series every fortnight, with so many now uploaded in full ‘bingeable’ form. Also fascinating is the fact that despite some fears in the film community that streaming could replace cinemagoing, UK box office receipts reached £1.27bn last year, the second-highest take on record. The Irishman even looks set for a box office run prior to its release on Netflix, hinting that the interests of streaming platforms and cinema could well coalesce in a way beneficial to both. Audiences have never been more eager to watch, and networks and distributors have never been more willing to spend. Streaming services have revolutionised the way we watch content. Now they are revolutionising its production, and by extension, its funding. Calculus Capital’s new fund, the UK Creative Content EIS Fund, is designed to deliver independent equity finance to screen content companies here that are well placed to capitalise on this amazing opportunity. GBI

GB Investment Yearbook · March 2020

GB Investment Yearbook Â· March 2020

Thought Leadership

A DIFFERENT WAY TO MAKE A DIFFERENCE Resonance’s Senior Investment Manager Oliver Pollard reflects on Social Investment Tax Relief (SITR), and how Resonance regional SITR Funds have appealed to investors, wealth managers and social enterprises alike. It’s worth remembering why SITR was introduced in 2014 by the UK government in the first place; it was to encourage investment into social enterprises, charities and community businesses which are committed to achieving a high impact social mission. For these organisations, SITR investment can offer a great way of raising capital to enable them to sustain or grow their positive impact. It also allowed the new legal structures available to UK social enterprises (Community Interest Companies and Community Benefit Societies) to access equivalent benefits to the well-established EIS, SEIS and VCT for private companies. SITR allows individuals making an eligible investment to deduct 30% of the cost of their investment from their income tax liability, either for the tax year in which the investment is made or the previous tax year. The investment must be held for a minimum period of 3 years for the relief to be retained. If individuals have chargeable gains in that tax year, they can also defer their capital gains tax (CGT) liability if they invest their gain in a qualifying social investment. Tax will instead be payable when the social investment is sold or redeemed. They also pay no CGT on any gain on the investment itself, but they must pay income tax in the normal way on any dividends or interest on the investment. The income tax and capital gain tax reliefs provide a substantial incentive for investors; combine this with the fact that their investment is into social enterprises which are making a positive impact on society, and it means that for certain investors an SITR Investment could make sense as part of their portfolio. To make sure new investment is directed to the enterprises which need it most and to meet EU regulations, the investment and the organisation receiving it must meet certain criteria. Organisations must have a defined and regulated social purpose. Charities, community interest companies or community benefit societies carrying out a qualifying trade, with fewer than 500 employees and gross assets of no more than £15 million may be eligible. Other conditions and criteria apply to the enterprise, investor and the investment made; for example, under

EU rules governing the initial introduction of SITR, individual enterprises can only receive a certain amount of government subsidised investment. The limit is €344,827 (about £250,000) over 3 years. The exact sterling equivalent is the spot exchange rate on the date of investment. HOW HAS SITR FARED SO FAR? Since launching our first SITR Fund in 2016, we have worked with a number of leading wealth managers and IFAs, and their clients, and find that what they really like is the similarity of SITR to EIS (Enterprise Investment Scheme), therefore the basic workings of the relief are well understood. In addition they find it easy to see the impact that the funds are making to communities. Despite the current attractiveness of SITR to both investors and investees, it is true to say that investment levels, either directly or into industry wide SITR qualifying investments or funds, have not been as high as both the government and industry envisaged; as a result of this, there is an ongoing open government consultation on how greater stimulus can be provided, through changes being made to regulation surrounding SITR. Resonance, alongside other leading industry figures, have fed into this consultation, and believe that with a number of changes SITR can gather greater momentum. For example, by slightly widening the eligibility criteria for qualifying social enterprises, such as expanding eligible activities to include community-owned renewables, shortterm asset hire, or include social enterprises that offer smaller-scale food production where the organisation is not eligible for other farm subsidy (currently farms of less than 5 hectares), we would see greater opportunities to invest in more social enterprises. Whilst modifying the tax reliefs for investors, such as incorporating Inheritance Tax Relief into the scheme or offering a 50% tax relief for investments into earlier stage social enterprises, for deals sub £150,000 (to mirror the existing Seed Enterprise Investment Scheme, SEIS) could increase investor capital into SITR schemes. RESONANCE – TAKING A REGIONAL APPROACH Resonance currently has 3 regional SITR funds, based in the South West, West Midlands, and the most recently

GB Investment Yearbook · March 2020

WHAT IS A SOCIAL ENTERPRISE? Social Enterprises look at a social problem such as homelessness or youth unemployment and develop a selfsustaining solution through an innovative business model. Their social mission drives the structure of the business, the way in which in which they trade, their staff and customer relationships and how profits are used. As well as generating a return for investors, a significant proportion of their profits are reinvested to further their social mission.

launched was in the North West. The largest of the funds is the South West which has to date (end January 2020) has made 16 investments into social enterprises in the region. Investors into the funds have either come directly into Resonance, or through the wealth managers or IFAs that we work with. By taking a unique regional approach we believe that this has major benefits to both investors and social enterprises. For investors, it allows them to invest in a region in the UK where they may live or have a strong connection. For social enterprises having investment managers on the ground in these regions, it means that we can develop unique insight and relationships into a region, understanding the social enterprise landscape and the challenges and opportunities that present themselves. Our plan is to open more regional SITR over the coming years. 2019 was our most successful year of investing in social enterprises from our SITR funds; we invested nearly £1m into 7 social enterprises. Whilst tackling different social issues, all the investee social enterprises have similar goals and social missions: to have a positive and sustainable impact on the communities and individuals they support, helping make the world a better place. Their work has been primarily helping to improve people’s life chances by providing health and wellbeing support, mentoring, training and employment opportunities for those in need - in particular: • Young people and children with social, emotional or mental health problems and those with physical and learning difficulties • Adults struggling with addiction, employment issues or criminal behaviour • Schools, communities and cultural organizations 2020 promises to be an exciting year for SITR, with the government consultation and more and more wealth managers/IFAs and High Net Worth Individuals considering social impact investing as a way of making a greater difference with their capital. Resonance are a social impact investment company, founded in 2002, currently with over £210m of funds under management, and a mission to connect capital with social enterprises. We are committed to forging a bridge between transformational social enterprises and investors who value both their profitable business model and the social mission that drives them. Oliver Pollard is a Senior Investment Manager at Resonance, with responsibility for the development of Resonance’s SITR Funds across all regions of the UK. Oliver.pollard@resonance.ltd.uk. For more information about Resonance visit https://resonance.ltd.uk GBI

GB Investment Yearbook · March 2020

WHAT IS SOCIAL IMPACT INVESTMENT? Social impact investment is simply investment made into social enterprises, with the explicit objective of facilitating the growth of the impact, as well as the financial returns. Actively recording and reporting this impact data is a key feature of social investment. Whilst ethical and sustainable investment might focus on reducing harm, impact investing looks to actively create positive change.

Thought Leadership

PEOPLE LIKE TO BE SCARED

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

Serious Investment Serious Entertainment www.ironboxcapital.com

GB Investment Yearbook Â· March 2020

Thought Leadership

OXFORD TECHNOLOGY WHERE LAST-MINUTE NEEDN’T MEAN SECOND-BEST

For 36 years now, founder Lucius Cary and the team at Oxford Technology Management have been helping generations of original thinkers to push the boundaries of science and technology. Their unusual blend of commercial know-how combined with a sympathetic understanding of scientific processes has delivered more than 150 start-ups since 1983.

Human nature being what it is, many investors wait until near the end of the tax year before thinking about making tax-efficient investments in order to reduce their tax bills. Every year for the last 5 years Oxford Technology has been approached by investors in March saying “I have now worked out my tax bill and would you be able to invest to reduce my tax bill and give me a spread of investments?” The answer is always yes. We have invested up to £500,000 in 5-6 EIS opportunities for individual investors at very short notice. This year we thought we would be more proactive and create the Oxford Technology Last Minute 2020 EIS Fund. We could accept up to £11m of investment and invest this amount in EIS investments before 5 April 2020 in companies which we know well and in which we are

GB Investment Yearbook · March 2020

The companies for investment will include some of the following: Combat Medical manufactures devices for the treatment of bladder cancers. The standard treatment for bladder cancer results in up to 78% recurrence of tumours which then require increasingly drastic surgery. Combat’s treatment reduces recurrence rates by up to 4 times. Oxford Technology believes the value will increase dramatically with new evidence from the clinical trials and when they are able to access the US market. Combat’s treatment has now been used more than 40,000 times in 30 countries. It is no longer a start-up. Expend is an award-winning expense management platform and prepaid Mastercard® that provides businesses with easy, fast and flexible expenses automation. Several large accountancy firms now recommend Expend to their customers. Several strategic

partnership talks are taking place with the potential for millions of new users. Sales are now growing fast, at around 10% per month. Bioarchitech is developing a novel virus to kill cancer cells. The CEO, Dr Geoff Hale, has an international reputation in therapeutic immunology. Bioarchitech is raising a Series A round to fund trials. Atelerix has a gel which allows cells to be shipped without being frozen. Cryopreservation is expensive, time-sensitive and damaging to the cells. Recent testing showed Atelerix will preserve T-cells for at least 10 days while exceeding viability levels set by the FDA. Atelerix may enable the development of drugs, easier administration of stem cell therapies, and better handling of pathology samples. Atelerix has achieved its first sales and is growing.

