Government announces major catalyst for angel investing in innovating entrepreneurs

29 November 2011

Business Angel Investing received a strong boost from Government today, through both a new major 50% tax relief for seed stage investing and the launch of a new £50m angel co-investment fund.

Notably in his Autumn statement today, Chancellor George Osborne has announced that investors wishing to back very early stage seed stage businesses can gain up to 50% tax relief.  Under this new Seed Enterprise Investment Scheme (SEIS), commencing from April 2012, which will be similar in design to the current Enterprise Investment Scheme (EIS), the focus will be on supporting new early stage companies with 25 or fewer employees and assets of up to £200,000 which are carrying on or preparing to carry on a new business.   For investors the maximum an annual investment limit for will be £100,000 and the maximum that any early stage business can receive cumulatively under this scheme will be £150,000.

Today also marks the launch of the new £50M Business Angel Co Investment Fund, to be named the Angel CoFund and will be investing alongside Business Angel syndicates from across England.  The fund shortly opening for business is administered with the support of Capital for Enterprise Limited (CfEL) and set up with a grant from the Regional Growth Fund.

The fund is able to make initial equity investments of between £100K and £1M in to SMEs alongside syndicates of business angels, subject to certain geographical restrictions and an upper limit of 49% of any investment round. Investment decisions will be made by the independent Investment Committee of the fund based on the detailed proposals put forward by business angel syndicates.

Anthony Clarke, Chair of BBAA stated: “As the trade body for angel and early stage investment in the UK, we are extremely pleased that the Government has recognised the importance of backing angel investors to bring their financial capacity and business experience to support small business growth and jobs. This enhanced 50% tax break will stimulate high net worth individuals to see the benefits of using their cash for investments in very early seed stage businesses where, even with the current EIS scheme, these deals may have seemed too risky. 

BBAA has been working with Capital for Enterprise for some time to support this new co-investment fund and we are delighted that this has now been launched to bring angels together in syndicates to pool their resources and expertise. This will significantly strengthen the angel market, offering the opportunity to leverage up to £1m additional finance in each deal to support high growth potential businesses”.

For further information and enquiries: 

 

For further enquiries, contact jenny@bbaa.org.uk, 0207 321 5675

London Business Angels
Anthony Clarke, Managing Director
Tel: +44 (0)20 7321 5672
E-mail: enquiries@lbangels.co.uk
Web: www.lbangels.co.uk

About London Business Angels

LBA is one of the most experienced private angel networks in the UK. Since the early 1980s the network has been connecting innovating fast growth small and medium sized enterprises with investment through our network of business angel investors. LBA, part of Angel Capital Group, is professionally managed by a highly experienced management team, leveraging over 15 years’ experience in the early stage investment marketplace as established leaders in the development of new angel-led early stage investment initiatives, and nearly 30 years’ investing experience through the LBA network. LBA is a founding member of the British Business Angels Association, the industry's best practice trade association, and is also a member of EBAN, the European Business Angels Network.

About the LBA EIS/SEIS Approved RoundTable Syndicate Funds

The LBA EIS Approved RoundTable Syndicate Fund is the culmination of 30 years’ experience of pioneering innovation in the UK Angel investment market. This FSA regulated HMRC Approved EIS Fund offers LBA Investors an innovative way to acquire a portfolio of investments, while taking advantage of the personal tax relief offered by the Enterprise Investment Scheme. The First £300k LBA EIS RoundTable Fund 2010 was fully invested in January 2011, making four investments in leading edge technologies during the previous year, spread across a range of sectors: Eykona (medtech); Syrinix (cleantech); ipadio (mobile); The Electrospinning Company (nanotech).

Following the successful 2010 Fund, the LBA EIS Approved RoundTable Syndicate Fund 2011-12 closed for subscriptions on 13 May 2011, being 40% larger at £420k. The fund invested in 5 leading edge technologies spread across a range of sectors: Camstent (medtech), Momentum Bioscience (medtech), Phase Vision (high value manufacturing), Michelson Diagnostics (medtech), Isotera (cleantech)

The LBA EIS Roundtable Syndicate Fund 2012, closed for subsciprtions on 5th April 2012 at £455k. The fund invested in 6 early stage companies.

The LBA EIS Roundtable Syndicate Fund 2013, closed for subscriptions on 5th April 2013 at £290k. The fund invested in 6 early stage companies.

The LBA EIS Roundtable Synducate Fund 2014 closed for subscriptions at £695k on 4th April 2014. The fund will seek to co-invest alongside London Business Angels in the next 12 months

The LBA SEIS Roundtable Syndicate Fund 2012, closed for subscriptions on 19th October 2012 and will seek to co-invest across 6-7 SEIS eligible deals alongside LBA investors