EIS money raising edges higher
Figures from HMRC show the Enterprise Investment Scheme (EIS) was used to raise £1.93bn in 2018-18, slightly higher than the £1.9bn the previous year. The figures have effectively plateaued in the past four years, but the figure remains around the all time high.
The number of companies raising money increased from 3,655 to 3,920, including 1,710 companies that have used EIS for the first time. The number of companies has reached a new peak. Information and communications companies raised one-third of the total cash.
Since the EIS was launched in 1993, there has been more than £20bn raised by 29,770 companies. Since 2006-07, 82% of the companies applying for advance assurance of EIS eligibility have been approved.
The Seed EIS is newer, having been launched in 2012, and £1bn has been raised by 12,900 companies. In 2017-18, £189m was raised, up from £187m last year, and most of this was raised by new companies.
The Social Investment Tax Relief scheme is newest having been launched in 2014. So far, £6.7m has been raised.
Seedrs launches accelerator
Crowdfunder Seedrs has launched a fast-moving consumer goods accelerator programme. Food and drinks businesses have always been a staple of crowdfunding platforms. Breweries have always been a particular favourite of investors, although the demise of Redchurch brewery shows the risks.
There is a seven-week programme that starts with access to capital, engaging your network and then a PR workshop in week three, which will provide advice on how to get the attention of the press. Pitching to buyers is followed by writing your Seedrs pitch in week five. Engaging your community and promoting your brand are in the penultimate week, with week seven including a demo day and going live on the Seedrs platform.
An example of the type of company that this accelerator could help is Watneys Beer Company, which is currently raising cash on the Seedrs platform.
Watneys is hoping to raise £400,000 to enable it to revitalise the Watneys beer brand (www.watneys-beer.com). The pre-money valuation was £1.79m and new investors will own 18.3% of the company. The offer has already raised £363,000 from more than 240 investors.
The EIS eligible investment is a London-based craft brewery that was launched in 2016 and is reinventing old brands for new drinkers. The Watneys brand started out in 1837 but it disappeared in the 1980s. The range includes Watneys pale ale, Party7 extra pale ale and Sarcasm citrus pale ale.
Drug developer Sareum raised £781,000 at 0.4p a share via Hybridan and PrimaryBid.com. The price was a 27.3% discount to the market price. There was an institutional investor that invested £100,000 and the rest came from existing investors and new retail investors. The cash will be used to move lead preclinical TYK2/JAK1 inhibitor programmes in autoimmune diseases and cancer (SDC-1801 and SDC-1802) towards human trials. These could start in 2020. However, Sierra Oncology, which holds the licence to the Sareum oral CHk1 inhibitor SRA737, is prioritising its own lead drug and is seeking option to fund further development of SRA737.
The Business Funding Show is holding an evening with angel investors on Wednesday 3 July at 6pm. It is being held at the We Work Chancery Lane (Fox Court) in 14 Gray’s Inn Road, London. The link to the event is https://www.eventbrite.co.uk/e/evening-with-angel-investors-tickets-57691445667?ref=enivtefor001&invite=MTY3NTg3NzEvaHViaW52ZXN0QGhvdG1haWwuY29tLzA%3D&utm_source=eb_email&utm_medium=email&utm_campaign=inviteformalv2&utm_term=attend.
A platform to connect M&A professionals and clients has raised £213,000 in return for a 5.6% stake. The Seedrs offer has raised more than the £200,000 originally asked for.
MergerLinks collates information about deals and helps potential clients to choose the correct adviser. It also helps management to know what deals are going on in their sector. The pre-money valuation was £3.61m.
MergerLinks (www.mergerlinks.com) wants to offer subscriptions to its transactions database and search tools. It also intends to offer competitor research and paid promotional products.
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