already investing from one of our existing funds. We will be able to accept applications until 22 March. Oxford Technology invests in high risk, high reward science start-ups near Oxford and we have been doing this since 1983. Our twelfth fund, OT(S)EIS, started in 2012 and remains open for investment. It takes advantage of the SEIS and EIS schemes, which are ideally suited to this activity. OT(S)EIS has now made investments in 40 science start-ups. Three of these have failed, leaving 37 active companies, some of which are now growing strongly with sales in the US and China, as well as in Europe. In every case, the initial investment was an SEIS investment, made right at the start when the risks were at their highest. Typically, the companies consisted of just the one or two founders at the start and often we were the only investor to begin with. The largest today has 94 employees. Almost all the investments are within an hour’s drive and this enables us to get actively involved. We aim to have frequent management meetings rather than formal quarterly board meetings. We get actively involved to help set the pricing and sales strategy and

GB Investment Yearbook · March 2020

Active Needle Technology adds an ultrasound drive to a needle, so the amount of force required to insert the needle is much reduced, resulting in less pain upon insertion and less risk of overshoot. The first product for Core Needle

may visit initial customers. The founders may be awardwinning scientists, but they may not have negotiated a sales agreement before. Having been actively involved with more than 150 start-ups since 1983, we have unrivalled experience in this, and if we are not able to solve a problem ourselves, we often know someone who can. As our investee companies grow, they often need more capital. Our OT(S)EIS fund is structured in such a way that we can lead the fundraising and provide some of this follow-on capital from the fund. Lightpoint Medical provides a good example. Lightpoint has developed a technology which enables surgeons to see whether tissue is cancerous or healthy during an operation. The cancerous tissue shows up as red on the special camera. In one case the founder, himself a doctor, was with a surgeon in the operating theatre for a prostate operation which was being done by keyhole surgery, but not using Lightpoint technology. The camera revealed a growth on the nerve bundle. “Now I have to play God.” said the surgeon, “If that growth is benign, I can leave it. But if it is cancerous, I should cut it out. But if I cut it out, that will

Thought Leadership

Lupe Technology is about to go into production with what it believes to be the best vacuum cleaner in the world. More than 1,700 units have already been sold via a Kickstarter campaign.

Biopsy, which deflects less and so more accurately collects the correct tissue, is undergoing CE marking. The second product under development is for tattooing with less trauma.

Oxwash has opened its first laundry in Oxford, believed to be the most energy efficient and greenest laundry on the planet. The founder was previously working on life support systems for living on Mars for NASA. Washing is at room temperature. The cleaning agent is Ozone, generated on site. Water is recycled. Delivery and collection is by electric three wheeler bike. All microplastics are filtered out so they don’t get discharged to the ocean. One of the founders of Twitter has just invested. The plan is to open thousands of units globally. Animal Dynamics is a spin out from Oxford. The

founders are experts on the way birds and insects fly and how fish swim. The aim is to use this knowledge to make better flying machines and more efficient means of propelling ships. Propellers are massively inefficient when compared to what nature can achieve. The company has now got to sales and is growing fast. There is no guarantee that Oxford Technology will make investments into any of these companies, as circumstances change quickly within start-ups. However, the Oxford Technology Last Minute 2020 EIS Fund will make at least 6 more EIS investments in the 2019/20 tax year. The fund will remain open until 22nd March 2020, unless the fund maximum (£11m) is reached. Details of all these companies can be found by downloading the latest OT(S)EIS quarterly report from www.oxfordtechnology.com

result in serious adverse consequences for the patient, probably including incontinence and no more erections. At the moment I have to guess, but your technology would be able to tell me if it is cancerous or not.” It is not hard to understand why surgeons the world over are keen to use Lightpoint technology in their operations. Lightpoint is now in use in the UK, Holland, Germany and the US.

Lightpoint is currently raising £5m of which it has already raised £2.4m and we would be able to invest some of any money subscribed to the OT Last Minute Fund in Lightpoint. All the documentation is ready and we know the company well. Of course, some risk remains. But the risks are now a hundred-fold less than at the start when Lightpoint was an idea with no product and no sales.

We were the first external investor in this excellent company when we made an SEIS investment of £75,000 in June 2013. Then we were able to make a follow-on EIS investment of £75,000 in March 2014 at a significantly higher share price. The fact that we were investing ourselves in a company which we knew well by this time, having had regular meetings with the founder during the intervening months was encouraging to other investors and more than £1m was raised in this round. We have continued to support this company, our most recent investment being of another £27,000 in March 2019. Naturally, if a company is not going well, then we do not make follow-on investments. There is never any point in making bad investments for the sake of it.

The 5 or 6 investments will be selected from our existing portfolio. We cannot be precise about which companies will be included today, and exactly how the investment will be split between them. If one of these companies raises all the capital it seeks soon, the Oxford Technology Last Minute Fund may not be able to invest. Events like these are beyond our control. We will be able to provide investors with a portfolio of 5 or 6 EIS investments which are at the high risk/high reward end of the investment spectrum, but which are now a good deal less risky than when our original SEIS investment was made, a few years ago, and which was almost always at a time before there were any sales, let alone profits. GBI

GB Investment Yearbook · March 2020

PREPARING FOR ‘THE INHERITANCE ECONOMY’ Experts are estimating that over the next 3 decades in the UK, a quite staggering £5.5 trillion will be passed down through the generations. This isn’t just good news for the ever-growing numbers of heirs and heiresses, it also offers unprecedented opportunities for financial advisers and wealth managers.

Matthew Steiner, corporate development director at Stellar Asset Management, updates us on how advisers can explore this potentially fertile landscape. Back in 2019, we launched Stellar ICENI. Most people probably associate ‘Iceni’ with Boudicca, and the ancient meaning of the word was indeed ‘tribe, family and lineage’. We thought this was a highly appropriate name for a new programme designed to preserve wealth and to keep it in the family by passing it on to future generations.

• significantly increase planning business

their

volume

estate

• strengthen existing and build new relationships with the heirs of their clients • create a business continuity plan for assets under management • identify and connect with the wider client family and their advisers, and

It occurred to us that there are too many areas of specialist advice, with no overlap, to reasonably expect a financial adviser to be 100% conversant with all aspects of estate planning business.

• strengthen and grow their client base.

After all, the key disciplines of estate planning to support financial planning include investment management solutions, legal services, tax advisory services and estate administration – all specialist sectors.

• Legal services expertise in family and inheritance law, offering wills, Power of Attorney and Trusts

So we created Stellar ICENI with input and co-operation from a panel of leading independent financial advisers to provide a complete and collaborative estate planning service to advice professionals.

It offers advisers one-stop access to the vital tools they need in order to:

GB Investment Yearbook · March 2020

In addition to Stellar’s expertise using Business Relief qualifying activities for Inheritance Tax planning; Stellar ICENI’s service provider partners include:

• Bespoke Tax advisory expertise; important for complex cases or where businesses are involved • Estate administration services - to ensure the tax efficient transfer of wealth to the next generation

Thought Leadership

SIX MONTHS LATER... Interest and uptake have been gratifying. We launched the scheme to IFAs via a series of seminars across the country, explaining how they can use estate planning as a business tool, and that both young and old can benefit – not just the advisers themselves, but their clients too. They quickly saw how working together could make them much stronger, and right from the start the feedback was that the scheme was long overdue in a sector which requires so many different facets of specialist knowledge; it brings it all together. We learned a lot too – for example, we were startled how many advisers simply don’t discuss Inheritance Tax with their clients. And while it may not be a forensic examination, a show of hands at one seminar revealed that an extraordinary 80% of advisers have never used Business Relief before.

This year we will be developing a toolkit for advisers who want to develop their estate planning skills. We will help them harness the power of Business Relief and provide their clients with robust planning for their estates. We will provide visual aids, infographics and case studies for them to present to their clients, and we’ll help them with spotting opportunities in their client base and among their professional connections. We’ll enable them to drill down into their clients’ needs and wishes and see what aspects of estate planning will help leverage their business. We also intend to go out on the road in partnership with IFAs, so Stellar ICENI and advisers can together present directly to a wider client base. GBI

FURTHER ACTIVITY FOR 2020 Stellar ICENI is all about delivering specialist estate planning cohesion to the benefit of advisers’ clients, while unshackling IFAs to deliver what they do best.

GB Investment Yearbook · March 2020

M AGAZINE

FOCUS INTERVIEWS 36

GB Investment Yearbook Â· March 2020

Focus Interviews

FOCUS ON DOWNING VENTURES EIS Laurence Callcut, Partner and Head of Sales at Downing, and Portfolio Director Mike Kennedy took the time to chat to GBI Magazine about EIS in general and Downing in particular as we head towards a new year.

