Enterprise Investment Schemes  

Technology SEIS fund launches

Technology SEIS fund launches

Symvan has launched its third Seed Enterprise Investment Scheme (SEIS) Technology fund.

Kealan Doyle, co-founder of Symvan Capital, said regulatory pressure was moving SEIS investors away from traditional low risk, asset-backed businesses, creating a "sweet spot" for the technology sector.

Mr Doyle said the fund will invest in early stage technology companies.

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He said: "Given what we know about what investment returns associated with successful high-growth firms and sectors, this potentially offers very attractive investment returns for UK investors.  

"The risks in investing in early-stage venture capital is high but the UK government has provided tax-efficient wrappers that dramatically alters the risk/return trade-off for investors in high growth companies, making such investments an integral part of most investment portfolios."

Jason Hollands, managing director for business development at Tilney, said the tax breaks for SEIS were undoubtedly significant and included a 50 per cent income tax relief for amounts up to £100,000 a year.

But he said these products came with tax breaks for a reason as SEIS invest in tiny, start-up companies where the failure rates are high.

Mr Hollands said: "These schemes are aimed squarely at wealthy, sophisticated investors and cannot be marketed to retail investors." 

Individual companies raising money under Seed EIS must have assets of less than £200,000, fewer than 25 employees, be less than two-years-old and can only raise £150,000 in total under the scheme.

Mr Holland said: "This is very niche, early phase investing and only around £180m is raised each year via Seed EIS, which will likely include a great many friends and family fund raisings to get a small business off the ground that are not via schemes marketed through financial advisers."