Released On 9th Jul 2024

We’re taking a flight into the exciting world of angel investing in the UK. Strap in your seatbelts, because we’re about to explore the thrilling landscape of start-up investments, buoyed by the wings of the UK Government’s Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS) allowances.

The angel’s playground: Exploring SEIS and EIS

Imagine yourself as an angel, not the halo-topped variety, but the kind that spreads its wings over promising start-ups, providing the financial boost they need to soar to success.

In the UK, this dream becomes a tangible reality through SEIS and EIS, two governmental initiatives designed to incentivize investment in early-stage companies.

SEIS offers a generous tax break for investors pouring capital into fledgling ventures. Picture this: a 50 per cent income tax relief on investments up to £100,000 per tax year, alongside capital gains tax (CGT) exemption on profits and loss relief if the investment fails.

It’s like the Government is saying, “Go ahead, take a leap of faith in these startups, and we’ll soften the landing for you.”

Meanwhile, EIS steps in for slightly more mature start-ups, extending its protective wings to shield investors from risk. With EIS, investors can enjoy a 30 per cent income tax relief on investments up to £1 million per tax year, along with CGT deferral and exemption on profits. It’s a playground where risks are tempered with enticing rewards.

Navigating the skies: Understanding the risk profile

Now, let’s address the elephant in the room – risk. Angel investing isn’t for the fainthearted. It’s a rollercoaster ride through the peaks of success and the valleys of failure. However, with risk comes opportunity, and therein lies the allure of angel investing.

Investing in start-ups is akin to placing your bets on the next unicorn in the making.

Some ventures will flourish, transforming your initial investment into a golden egg. Others may falter, teaching valuable lessons along the way. But isn’t that the beauty of entrepreneurship? Embracing uncertainty, learning from setbacks, and celebrating victories.

With SEIS and EIS in your arsenal, the risk is mitigated to some extent. The Government’s support acts as a safety net, cushioning the fall if things don’t go as planned. It’s a calculated risk, where the potential for high returns outweighs the fear of failure.

Finding your flight path: Angel investing in your portfolio

Now, you might be wondering, “How does angel investing fit into my investment portfolio?” It’s a valid question, considering the diverse landscape of investment options available. Think of angel investing as the spice that adds flavour to your portfolio.

While traditional investments like stocks and bonds form the foundation of your portfolio, angel investing adds that element of excitement and potential for exponential growth. It’s the wildcard that could turn a modest portfolio into a powerhouse of wealth.

Moreover, angel investing offers something beyond financial returns – the satisfaction of nurturing innovation, supporting budding entrepreneurs, and being part of something bigger than oneself. It’s about fostering a culture of innovation and entrepreneurship, driving positive change in society.

Unleashing the wings of angel investing: Navigating SEIS and EIS in the UK

Joining an angel club can significantly enhance your angel investing journey in several ways. Firstly, it provides access to a diverse network of like-minded investors, entrepreneurs, and industry experts, fostering collaboration and knowledge sharing.

This network can offer valuable insights, deal flow opportunities, and due diligence support, empowering members to make more informed investment decisions.

Additionally, angel clubs often offer curated deal sourcing, screening, and syndication services, streamlining the investment process and reducing the burden of individual research. Moreover, being part of a club amplifies the collective bargaining power, enabling members to negotiate better terms and gain access to exclusive investment opportunities that may not be available to individual investors.

Overall, joining an angel club not only expands your investment horizon but also enriches your experience through community engagement, learning opportunities, and increased investment effectiveness.

One of the most active clubs in the South West is Angel Investors Bristol (AIB) with a growing membership of around 100. They actively engage with the regional Ecosystem (Universities, Incubators, Government Bodies, VC’s) to source an excellent level of deal-flow opportunities and meet up for pitches and social events monthly. Other clubs in the region include Dorset Angels, Mainstream Angels, The FSE Group and Angels Invest Wales.

The group is very welcoming to both new and experienced angels across the South West region and enjoys a fresh and open approach to angel investment.

In conclusion: Spread your wings and soar

In conclusion, angel investing in the UK, fuelled by the SEIS and EIS allowances, presents a tantalising opportunity for investors willing to take the plunge.

Yes, there are risks involved, but with proper due diligence and strategic planning, the rewards can be extraordinary.

So, dear investors, spread your wings, explore the vast skies of angel investing, and embark on a journey filled with excitement, growth, and the thrill of possibility. Remember, fortune favours the bold, and in the realm of angel investing, boldness is rewarded.

As always, our team is here to guide you through the intricacies of angel investing and help you navigate the skies with confidence. Until next time, happy investing!

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