What was your approach in 2019? Downing Ventures EIS has now backed 60+ companies. Throughout 2019 we saw more and more capital being deployed back into the portfolio, while the businesses scale up and raise larger follow-on rounds as their progress attracts wider investor interest. We aren’t afraid to step up and lead funding rounds and are writing larger cheques alongside syndicate partners to provide more firepower to our portfolio. What’s your firm’s USP? Our ladder of funding means we’re able to identify fast growing, high potential scalable UK businesses, invest and continue to financially support them as they progress through the start-up life cycle. We build long-term relationships with founders in sectors we know and are passionate about and have the funds to follow-on. Has your firm changed in any way during the year? We are becoming increasingly thematic in our investment approach. To do this well you need to bring in people that are completely immersed in their sectors, bringing with them a wealth of relevant knowledge and powerful

networks. Will Brooks (30 years investing in the healthcare space) joined our team to head up our investments in healthcare and life sciences, and James Nettleton recently joined us from InMotion (Jaguar Land Rover venture capital arm) to focus on transport and mobility. Our Portfolio Management team has recently been strengthened with Laoise McGarry, to ensure we are encouraging governance excellence and developing open and collaborative relationships with portfolio FDs and CFOs. The UK appears to have a strong start-up/ entrepreneurial culture – what do you put that down to? It hasn’t happened overnight. Our world class institutions, universities and centres of excellence have encouraged the entrepreneurial spirit, which is as much a feature of today’s commerce as it was a rarity just 25 years ago. The entrepreneurial genie is out of the bottle for good now. What are your views on recent changes to EIS? Two significant changes resulting from the Patient Capital Review, have been particularly impactful. The risk to capital

GB Investment Yearbook · March 2020

test, which, because of our overall investment strategy, aligned EIS more closely with us, and the introduction of knowledge-intensive companies make the whole EIS scheme more flexible and realistic. Do you have any fears that future Government changes could undermine the schemes’ effectiveness? In the Conservative manifesto, the Enterprise Investment Scheme is said to be ‘spectacularly successful’ and the government will continue to support it. Also the UK is attractive thanks to EIS and the UK growth engine is too important for politicians to tinker with too much - although you never know with Whitehall. If you could influence changes to the schemes, what would you suggest? Keep an open mind and constantly consider innovation in these schemes, which are the envy of the world. We’d also suggest that SEIS could be extended and the cap raised. How can EIS investments continue to help diversify client portfolios? It’s the fact that these assets are not correlated with mainstream, traditional portfolios – most investors don’t really have access to smaller start-up type businesses, which nowadays are generating a lot of media coverage and investor interest. Furthermore, this type of investment is hard, if not impossible, to access through traditional product structures. Many investors today are more sophisticated, and attracted to the esoteric. There’s a philanthropic angle, too – people like to feel they can do good at the same time as potentially doing well from investments themselves. What sectors do you specialise in and why are these important? We embrace thematic-based investing – looking at macro level trends in, for example, the healthcare and fintech sectors, along with tech-enabled brands and transport & mobility. Knowing the entrepreneurs industry and getting down to the detail fast is how we appeal to the best entrepreneurs and attract and secure the most attractive deals. Are advisers more receptive to the schemes? It depends on their clients. Tax relief was always the major attraction, but now we’re going back to more of a focus

GB Investment Yearbook · March 2020

on investment. So, yes, more receptive, but maybe to a narrower group of investors. Are clients more savvy about EIS and SEIS nowadays? Probably yes, thanks to education in this area. As advisers have become more interested in the opportunities, so too have their clients - it trickles down. Again, with the focus swinging back to investment, IFAs are keen to offer clients more options. Are there more clients becoming interested in the schemes? Most of the growth has probably come from over a decade of pension regulation changes, which led to a surge in interest, particularly when lower risk options were available. This is now slowing, although we expect continued organic growth. How can advisers continue to educate their clients about the investment opportunities in EIS? Again, trickle-down, if advisers keep building their knowledge, their clients should follow. If the adviser understands the sector well and is enthusiastic about it, a client will more likely be receptive to the conversation. Does the industry need to do more to promote the schemes to a wider investor base? Not really, it’s not too exclusive as it is. Maybe it needs more promoting and updating to IFAs, especially given the Patient Capital Review, which makes EIS a very different animal from before. Did the continued confusion over Brexit affected the future of EIS? No specific impact – the overall appetite for investment is rather subdued, but there’s been nothing dramatic so far. Are there any clouds on the horizon? The UK is Europe’s tech centre and, like any industry, it needs certainty. It needs access to talent, to customers and to capital - and uncertainty is not its friend. GBI

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

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

020 7201 8990 contact@triplepoint.co.uk

VENTURE FUND

www.triplepoint.co.uk

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

GROWING THE TAX-EFFICIENT INVESTMENT MARKET Few people are better qualified to shed a little light on this complex area than Daniel Rodwell of GrowthInvest. He was kind enough to take the time to talk to us about his background and what he is hoping to achieve in the future.

GBI : Daniel, tell us a little about yourself and about GrowthInvest I’m the Chief Executive of GrowthInvest. My own career journey started in finance, where I spent 20 years managing institutional and private funds focusing on equities and derivatives. During this time I was also an active angel investor involved with mentoring and supporting earlystage growth businesses. This drove me to found GrowthInvest: a technology platform allowing financial advisers and investors to access investment opportunities across the whole alternatives market. We make it simple for advisers and their clients to invest in tax-efficient SEIS, EIS, VCT and IHT products - we take care of all the administration, monitoring and reporting too. GBI : Tell us the story behind GrowthInvest: what opportunities did you see in the market? GrowthInvest came from a mix of personal experiences and market drivers. As an active angel investor, I was investing in high-risk, early-stage businesses - and with this, I experienced first-hand the burden of paper-driven applications, ongoing administration and a real lack of consolidated reporting on portfolio performance. GrowthInvest was built to solve these problems. As a team we are passionate about growing the alternatives market more broadly, and we believe the GrowthInvest technology is a vehicle to do this. We are digitising the application and administration processes, and offer granular online reporting - so advisers can access tax reliefs and monitor real-time performance across multiple investment portfolios. Another feature is that the GrowthInvest platform can

GB Investment Yearbook · March 2020

consolidate new and historical investments; so no more spreadsheets or paper folders - just our simple and secure portal that does all the hard work for you. GBI : Why do you believe digitalisation is crucial in the tax-efficient and alternatives market? Starting out in this industry we saw a disconnect in the process: investors were putting capital into exciting new technologies, but they were having to do it in a very manual way. The processes relied heavily on cheques, wet signatures and a lot of paper administration - and we are on a mission to change that. GrowthInvest makes it easy to invest, monitor and report on portfolios of investments in a simple, digital way. We are embracing technology and digitalisation as a way to connect to a wider audience of wealth managers, financial advisers and clients: reducing barriers to entry and increasing accessibility for more qualified investors. We have seen this as especially important for advisers and clients considering how to diversify their investment strategies in the light of Brexit and political uncertainties, and we are delighted that GrowthInvest is being used as a holistic planning tool in addition to offering core platform functionality. Ultimately, I believe digitalisation drives transparency, which is what the market really needs to attract increasing numbers of high quality investors and keep capital flowing into exciting early-stage investment opportunities. GBI : Why is diversification so important? It’s always important to have a wide range of investments, whether you are measuring in terms of sector, stage, investment philosophy or fund manager. This spreads risk and allows clients to have a well-structured portfolio.

Focus Interviews

Other things that are important to look at include risk profiles for each investment, deployment timescales (these can vary hugely), and the track record and quality of fund managers. We also believe that it is important to look at the amount of monitoring and reporting. As a platform, we get a whole-of-market view and allow advisers and their clients to research a diverse range of products and providers. This means that you are able to research newer entrants alongside the more established fund managers, as well as researching a full range of sectors and investment approaches. As ever, with all investments itâ&#x20AC;&#x2122;s key to understand the needs of the underlying investor and client, and to make sure you do sufficient due diligence on every potential case. This is another reason we work closely with independent research houses across the market. GBI : What are your thoughts on the future of the market? At GrowthInvest we are very excited about the future of the alternatives market. I believe this part of the market delivers a huge amount of value to the UK economy and it is enormously exciting to be part of it. We are also confident that there is a strong pipeline of investment opportunities amongst early-stage, highgrowth businesses and expect to see an increase in assets and flows. High-potential growth companies pave the way for future ideas and innovation, and it has never been more important to power the UKâ&#x20AC;&#x2122;s start-ups with the capital they need to scale and succeed. GBI : Daniel, thanks for your time.

