The Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) use tax reliefs to incentivise private investors who recognise that significant returns are achievable if they are willing to risk their funds by investing in early stage businesses.
Early stage businesses often struggle to raise equity finance, so EIS/SEIS has established itself as a trusted and crucial source of equity funding. The schemes therefore play an important role in facilitating the smooth flow of risk equity capital from private individuals to early stage businesses.
EIS/SEIS is appropriate for investors who wish to include in their portfolio some higher risk based companies. EISA recommends taking professional advice before investing in EIS/SEIS funds or companies since the rules governing the EIS/SEIS are complex and interrelated with other legislation.
How much have the schemes raised?
Over £32Bn of private funding has been raised by EIS companies across the UK since the scheme’s inception in 1994 and May 2024. The most recent figures on the schemes from HMRC can be found here.
These range from small ‘friends and family’ rounds, business angel investments where individuals are contributing skill as well as funding, through to formal public offers and EIS funds. The number of professionally managed EIS/SEIS funds is growing and the sector is well established.
What should you consider before an EIS/SEIS investment?
It is a useful exercise to consider some or all of the following prior to assessing your investment:
- Size of intended investment
- Single investment or spread of investments
- Sectors that may be of interest
- Passive or active ie business angel wishing to deploy skills
Where can I learn more about investing through the EIS/SEIS?
You can use our guides to help you learn more about how to invest through EIS or SEIS.
You can also learn more about Fee Transparency here.
For further information, please contact:
- Your independent financial adviser for advice pertinent to your personal circumstances
- One of our members – you can explore the directory here
- HMRC Venture Capital Reliefs Team, Mid-size Business SO777, Newcastle NE98 1ZZ. Tel: 0300 123 1083
Please note: The EIS Association neither endorses any particular member, product or company/firm wishing to raise money under the EIS/SEIS nor does it accept any liability for advice given by its members.
Individual tax enquiries should be addressed directly with your own Inspector of Taxes and not the The Enterprise Centre, nor is EISA able to help with individual queries.