Supply of capital for high tech investing expected to exceed £3bn this year
The fundraising season is in full swing. Every day at AngelNews, we received more stories about successful fundraisings, which is excellent news given the current political uncertainty. Entrepreneurs and the investors who back them will overcome all obstacles (real or perceived) to win!
The word on the street is that everyone wants to get into the venture capital game – even institutional investors – now that they have seen successes like DeepMind, Funding Circle and Deliveroo. The UK and especially the hotspot for enterprise that is London, is now a proven Unicorn creator (companies valued in excess of US$1bn and investors who previously saw growth in the quoted equity and bond markets now know that the best chances of superior returns in equity are likely to be found pre-IPO.
The good news is that private investors have a real opportunity to play alongside with larger investors through the VCT and EIS schemes. These offer exposure to venture capital opportunities, but with the financial risk mitigated by HM Government through generous income, Capital Gains and, in the case of EIS, Inheritance Tax breaks. Investors are a canny bunch and are showing that they have learnt that this sort of investment requires diversification and expert management if you are going to win, hence the high levels of interest in VCTs and EIS fund managers.
It makes sense to seek out the fund managers with the investment strategies that match the specific objectives of each investor. The good news is that the variety of managers in the market means that there is probably a strategy suitable for everyone. We are helping private investors to do the research they need by hosting the 9th VCT & EIS Investor Forum on 30th November at The Grange Tower Bridge Hotel, 45 Prescot Street, E1 8GP. At the Forum there will be fund managers who are expert in everything from deep med tech to those offering more balanced investment strategies across a wider range of sectors.
Last year around £3bn was raised under these schemes (including the little sister of EIS, the Seed Enterprise investment Scheme). And this year we are anticipating that this amount will be reached again. That’s a lot of capital looking for a high-tech home, so entrepreneurs should come hither and ask. VCT and EIS fund managers have been making great strides to be more entrepreneur friendly – check out their websites to find out how to get in touch, but remember that they still tend to like to meet via a warm introduction – so it might be worth seeing where you have mutual contacts on LinkedIn and reach out that way in the first instance.
The EXPO at this year’s VCT & EIS Investor Forum might also be a great way to meet both private investors and fund managers. There will be opportunities to demo and showcase your tech business in our Lab, our Playroom and our Shop. To find out more see https://www.thevctandeisinvestorforum.com/expo-2018/ for more information.