GBI

GB Investment Yearbook Âˇ March 2020

SNAPSHOT FOCUS ON NOVA GROWTH CAPITAL Nova Growth Capital CEO Andy Davidson is a serial tech entrepreneur and has co-founded more than 100 tech businesses either directly or through Nova. He started his career as a software engineer before starting his entrepreneurial career where he has spent the past 10 years creating and managing EIS & SEIS investment portfolios. Nova and Nova Growth Capital are his only executive roles, and he was kind enough to take some time out to chat to us. What are you looking forward to in 2020? Our approach to investing remains unchanged for the coming year, we are a provider who has an impact beyond investment. We fundamentally believe in and support the power of start-ups and want to open that up to as many investors as possible. Our fund is changing how investors can access seed stage assets through changing the structure and operations of fund management. The results are true growth opportunities in the spirit of what SEIS and EIS was always intended for. We continue to challenge the typical returns for this type of investment whilst lowering the barriers to entry for investors. We are continuing to change some of the outdated industry status quos by using APIs not signatures, having digital applications and documentation, not paper based, introducing monthly contributions and deployments. This all means more investors can benefit from one of the highest returning asset classes available on the market. Our approach has changed the success rate of seed stage start-ups. We are removing the existing barriers to entry for start-up founders with great problems worth solving. This is changing how deals are sourced and providing us with a truly unique and bespoke, proprietary deal flow. In doing so, we are building start-ups that will change

GB Investment Yearbook · March 2020

sectors and industries forever that would otherwise have never been realised. By upping the success rate, we are creating wealth on both sides of the deal, changing the preconception that VCs are high stakes for all involved. We are fundamentally changing the way companies are founded, funded and scaled and that won’t change. Throughout 2020 we have new products that we want to introduce, that will further build upon this, so watch this space! What sets Nova apart from the rest? Our specialism is managing investment in early-stage, knowledge-intensive, SEIS & EIS eligible technology businesses. We do this with a unique empathy toward those sat on both sides of the table, both investor and receiving business founder. As opposed to many pure play investment houses, at Nova we have a track record of both investing in and co-founding successful early-stage businesses with entrepreneurial founders for over 10 years now. Being able to leverage Nova’s ‘start-up generator’ business model gives us the ability to offer investors a direct route to the large and varied portfolio spread of high growth technology start-ups that’s required for SEIS & EIS to work. The success rate of our start-ups is five times higher than

Focus Interviews

the industry average which mitigates a lot of the risks that have been traditionally involved in investing in early-stage businesses.

saw over 50,000 successful applications between 200818, bringing with it a diversity of entrepreneurial populus that we’re now enjoying the benefits of.

It’s our ability to do this without incurring the costs that other providers do in sourcing the deal flow that has allowed us to develop a better SEIS & EIS investment product that maximises the benefits for both investors and the businesses it’s deployed into.

Additionally, while London remains the epicentre of the UK’s growth businesses, the past 10 years have seen fantastic improvements in the start-up ecosystems throughout the UK with many fantastic support networks available to start-up founders. This means start-up founders now have great opportunities and support available when starting a business no matter their geographical positioning within the UK.

The unique space that our business occupies has allowed us to deliver fantastic returns for both our investors and our start-up portfolio companies. We’re continuing to see industry leading growth rates and the long term economic benefits that this creates makes our SEIS & EIS fund stand out amongst other investment products. The UK appears to have a strong start-up/ entrepreneurial culture – what do you put that down to? I believe the UK remains one of the most attractive locations for founders to start a business anywhere in the world. The population density, diversity and income levels, along with dedicated government initiatives have continued to fan the entrepreneurial spark and have made the UK a leading producer of growth companies in recent years. EIS and SEIS are great examples of such initiatives, supporting both business founders and investors to bridge the finance gap that exists where many promising businesses can struggle to obtain growth funding. Supporting high growth potential, smaller and younger UK companies in turn creates jobs, boosts economic growth, and supports a culture of innovation within the UK. Last year’s introduction of the Innovator and Start-up Visa routes, although still in their early days, have been a move to further boost entrepreneurship and innovation in the UK. These are following on from the success of the previous entrepreneur visa, and in my opinion still need some refinement to improve on the success of the former, which

How can EIS investments continue to help diversify client portfolios? With the right products EIS, and also SEIS, are a fantastic diversification strategy for clients portfolios. They’re a great option for stocks with a higher risk profile that are supported by significant tax advantages that offset the risks. However it’s important that the EIS funds contained within a portfolio also offer the right level of diversification too. For example with Nova’s SEIS & EIS fund we’re diversifying on three fronts, 1 - it’s a hybrid fund that’s split between EIS and SEIS and their varying risk profiles, 2 - we deploy across a high number of portfolio businesses with just one investment, guaranteeing a minimum of 10 underlying businesses and 3 - due to our sector agnosticism the investment is gaining diversity of sector and asset classes. Our diversity is something that we pride ourselves on, it’s key for our success that we’re able to offer advisers assurance that through our fund they are truly diversifying their client’s underlying portfolio of investee companies in terms of sector exposure and spread. Which sectors do you specialise in and why are these important? In terms of portfolio spread we are largely sector or vertical agnostic. Whilst we do have strategic partnerships in place to support the commercialisation of some of our

GB Investment Yearbook · March 2020

portfolio businesses, for example Chelsea & Westminster Hospital Trust for Health and Medical Technology products, we pride ourselves on maintaining a truly diversified investment product. Our underlying investee businesses span everything from a Dungeons & Dragons inventory app to a hand hygiene monitoring system for hospitals. The reason for this is twofold; from an investment manager perspective it means we’re able to offer one product that negates any sector specific risk factors. A truly diversified product, made up of multiple assets across a broad sector split means that advisors can achieve the required risk profile from just one provider. The second reason being that through Nova we have proven our ability to put the people and processes around a founder who is the ‘industry domain expert’. When partnered, combined we have the required skill sets and depth of knowledge to achieve success irrespective of industry. How can advisers continue to educate their clients about the investment opportunities in EIS? I believe that fund managers such as ourselves have a responsibility to provide the necessary education, to both advisors and their clients, that’s required to grow this sector of the investment market. Whilst advisers are becoming more receptive to the scheme, a big part of our strategy to gain adoption for our own fund has been in providing education about the best way to advise their clients on how to build a successful investment portfolio that includes EIS stocks. The core messages of our discussions have centred around the importance of offering clients a whole market view, being upfront about the risk profile and required term hold and reiterating the benefits beyond the tax advantages. Also covering the importance of portfolio spread within EIS and encouraging advisors not to forget about Seed

GB Investment Yearbook · March 2020

EIS (SEIS), which is one of the most tax advantageous investment schemes in the world. I would also encourage advisers to engage with industry bodies such as EISA who are making a real effort to educate the market too. They’re regularly providing information, events and networking opportunities to help improve understanding amongst advisors that they can pass on to better advise their clients. If you could influence changes to the schemes, what would you suggest? I think in their current format the schemes are doing a great job of mitigating high tax bills for investors, and successfully providing some really interesting opportunities in high growth potential businesses that are EIS or SEIS registered. One suggested change I would make would be to the structure of EIS and SEIS; I’d like the tax benefits awarded to investors to also include the directors of the companies where the funds are being deployed. It could be argued that the business founders are those who are supporting UK enterprise the most, yet they are not offered the same income tax offset. I would also suggest that the upper limit of SEIS capital that can be invested in a company should be increased from £150K to £500K. It is still very difficult for a company that has consumed £150K of SEIS capital to have appropriate traction to position itself as an easy EIS investment. The extra tax relief afforded to SEIS would make the extra £350K easier to secure, providing better continuity of capital to companies that will benefit from it most. GBI

M AGAZINE

ENHANCED COMPANY PROFILES GB Investment Yearbook Â· March 2020

VALA CAPITAL Phone: 0203 9510590 Email: info@valacap.com Website: www.valacap.com

COMPANY OVERVIEW:

Jasper Smith, Founder

James Faulkner, Director

Vala Capital is an investment business founded by a group of serial entrepreneurs. The members of our investment committee have invested in more than 50 companies, generating an overall return of 3x. We founded Vala to offer clients the opportunity to invest alongside us, backing inspirational founders to build trailblazing businesses and generate significant returns. KEY PERSONNEL: Jasper Smith, Founder

Paddy Willis, Arthur Hughes, Investment Investment Committee Member Committee Member

Jasper has responsibility for our investment pipeline and the mentoring we provide to our portfolio. He has created, built and sold numerous companies in the media, technology and engineering sectors. Past ventures include Static2358, a design and digital media company; Electra Entertainment, an internet television technology platform; and PlayJam, a TV and mobile games network. James Faulkner, Director James manages our relationships with financial advisers. He has worked in sales and marketing for over 30 years, including roles with PwC, ABN Amro and Dun & Bradstreet. He is a Chartered Member of the CISI and holds the Level 4 Investment Advice Diploma. Arthur Hughes, Investment Committee

John Swingewood, Investment Committee Member

GB Investment Yearbook Âˇ March 2020

Arthur spent ten years with investment and advisory firm Babcock & Brown, overseeing numerous debt and equity transactions. In 1991, he took over Prebon Yamane, a broking business, which he sold to Collins Stewart Tullett for ÂŁ125m in 2004.

