Stop Press
30 September 2011
The Treasury has confirmed that Angel investors in small businesses will receive a £100m tax break to back Britain’s growing companies, after Brussels cleared the Government to expand the Enterprise Investment Scheme (EIS) by increasing the rate of tax relief available from 20pc to 30pc and doubling the annual investor limit to £1m.
The Treasury hopes the tax breaks will encourage greater investment in the UK’s fast-growing, smaller company sector. Since the EIS was established in the 1990s it has encouraged, along with venture capital trusts, more than £11bn of investment.
The UK is the best place in Europe to finance and grow a new business. A vital part of this is ensuring that smaller businesses have access to a wide range of sources of finance. Business Angel capital is one of the few that has continued to invest in the SME sector since the Lehman collapse. The EIS is possibly the best British tax legislation ever enacted as it actually achieves what it set out to do- encourage investment. The UK has led the world in offering tax incentives to encourage much needed funding for small businesses and is only now beginning to be imitated by other countries (France now offers some relief against its wealth tax and the US is considering a similar initiative).
The EIS has been around for over 20 years and despite offering good tax breaks became less relevant as CGT rates fell with taper relief. It came back into its own when CGT rates increased to 28% and now the increase in initial relief from 20% to 30% makes this a very attractive way to invest.
A top rate taxpayer investing £10,000 will get initial relief of £3,000 back immediately, The remaining £7,000 is free of capital gains tax (and Inheritance Tax!) if held throughout the qualifying period. If the investment goes wrong the investor can claim the net loss of £7,000 against his income tax at the highest rate (50%) so that the worst case downside is £3,500 of the investment of £10,000.
Restrictions by type of trade and some other complex requirements have made the EIS complicated. We are aware that HMRC is working to simplify the scheme rules and preliminary clearance for companies seeking new investment. We hope the process will be easier, quicker and more transparent. We encourage these efforts.
Approximately 80% of the 100 or so companies that Beer & Partners act for each year qualify for EIS relief. Whilst our investors would be unlikely to invest for the tax breaks alone, they're certainly an encouragement and allow them to take comfort from the fact that when they invest in the higher risk, early stage companies, their downside is tax deductible or that their returns will not be diminished by Capital Gains Tax. We typically raise over £10m each year for small businesses and the initial relief on this could amount to £2.5m to £3m, giving investors further opportunities to invest.
Mike Weaver, CEO
Beer & Partners Limited
|
|
|
CURRENT OPPORTUNITIES
|
|
Events Diary
" Enter the 'Dragons' Den' "
Angel Investor Meeting with PKF
Nottingham
25 October 2011
4pm - 6pm
London Investment Fair
London
8 November 2011
10am - 4pm
'Securing Finance' Seminar
London
30 November 2011
Venue & Times TBC
Please keep an eye on our Events Page for further information...
News
Next Investment Fair on
Tuesday 8th November
The third and final Investment Fair of 2011 is taking place on the 8th November.
For over 10 years, Beer & Partners have been running the Investment Fair, attracting up to 200 of our private investors and institutions wishing to invest between £50,000 and £2m. The doors open to our investors at 10am and close at 4pm.
If you know of anyone who might be interested in coming along to the Fair as an Exhibitor, please Click Here for further information.
If you would like to come along as an Investor, further details can be found on our website; please Click Here.
Beer's Fair Bags £100,000 for V-Commerce Provider
Following our Investment Fair, we assisted this video-commerce provider in raising £100,000. Our investor brought a wealth of sector knowledge to the company and joined the board as an advisor, having seen the value of the company’s business model.
Through its market leading, proprietary video platform and player, the company is able to correctly match content to related products and deliver an audience, connecting existing e-commerce revenue streams to the TV and Video entertainment industries.
Having built the company through revenues over the last four years, the funding allows the company to progress through its aggressive growth plans.
Associate Spotlight
Tony Maynard
|
PA qualified marketeer and former Managing Director/Chief Executive of SME businesses in manufacturing, retail/wholesale and construction sectors, requiring major restructuring and new strategic planning.
xxHas specialised in business recovery and change management work, including business planning and funding. Famous brands include Habitat, Mothercare, Parker Knoll, Bisto and McDougalls. Will help client companies to enhance their business and marketing plans and offer advice on the cultural changes necessary to attract investor interest and ensure successful plan implementation.
Tony joined Beer & Partners in the Spring of 2004, and has successfully raised money for our clients on countless occasions.
Click Here to Contact Tony
|
|
|
|
THE FIRST MULTI-SERVICE COMPARISON WEBSITE IN ALL LATIN-AMERICA
|
| |
Sector:
Funds Sought:
Location:
Stage:
Ref. Number:
|
Internet
£680,000
Central South
Expansion
51490
|
|
| |
|
Our client has launched the first multi-service comparison website in Latin America covering personal finance, car insurance, travel and discounts.
In 2010, the company received £300,000 from two Beer & Partners investors and is already generating profits. Funding for rapid growth is now required.
