Enterprise Investment Schemes  

Growthdeck offers EIS in e-ticketing hub

Growthdeck offers EIS in e-ticketing hub

Growthdeck has announced a £550,000 enterprise investment scheme-compliant opportunity in a business that provides online tickets for Chelsea FC, Twickenham Stadium and Liverpool's Cavern Club.

Steve Talbot, investment director at Growthdeck, said making an investment in online ticketing platform WebTicketManager is attractive because of the business’s organic growth since being founded in 2012.

WebTicketManager plans to use investors’ cash to expand its sales and marketing operation and grow its customer base.

Mr Talbot said customer acquisition to date has been achieved on a "very limited" budget with the ticketing business achieving revenues of £400,000 in 2017, which was sufficient to break even.

WebTicketManager is projecting that revenues will grow by 11 times that, by 2021.

Mr Talbot said the company is seeking to achieve an internal rate of return (IRR) of 68 per cent for investors, including EIS tax relief.

An EIS scheme allows private investors to reduce their income, capital gains and inheritance tax liabilities by investing in growth businesses.

Under the scheme, up to £1m a year can be invested in qualifying companies, with 30 per cent of the cost of each investment eligible to be reclaimed against an individual's income tax bill.

No capital gains tax is payable after holding the investment for three years.

Mr Talbot said that the e-Ticketing market is entering a new phase of growth, with more and more visitors seeking local experiences and predicted WebTicketManager is well-placed to take advantage.

He said: "No platform has yet managed to combine a proven tech offering, a multi-channel sales approach and a realistic pricing structure for local attractions. WebTicketManager is the only player in the market to offer that.

"Given the solid track record of the business, the expertise and experience of the management team, and the growth opportunities the business is poised to benefit from, this investment makes a lot of sense for Growthdeck investors."

David Stone, a partner at London-based Mansion House Capital, said that EIS investments offer a tax benefit and the potential for loss relief, but warned the changes to the treatment of these investments from March 2018 means investors must now show that their capital is genuinely "at risk" to qualify for the tax incentives.

He said: "The old phrase is 'don't let the tax tail wag the investment dog', but in the past it did. We are explaining very clearly to clients that 'you could lose all of your money'."

Mr Stone said that his business outsources the selection of companies in an EIS to an external provider, but said that the investment opportunity outlined by Growthdeck sounded like it would qualify.

He said: "It sounds like something that would be appropriate, in that it is a small company and there is significant risk and it is a true trade."