Enhanced Profiles

Paddy Willis, Investment Committee Paddy was co-founder of Plum Baby, a range of organic baby foods. Launched in 2006, the company was sold to Darwin Private Equity just four years later, in a deal which valued it at £10m. Paddy later co-founded Grocery Accelerator, which has helped food and beverage start-ups raise more than £5m. John Swingewood, Investment Committee After senior leadership roles at BT and BSkyB, John has led several companies through significant growth and successful exits. He was Chairman at CENTRALNIC, which floated on AIM, and Chairman at DITG and Executive Chairman of Emizon, both of which were sold through trade sales. INVESTMENT STRATEGY: We focus our investments on the sectors that we know best, where our expertise and networks can make a valuable impact on the progress of our portfolio companies. Our main fields of interest are digital media and entertainment, engineering, fintech, leisure, and food & beverages. This gives us wide spread of investments, ranging from disruptive technology to more traditional businesses. We invest in both pre-revenue and post-revenue companies, and we will make follow-on investments in companies that continue to hit their agreed milestones. Some examples from our current portfolio include: Arksen is developing innovative semi-autonomous explorer yachts for pleasure, research and commercial uses. The company has also created an innovative ownership model, and it plans to make a major contribution to marine conservation and education efforts around the world. PlayWorks creates games and video content channels accessed through TV streaming devices (e.g. Roku) and connected TVs, as well as developing games for the burgeoning instant messaging market.

Asda supermarkets. Further supermarket deals are in the pipeline, and the company is also expanding in the luxury hotel sector. USPs: We invest in regular tranches, creating two big advantages for investors. Firstly, their capital is fully deployed into EISqualifying companies soon after they subscribe. Secondly, investors are able to see information about the companies would likely be included in their portfolio, before they commit to making an investment. All our investments are selected and mentored by a group of serial entrepreneurs – individuals with real experience of the ups and downs of growing and selling successful businesses. We believe in fair and transparent fees. 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. KEY FUND: The Vala EIS Portfolio is an evergreen fund, targeting a return of 2x the amount invested. Subscriptions are typically diversified across a portfolio of 6 to 10 companies, with a blend of new and follow-on investments. We only invest in companies that have received Advance Assurance of EIS qualification from HMRC, and our tranche-based approach means investors’ capital is generally deployed within 3-6 months of subscription. Our next investment 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.

Great British Biscotti Company’s biscuits are stocked in a wide range of stores, including John Lewis cafés and

GB Investment Yearbook · March 2020

o2h VENTURES LIMITED Phone: Email: invest@o2h.com Website: www.o2hventures.com

COMPANY OVERVIEW:

Sunil Shah, Fund Manager

o2h Ventures Limited has launched the o2h therapeutics and AI fund which is the first S/EIS fund in the UK solely focused on early stage biotech therapeutics and related AI opportunities. The geographic scope shall be UK wide including Oxford and London but will target the growing Cambridge biotech cluster. The Fund is structured to be S/ EIS compliant providing tax breaks for UK taxpayers. The biotech sector is one of the leading sectors in the UK economy. The large pharma companies now rely on the small innovative biotech companies for new ideas in disease areas such as cancer, genomics, anti-ageing and neurosciences amongst others which has led to higher potential exit valuations. The Fund will widen the community of investors that will help expand early stage research in the UK. The o2h group team are leaders in the biotech community and have been actively involved as investors, holding various board/industry positions as well as being engaged in grassroots scientific activity for over 20 years. o2h group operate from their proprietary 2.7 acre Mill SciTech Park where they are developing a unique model for incubating small life science companies. KEY PERSONNEL OR FUND MANAGER Sunil Shah, CEO of o2h ventures, manages the fund alongside brother Prashant Shah. Both have been working in the biotech/pharma space most of their careers and have invested personally in around 20 biotech companies, mainly in the Cambridge area.

GB Investment Yearbook Âˇ March 2020

Enhanced Profiles

Sunil Shah is a serial entrepreneur having begun his career in the Life Sciences team at PA Consulting group followed by co-founding two companies in the information technology and life sciences sector. The second of these companies, Oxygen Healthcare Ltd was acquired by Piramal Enterprises Ltd (BSE: PEL). Sunil has exited investments with ~10X returns in Acacia Pharma and Privitar. Sunil was awarded Angel of the Year 2019 by UKBAA and the Oxford Biotechnology Network Special Recognition Award for his active participation in backing high growth potential startups and early-stage businesses in the UK. He is a Board Director of Cambridge Angels, the Biotech Industry Association and also is a member of the Advisory Panel of Cancer Research UK (CRUK) which is the UK’s largest cancer research charity. INVESTMENT STRATEGY The investment focus of the Fund will be therapeutic drug opportunities or technologies that enable drug discovery with an emphasis on Artificial Intelligence (AI). The geographic scope shall be UK wide but will target the growing Cambridge biotech cluster which is now the global headquarters of AstraZeneca, and is home to many biotech companies some of which have subsequently been snapped up by large pharmaceutical companies.

collaborate with big pharma. Sunil was the first investor in the business and Chairman of the Board. USPS • Engaged in grassroots scientific activity for over 20 years mainly in Cambridge, UK. • Built an ecosystem in UK and India to support early stage biotech companies. • Previously exited entrepreneurs; when engaging with academics and early stage businesses, we believe being entrepreneurs gives us an advantage of traditional fund manager. • Large network in biotech industry and therefore earlier access to best science/companies. • In-house developed On-boarding and Portfolio Management technology. KEY SERVICES AND FUNDS • We have single S/EIS fund focused on Biotech Therapeutics and AI.

One of the first investments made by the Fund in 2018, Exonate Ltd (Nottingham University spinout), has recently signed a collaboration with the world’s largest pharma Johnson & Johnson to develop a new eye drop for the treatment of retinal vascular diseases including wet age-related macular degeneration (AMD) and diabetic macular oedema (DMO). Although the numbers of the deal are not disclosed, they do reflect the disruptive nature of the Exonate technology. It is a significant deal and demonstrates the fund hypothesis to invest into the best science in the UK and develop with a view to

GB Investment Yearbook · March 2020

SYNDICATE ROOM Phone: 01223 478558 Graham Schwikkard, CEO

Email: contactus@syndicateroom.com Website: www.syndicateroom.com

COMPANY OVERVIEW: SyndicateRoom was founded in 2013 as an online investment platform facilitating direct EIS investments into highly-vetted startups. By focusing on investor and industry needs, it has developed an enviable track record and has helped raise £250m in investment across multiple equity products to build a portfolio of over 190 companies. SyndicateRoom has raised over £12m for its venture capital funds to date. SyndicateRoom has now launched a new breed of datadriven EIS fund – Access EIS. Tom Britton, Executive Director & Co-founder

KEY PERSONNEL: Graham Schwikkard, CEO Graham studied at the University of Cambridge’s business school (the Cambridge Judge Business School), where he completed his MBA with distinction, and gained awards for his studies. In addition, Graham holds a degree in Genetics. Tom Britton, Executive Director & Co-founder Tom sits on the board UK Business Angel Association and the advisory board of City Ventures. His investment commentary has appeared in CityAM, Forbes, and The Twenty Minute VC. Francesca O’Brien, Head of Clients and Investments

Francesca O’Brien, Head of Clients and Investments

GB Investment Yearbook · March 2020

Fran has overseen more than 200 early-stage fundinground transactions – leading the sales, legal and dealanalysis teams. She is a frequent panel speaker and presenter, and her investment commentary has appeared in The Telegraph, The Times and CityAM.

Enhanced Profiles

USPs: New to the market this year, Access EIS tracks performance data of over 500 active startup investors. It then selects and co-invests with some of the bestperforming “super angels” with the aim of replicating their collective success. Access EIS aims to diversify your investment across at least 50 super-angel-backed startups to minimise risk and capture as many potential blockbusters as possible. You will be co-investing alongside super angels that have invested in many of the UK’s recent success stories. These include Horizon Discovery (£221m market cap), Magic Pony Technologies (sold to Twitter for a reported $150m) as well as household names like Secret Escapes, Bloom & Wild and Simba Sleep. As an EIS fund, eligible investors could benefit from generous tax relief on their investment into Access EIS. SyndicateRoom’s online dashboard aims to make light work of EIS paperwork with easily downloadable summaries that can simply be attached to your HMRC self assessment tax return. INVESTMENT STRATEGY: 5 rules for successful startup investing 1. There is no magic bullet to predict startup success. There are simply too many random variables involved to consistently pick future “blockbusters” based on information available at seed stage.

4. Blockbuster companies tend to have been funded by well-networked investors whose performance beats the market. Accessing these deals is vital to generate returns in a startup portfolio. 5. Take advantage of EIS tax relief. If you are an eligible investor, you could receive up to 61.5% of your investment back through tax relief. Based on these five principles, the optimum strategy for startup investing is to access the deals of investors who regularly beat the market, and to diversify as much as possible across their collective portfolios. Access EIS has identified and built relationships with some of the UK’s best-performing super angels – successful investors with a demonstrable track record of investing in blockbuster companies. It then invests with them across their startup portfolios. The fund is open to investors on SyndicateRoom.com * Based on research conducted by Syndicateroom and Beauhurst in the “Beating the Dragons” report, published in February 2019. 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.