Significant first mover advantage has been established in a fast-growing market and the firm has also developed market-leading state-of-the-art software/look-&-feel and strong partnerships with regional insurance brokers and top banks. The unique umbrella brand enables the creation of a large multi-service website where none currently exists.
Estimated market size of the targeted sectors: cUS$400 billion. Online retail market: 173 million active users (+883% in eight years). Internet penetration: c30% (UK = 70%).
The core management team comprises the current founder/CEO; CTO (10 years in software development) and COO (all extensively experienced in start-ups through multinationals and supported by a small Argentina-based team of software developers). The NEDs have pedigree credentials in marketing/online market research in Latin America and one has senior experience with Google and eBay (EMEA).
Projected 3-year T/O growth = £0.3 million to £25 million (5-year target = £74m), generating 41% net margin. EIS relief available, Exit via trade sale/IPO likely in 5 years.
Contact: Tony Maynard - 01635 200 354 - maynard@beerandpartners.com
|
|
|
|
|
PATENTED MEDICAL DEVICE FOR GLOBAL DIABETIC MARKET
|
| |
Sector:
Funds Sought:
Location:
Stage:
Ref. Number:
|
Life Sciences
£500,000
East Midlands
Seed
51480
|
|
  |
|
Our clients have patented and tested a protype device which improves the healing rates and times for diabetic foot ulcers, leading to major savings in healthcare costs, reduced need for amputations and improvements to patient quality of life.
A current addressable market of 1.3m units per annum has been identified which is forecast to grow in line with increased prevalence of diabetes worldwide.
The core management team have high level and lengthy experience in global health sector corporations, as well as medical sector start up experience as entrepreneurs and investors.
Product launch in the prime target markets of US, UK and Germany is planned for Q4 2012. Company projections show turnover in excess of £20m and EBITDA circa £9m in 2015.
£500,000 first round funding is sought for patient safety and clinical studies that will enable CE marking and FDA 510k approval for the US market. £300,000 has been offered from small institutional investors based on a pre-money valuation of £600,000. A minimum of £200,000 is therefore required from our investors.
Expected exit is by trade sale at a multiple of 4-6 EBITDA, a valuation of £36m - £54m on projections. Some potential acquirers have been identified.
Contact: Matthew Lawrence - 07725 589 136 - lawrence@beerandpartners.com
|
|
|
|
|
TURBINES FOR COLLECTING ENERGY FROM RIVERS & TIDES
|
| |
Sector:
Funds Sought:
Location:
Stage:
Ref. Number:
|
Environment & Energy
£1,000,000
East Anglia
Early Stage
51454
|
|
|
Our Client is developing patented water turbine technology which will deliver low cost of energy, comparable with that generated from fossil fuels.
They are developing products for two markets:
- 5kW run-of-river turbine for remote communities and;
- 1.2MW turbine for offshore tidal stream farms.
Their turbine is designed to minimise CAPEX and OPEX: It is very robust, quick to install and recover. It is attached to flexible moorings, which reduces cost and impact forces from debris in the water. The ducted design and forward reaching stator blades reduce turbulence in the flow, minimises the risk of damage to aquatic life and to the turbine. The turbine is designed for low cost mass production and ease of assembly. It utilises a high voltage DC power transmission system which offers greater efficiency and reduces opportunities for failure.
Having invested over £750,000, our client now seeks £1.1m for an 18% stake. The funds will enable further technology development, setting up a Brazilian JV and a collaboration with the University of Rio-de-Janeiro to leverage £20-30m grants from 2 major Brazilian energy companies. Revenues from river turbines are expected to start in 2013, tidal turbines in 2014. By 2020, they envisage revenues of £100m a year.
Contact: Robert Whitaker - 01725 552 757 - whitaker@beerandpartners.com
|
|
|
|
|
PRIVATE MEMBERS' CLUB, HIGH-PROFILE PROMOTER
|
| |
Sector:
Funds Sought:
Location:
Stage:
Ref. Number:
|
Hospitality
£1,500,000
London
Startup
51380
|
|
| |
|
A high-profile female fund manager, who has worked in the City for 28 years, is launching a new private members’ club in southwest London. Her partner is the chef-proprietor of a highly-acclaimed restaurant in Clapham.
She has already secured £550,000 from friends and family and now seeks a further £1,500,000 to fully fund the project. A sizeable site has been obtained and the strip-out is complete. Planning permission is currently being sought; building work should begin in January with the opening forecast for June/July.
On the ground floor of the building, there will be a café, a restaurant and a private room with total covers of 155. This area will be accessible to both members and non-members. The first floor will be accessible only to members. The site also has a large garden, which will make it a particularly appealing destination on hot summer days. Parking in adjacent roads is plentiful and free – and valet parking will be available. Membership fees should significantly boost the profitability, with a forecast of 1,000 members by the end of year 3.
The plan is to create other sites in due course. The company has preliminary EIS approval.
Contact: Angus Milne - 07824 665 604 - milne@beerandpartners.com
|
|
| |
|