2. Diversification is more powerful than you might think. Not only does it manage risk, it also maximises chances of investing in future blockbuster companies. 3. The startup market grows consistently in value at 28% per year.* The more you diversify, the closer your portfolio should get to this growth rate.

GB Investment Yearbook · March 2020

COMMITTED CAPITAL Steve Harris, CEO

Phone: 020 7529 1365 Email: glen.stewart@committedcapital.co.uk Website: www.committedcapital.co.uk

COMPANY OVERVIEW: Committed Capital is an investment management and corporate advisory business that was founded on the basis that growth stage businesses need management support as well as cash to realise their plans. Tim Steel, Chairman

We invest in UK based high growth technology companies with the primary objective of creating attractive returns for investors through the careful selection of potential companies, excellence in corporate finance skills and active support of companies. Committed Capital has been investing in EIS qualifying companies since 2001. In that time we have made multiple investment rounds across 33 companies, made 19 exits and 2 partial exits. Out of those exits we have realised just 1 partial failure, and have delivered an average 2.35x ROI (excluding tax reliefs). We believe our track record is down to the depth and breadth of our rigorous due diligence and also the emphasis we place on human capital noted below.

Simon Sharp, Investment Manager

KEY PERSONNEL: Steve Harris, CEO Steven has over 30 years experience in corporate finance and venture capital. Initially a corporate financier at HSBC, Steve became a Director of Corporate Finance at Société Générale and later, Head of M&A at PA Consulting. Steve holds an MBA from London Business School and a BA Hons in Modern History from UCL. Tim Steel, Chairman

Glen Stewart, Head of Intermediated Capital Raising

GB Investment Yearbook · March 2020

Tim has over 40 years of experience in venture capital. Tim was Vice Chairman of Cazenove until early 2010. Tim joined Cazenove in 1980 from Robert Fleming and became a partner in 1982. He was appointed Managing Director of Cazenove Fund Management in 2000, then became

Enhanced Profiles

Chairman in 2001, and was appointed to the main Board. Simon Sharp, Investment Manager Simon is a Chartered Accountant and member of the CISI and previously worked in corporate finance at Kingston Smith, where he advised SMEs across a multiple sectors including technology, healthcare and real estate. Simon has expertise in financial modelling, due diligence and business valuations. Simon holds a BSc degree in Mathematics from the University of Warwick. Glen Stewart, Head of Intermediated Capital Raising Glen is a tax adviser and previously worked at Coopers & Lybrand, PwC and Deloitte specialising in High Net Worth, Expatriate tax and cross border advice. Glen has 14 years’ experience raising capital for businesses in partnership with financial advisers and accountants utilising tax efficient investment wrappers such as EIS and VCT. INVESTMENT STRATEGY In analysing potential investee businesses, investments are selected based on the following criteria: • Dynamic Market – fast growing addressable market with low competitive intensity • Well-Positioned Company – strong management team, robust forecasts for rapid growth over the investment period and clear exit potential

of those exits we have realised just 1 partial failure and have delivered an average 2.35x ROI (excluding tax reliefs) against a target return of 2-3x ROI (excluding tax reliefs). • Depth, breadth and transparency of due diligence: We are entirely transparent with regards our due diligence and if advisers and/or their investors wish to see this, we are very happy to run though this with them. Our due diligence process comprises a review of the investee company’s management, the operating market, competitive position, market dynamics, opportunities and risks facing the business, interviews with customers and suppliers. We also build and review financial models, and undertake a valuation exercise using different methodologies including, comparable companies, discounted cash flow, comparable transactions and venture capital methodology. • Hands-on investing: Our investment methodology is focused on maximizing and accelerating growth in portfolio companies with the injection of human capital in conjunction with cash to assist leading entrepreneurs develop their business to its full potential.

• In-Demand Product – fully developed product or service, addressing a clear market need, with a sustainable technology-based competitive advantage

The importance of human capital cannot be underestimated. A company can have a world class product or service, have first mover advantage and distinct USP’s but without a cohesive management team and a clearly defined sales and marketing strategy, the company will not achieve its potential.

• Post Revenue – already generating significant sales (typically in excess of £1m annually)

KEY SERVICES AND FUNDS

• Investor Protections – a significant minority (often 20-40%) of the equity sought, a board seat and typical shareholder rights required. USPs • Track record: Since 2001 we have made multiple investment rounds across 33 EIS qualifying companies, made 19 exits and 2 partial exits. Out

The Committed Capital Growth EIS Fund is an evergreen fund focusing on UK based growth stage tech companies. Investors subscriptions are deployed in 8-12 investee companies within 12 months of investing with no more than 10-15% of their subscription being invested into any investee company.

GB Investment Yearbook · March 2020

HAMBRO PERKS Phone: 020 3327 4861 Email: EIS@HambroPerks.com Website: www.HambroPerks.com

COMPANY OVERVIEW:

Dominic Perks, Co-Founder, Hambro Perks

Hambro Perks is a venture firm that backs outstanding founders, supporting them as they build amazing companies. Our permanent capital structure, breadth of expertise and extensive network have made us a destination of choice for many of the best entrepreneurs as they choose investors to support them on their journey. Our partners have many decades of experience in founding, scaling and exiting businesses across multiple sectors, and we actively apply this expertise across our portfolio of investee companies. The Hambro Perks Co-Investment Fund offers individuals, and other entities, the chance to co-invest alongside Hambro Perks in the businesses in which we invest while benefitting from EIS reliefs. Every deal into which the Fund invests is EIS qualifying (though investors do not have to be able to benefit from EIS reliefs to invest in the Fund, for example trusts or companies are welcome). KEY PERSONNEL OR FUND MANAGER The Hambro Perks Co-Investment Fund co-invests alongside Hambro Perks, leveraging the experience, expertise and institutional knowledge of our partners and the entire team.

Nicholas Sharp, CIO of the Hambro Perks Co-Investment Fund

Rupert Hambro, Co-Founder and Chairman Has had a distinguished career leading UK and global financial institutions including Hambros Bank and Hambro Magan. A seasoned angel investor and founder over many years. Founding shareholder and Chairman of Sipsmith, recently sold to Beam Suntory. Dominic Perks, Co-Founder and CEO Is a serial entrepreneur having founded, scaled and invested in multiple technology-enabled businesses. Cofounder of Laundrapp, Tootle and Takumi.

GB Investment Yearbook Âˇ March 2020

Enhanced Profiles

Nicholas Sharp, CIO Co-Investment Fund.

the

Hambro

Perks

Qualified as a chartered accountant at Deloitte & Touche, before joining Odey Asset Management where he helped manage a number of long only and hedge funds. Subsequently worked at Merrill Lynch from where he joined Hambro Perks. Andrew Wyke, Partner Spent 20 years at Goldman Sachs rising to Managing Director and running a European Fixed Income desk prior to joining Hambro Perks. Andrew is an experienced private investor. George Davies, Partner Was previously an Associate Partner at McKinsey & Co., focused on working with principal investors across Europe. He has an MBA from Harvard Business School. USPS Hambro Perks is a permanent capital vehicle, funded by a group of very successful shareholders from different industries and geographies. The Hambro Perks CoInvestment Fund co-invests alongside Hambro Perks, and this means that our investors are fully aligned with Hambro Perks and its shareholders, who have genuine skin in the game. We invest off our own balance sheet and therefore think like owners. The patient nature of our investments means we are also aligned with the interests of our Founders, who recognize our potential to help them build large businesses over time, rather than being under the pressure of having to return a closed end fund. This alignment of interest, combined with the extraordinary value we can add through our network and experience, makes us a destination of choice for the very best entrepreneurs and founders.

Investors in our Fund will benefit from our proprietary dealflow, often in companies that Hambro Perks has been involved with since inception, and know that Hambro Perks has its own capital invested alongside their own. INVESTMENT STRATEGY The Hambro Perks Co-Investment Fund invests alongside Hambro Perks as it supports outstanding entrepreneurs and founders, helping them to build amazing companies. We aim to take early risk in businesses, often supplying the first external capital on a pre-revenue basis, investing where we can add significant value through applying and sharing our teamâ&#x20AC;&#x2122;s extensive 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, techenabled businesses. Our main areas of focus are education technology, digital health, insurance and financial technology, and digital media, though these are not exclusive and we do have investments in other sectors. KEY SERVICES AND FUNDS The Hambro Perks Co-Investment Fund is an evergreen discretionary managed portfolio service that co-invests alongside Hambro Perks in high growth, unlisted companies founded by outstanding entrepreneurs. Every investment made will be EIS eligible at the point of investment, and we aim to build a portfolio of 10-15 companies over the course of a year across a range of development stages and sectors.

GB Investment Yearbook Âˇ March 2020

WORTH CAPITAL Phone: 020 3858 0847 Email: hayley@worthcapital.uk Website: www.worthcapital.uk COMPANY OVERVIEW: In 2014, having been successfully investing in start-ups for over eight years, Paul & Matthew settled down for a couple of pints and scribbled down some reflections on their startup investing approach - what was behind the wins along with the reasons for picking a couple of duds. Examining this insight a few days later led to them deliberately designing a unique approach to seed investing that could ‘stack the odds’ for investors.

Matthew Cushen and Paul Soanes

They created Worth Capital and ‘competition funding’ an approach that creates a regular, sustainable and unique source of deal flow – meaning: • deals other fund managers do not necessarily see:

o beyond the London bubble - from across the UK

o beyond the old boys’ network - from founders with diverse backgrounds • fair valuations for both entrepreneur and investors – not valuations inflated by investors competing in the same pool of deals or by crowdfunding • regular deployment of capital. Having experimented with this ‘competition funding’ approach (with Metro newspaper, Facebook and Channel 5 as media partners) they settled on a monthly competition, The Start-Up Series, promoted by startups. co.uk which has now been running since October 2016. As well as unique deal flow, they: • believe when spotting entrepreneurial talent is ‘takes one to know one’ – they make use of their own entrepreneurial experience • sit as a Director on every business they invest in helping the start-up teams to accelerate growth and avoid risks • focus only on businesses they understand and can add value to • back their own judgement by investing personally in every new business into the Worth Capital portfolio.

GB Investment Yearbook · March 2020

Enhanced Profiles

Worth Capital now has a portfolio of interests in 22 businesses across different investment funds. KEY PEOPLE:

The most comfortable bedding essentials, ethically made in the world’s best mills, delivered direct at remarkably good value – by cutting out the retailer and the complexity of traditional bedding retail.

The founders of Worth Capital are experienced commercial entrepreneurs. They have each had 25-year careers covering both large corporates and growing their own businesses. They have deep expertise in marketing, brand building, innovation and retail. They cut their investing teeth 15 years ago and have since made dozens of investments, building successful personal portfolios, before setting up Worth Capital 4 years ago.

Smart motion detection and depth sensing hardware and software for occupational and physical therapists to improve the accuracy and efficiency of functional assessments.

Matthew Cushen

WHAT MAKES THEM DIFFERENT:

Retail: Senior positions in Kingfisher Plc & the John Lewis Partnership.

• The Start-Up Series – a monthly competition promoted by startups.co.uk - highly competitive, an exclusive source of deal flow, attracting a diversity of entrepreneurs from across the UK.

Innovation: Recently on the European Management Board of ?What If!, the global innovation consultancy. Still advising the leadership teams of huge businesses including IKEA, Waitrose & AB InBev. Angel investor: 15-year track record of angel investing, including a £376k return after 4 years on first £58k invested. Paul Soanes Marketing: Founded iD in 1994, grown into a top 10 UK experiential agency with clients include Nespresso, Unilever & Britvic. Brand: Founded Brandspace in 2004, exited to private equity after 4 years for £4.9 million. Angel investor: Since 2006 with significant exits including iChild (18 x return) and Yocuda (4 x return). INVESTMENT STRATEGY: Worth Capital hunts for: PRODUCT, SERVICE & CHANNEL INNOVATION, IN UNDERSERVED AND/OR GROWTH MARKETS, WITH THE POTENTIAL TO CREATE HABITUAL CONSUMPTION (B2C OR B2B) & A LOVED BRAND. Whilst both consumer and B2B propositions might be attractive, in either case the habitual consumption is important as this is what establishes brand equity – and therefore exit values beyond a benchmark multiple of EBITDA.

Subscription software for companies to measure and improve employee engagement and business culture, and performance on business objectives and goals.

• A rigorous and systematic distillation process over two months, developed from established innovation consulting techniques. • Businesses selected by real world, commercial entrepreneurs with deep brand, marketing, retail & innovation expertise. • Ongoing oversight from experienced battle-scarred investor directors, skilled in accelerating growth & reducing risk. REGULAR DEPLOYMENT OF CAPITAL: Worth Capital’s dealflow origination is directed through the Start-Up Series Fund - with a choice of SEIS and/or EIS investing, with ‘mini-portfolios’ invested broadly each quarter. Worth Capital assess the deal flow, negotiate a fair valuation and make a commercial recommendation to Amersham Investment Management, the Start-Up Series Fund manager. who challenge the rationale and choose to accept (or reject) recommendations, before conducting further independent due diligence, completing investments and administering the fund on behalf of investors. Amersham are authorised and regulated by the Financial Conduct Authority with firm reference number 507460.

Examples to illustrate this approach include:

GB Investment Yearbook · March 2020

Raimund Berens, Chief Executive Officer

IRON BOX CAPITAL Phone: + 44 (0) 207 628 7857 / + 44 (0) 752 861 6752 Email: raimund@ironboxcapital.com Website: www.ironboxcapital.com

COMPANY OVERVIEW: A portfolio of Inheritance Tax Services

Colin Brown, Chairman

Iron Box Capital is a specialist film and TV financing company. Established in 2015, Iron Box is run by actual film makers. We understand every aspect of the whole process and value chain of making films, including the financing, development, production, distribution and marketing of films. The experience of the whole team and advisory board is second to none. KEY PERSONNEL OR FUND MANAGER Raimund Berens, Chief Executive Officer Raimund Berens is CEO and founder of Iron Box Capital. With 13+ years experience in the film industry, Raimund specialises in the financing and legal structuring of feature films (both nationally and internationally). During his career he has gained strong experience across a variety of activities across the film value chain including development, packaging, production management, lighting, camera, and postproduction such as sound, editing & music.

Deborah Sheppard Marketing Advisor

GB Investment Yearbook Âˇ March 2020

Colin Brown , Chairman Colin Brown is a senior international media professional with experience and contacts developed over 30 years

Enhanced Profiles

in the TV, film and media sectors. He has worked at CEO and Chairman-level and held Board positions at the UK Film Council and National Film and Television School. He also is a voting member of BAFTA and served as British Film Commissioner from 2007-2011. Deborah Sheppard, Marketing Advisor Deborah Sheppard has over 20+ years experience as a marketing and distribution professional across independent and studio films. During her tenure at Paramount and before that UIP (United International Pictures) she marketed over 420 movies for Universal, MGM, Paramount, Marvel and Dreamworks, among others, covering every genre, from action and horror to family animation. UNIQUE SELLING POINTS: We are film makers. People that understand the whole process. With Colin Brown as Chairman, our network of contacts across the global film industry are second to none. We have created a range of different ways for people to invest. Whether via Amersham’s SEIS / EIS Growth Fund, alternative SEIS / EIS investee companies or individual project companies. We want our investors and their advisers to enjoy the whole film experience and have fun. This can include watching the filming and meeting the ‘stars’, going to film premieres, or even having a role as an extra!

why we focus on genres of film that have a strong track record in delivering profits, and also in working with teams that have a global reputation for excellence. It is worth making the point that smaller budget films can often make greater profits than major films, because they are more targeted for specific audiences. In today’s world we also target the inline market for films, across Netflix, Amazon Prime, In flight films, video on demand and so on. As more opportunities to view grows, so does the demand for films. KEY SERVICES AND FUNDS There are several options for investors. We are part of Amersham’s general SEIS & EIS fund called The Amersham Growth Fund, where clients can invest generally across a variety of industries or specifically in the respective Iron Box Film & TV channel. Where clients invest via the channel the investment will be allocated across several Film & TV invest companies, which in turn will spread across the portfolio of films. Investments are SEIS and EIS qualifying. We have also set up investee companies to look after every stage of the production process to ensure quality and delivery. This allows us to offer a superior product. Since 2019 we have been working closely with investors, filmmakers and production companies and are launching individual project opportunities (non-tax advantaged) into the market.

INVESTMENT STRATEGY The entire focus is on creating audience driven films. It is this that drives the commercial success of films. That is

GB Investment Yearbook · March 2020

STELLAR ASSET MANAGEMENT Phone: 020 3907 6985 Email: enquiries@stellar-am.com Website: www.stellar-am.com

COMPANY OVERVIEW: A portfolio of Inheritance Tax Services Stellar Asset Management is an experienced manager of investments which seek to provide 100% relief from Inheritance Tax after two years. Their portfolio services offer investors exceptional diversification and choice across asset class areas that provide a high level of security. Matthew Steiner, Corporate Director

Both their chairman and CEO have been at the forefront of tax-efficient investment in the UK since the early 1990s, when they first established Close Brothers Investment Limited. They quickly became market leaders in the creation, promotion and management of tax planning products for private investors. In 2007, they formed Stellar Asset Management, where they have continued to develop innovative and robust services that are underpinned by longstanding government legislation with emphasis on the mitigation of inheritance tax. KEY PERSONNEL OR FUND MANAGER Jonathan Gain Chief Investment Officer and CEO Jonathan has been involved in financial services since 1993 when he graduated from Bournemouth University with a BA (Hons) in Accountancy. He joined the then newly formed Close Brothers Investment Limited in 1993 and was appointed Finance Director just five years later. Jonathan established Stellar Asset Management in 2007 and drawing on his wide-ranging experience has created a business which is focused on estate planning and which offers investors maximum choice and diversification across a wide number of sectors.

GB Investment Yearbook Âˇ March 2020

Enhanced Profiles

Jonathan is chief executive and the majority shareholder. Craig Reader Chairman Craig’s career started at Thornton and Baker, which later became Grant Thornton where he trained as a Chartered accountant. He joined Chancery PLC in 1985 and quickly became a leading figure in the development and promotion of Business Expansion Schemes. In 1991 he set up Close Brothers Investment Limited (part of Close Brothers Group Plc) to specialise in tax planning products and grew the division to £3.5bn FUM over 15 years, with innovative products in such as EZTs, VCT, Film Schemes, EIS and sectors of the property market including the UK’s first property ISA. In his role as Chairman, Craig draws on his extensive investment and tax experience to guide the direction of the company and oversee the Investment Committee’s process. Matthew Steiner

of Stellar’s services is designed to provide investors with full control and access to their capital throughout their lifetime and achieve relief from Inheritance Tax after two years. Their portfolios are designed to provide Inheritance tax freedom for individuals and business owners and to create a legacy for the next generation. Key features • Wide range of diversified services for adviser to choose from • Impressive track record of delivering real returns • Transparent robust structures • Choice of growth or (distributed) income strategies • Uncapped upside • Low fees • Our award-winning service, Stellar ICENI supports financial advisers in delivering a more holistic business offering (see below)

Corporate Director

BUSINESS ACTIVITIES:

Matthew has worked in the financial services industry since he graduated from Kingston University in 1997.

In addition to AiM, Stellar offers investors access to a wide range of business relief qualifying, asset backed investments.

Immediately after university, he trained as a financial adviser and spent two years advising private investors before joining Close Brothers Investment Limited in January 2000, where he became Business Development Manager. His experience from this role includes a wide knowledge of property investment funds and tax efficient products.

They continually source and develop new sectors to ensure that investors benefit from exceptional diversification in business activities that provide investors with a high level of security. Examples include:

After a short sabbatical in Nepal, he undertook consultancy roles within boutique tax and property investment companies before joining Stellar as a director and shareholder in 2012. Matthew has been instrumental in the development of Stellar’s estate planning services and is the driving force behind Stellar ICENI.

• Hotel Management • Commercial Forestry • Care Home Management • Residential and Commercial Property Development • Golf Course Management

UNIQUE SELLING POINTS: Stellar is a specialist manager focused on Inheritance Tax and estate planning services that use Business Relief. Each

GB Investment Yearbook · March 2020

• Commercial Farming • Renewable Energy (Solar & Wind) • Bridging Finance STELLAR ICENI Stellar ICENI is an award-winning service for financial advisers that combines specialist investment management with the key professional services to maximise estate planning opportunities. Over the next 30 years it is estimated that £5.5 trillion will pass between the generations in the UK, representing the greatest transfer of wealth in history. It presents an undoubted and unrivalled opportunity for advisers, not only to engage with their clients on the subject of estate planning and tax-efficiency, but to unlock more business and advise the next generation with their newly received inheritance. Stellar ICENI combines specialist investment management with the core advice disciplines necessary for effective inter-generational wealth transfer. Stellar is running a series of free seminars where you can meet experts in the following disciplines: • Legal and estate planning • Investment management • Tax advisory • Estate administration Stellar ICENI brings together expertise that advisers can rely upon, providing the support you need to offer a market leading service to your clients and unlock the full potential of their estate planning requirements. Register for events at www.stellar-am.com/events

GB Investment Yearbook · March 2020

EIS VCT Investor Forum

THE 10TH VCT & EIS INVESTOR FORUM “GBI Editor Andrew Sullivan reports on a very enjoyable event” Organised by AngelNews in association with Peer2Peer Finance News, the Forum (held during the run-up to Christmas 2019) was an engaging blend of specialist speakers, industry debates, educational sessions and hands-on product sampling. Keynote speakers included entrepreneur and former Dragon, Nick Jenkins, former Environment Minister and Independent candidate for Mayor of London, Rory Stewart and the one and only Dear Old Thing, Henry Blofeld. Guest speakers were Dan Rodwell, founding investor and Managing Partner at GrowthInvest, Henry Whorwood, who heads Beauhurst’s research and consultancy department, and John Auckland, founder of TribeFirst. 5 special debates were held covering a range of key topics, including: • Hot deal opportunities for 2020 • Debunking the myths of P2P lending • Underpinning the industry: how regulation, rules and resources are improving investor outcomes • Creating a diversified portfolio – Q&A with the experts • The new opportunities in P2P property investment. The Adviser School provided a smaller breakout room dedicated to educating IFAs and wealth managers; 6 separate sessions covered specific topics including :

• The rising demand for impact investment opportunities • 7 killer questions for any advisers considering EIS & SEIS funds • Social impact investment – how to sell it to your clients • What to expect from your EIS portfolio. There was a dedicated P2P Lending Zone with 6 sector specialist companies offering everything advisers need to know about peer-to-peer lending, while The Discovery Shop allowed delegates to snaffle sample after sample of exciting, innovative food and drink brands and products. Alongside all this was a roomful of intriguing exhibitors, from a low-cost, long-haul airline serving South Asia’s second cities to a charity facilitating income-generating home enterprises in some of the world’s poorest areas. AngelNews took the opportunity to announce the winner of the inaugural Unsung Hero of the VCT & EIS Industry Award; this was presented to Ewoud Karelse, Head of Tax Advantaged Investments at Tilney, and proved to be a hugely popular choice. Maybe the friendliest event of its type on the calendar, the 10th VCT & EIS Investor Forum at the Leonardo Royal Hotel, Tower Bridge, brought together the movers, the shakers, the hopefuls and the mentors and shuffled them together for a varied and satisfying day. GBI

• Understanding VCTs and which clients they might suit • How can investors properly assess EIS find managers?

GB Investment Yearbook · March 2020

M AGAZINE

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

GB Investment Yearbook Â· March 2020

Open Offers

SEIS Open

Nov 2017

Evergreen

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

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

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

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

EIS Open

January 2013

Evergreen

Deepbridge - Technology Growth EIS

Amount to be Raised: Uncapped

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

Minimum Investment: £10,000

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

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

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

SEIS Open

January 2016

Evergreen

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

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

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

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

GB Investment Yearbook · March 2020

EIS

SEIS

Open

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

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 Yearbook · March 2020

Open Offers

EIS Open

01.10.2018

Evergreen

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

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

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

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

EIS Open

March 2017

Evergreen

Deepbridge Life Sciences EIS

Maximum Raise: Uncapped

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

Minimum investment: £10,000

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

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

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

EIS Open

Evergreen

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

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

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

GB Investment Yearbook · March 2020

EIS

SEIS

Open

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

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

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 Yearbook · March 2020

Open Offers

BR Open

June 2005

Evergreen

Amount to be Raised: Unlimited

Minimum Investment: £25,000

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

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

octopusinvestments.com

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

EIS Open

Evergreen,

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.

GB Investment Yearbook · March 2020

EIS Open

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

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 Yearbook · March 2020

Open Offers

IHT Open

Evergreen

Amount to be Raised: Evergreen Minimum Investment:

£100,000

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

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

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

IHT Open

Evergreen

Amount to be Raised: Evergreen Minimum Investment:

£100,000

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

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

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

EIS Open

Evergreen

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

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

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

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

GB Investment Yearbook · March 2020

EIS Open

Evergreen

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

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

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

EIS Open

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 Yearbook · March 2020

Open Offers

EIS Open

June 2019

June 2020

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

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

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

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

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

GB Investment Yearbook · March 2020

EIS

SEIS

Open

May 2019

Evergreen – Bi-annual tranches

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

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

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

EIS

SEIS

Open

Evergreen

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

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

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

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

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

EIS/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 Yearbook · March 2020

Open Offers

EIS Open

15th Dec 2014

Evergreen

Target Raise: Evergreen Minimum investment: £15,000

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

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

• Deployment • Target return

- Funds typically deployed within 12 months.

• Minimum investment

- 2-3x ROI*

- £15,000

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

EIS Open

Now

Evergreen

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

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

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

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

GB Investment Yearbook · March 2020

EIS Open

31st January 2019

Evergreen

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

or £5,000 under the future investors scheme

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

VCT Open

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

EIS Open

SEIS

Evergreen

Open

Evergreen

Amount to be Raised:

Open Ended

Minimum Investment: £10,000

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

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

• 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 Yearbook · March 2020

Open Offers

EIS Open

Evergreen

Amount to be Raised:

£20 million

Minimum Investment:

£20,000 (£15k if both spouses)

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

EIS Open

Evergreen

Amount to be Raised:

c. £30m

Minimum Investment:

£25,000

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

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

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

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

GB Investment Yearbook · March 2020

M AGAZINE

DIRECTORY 78

GB Investment Yearbook Â· March 2020

GBI Yearbook | 2020

Articles inside

FOCUS ON DOWNING VENTURES EIS

THE HIDDEN RISKS OF BR PRODUCTS

GROWING THE TAX-EFFICIENT INVESTMENT MARKET