What Is the Enterprise Investment Scheme (EIS)?
Enterprise Investment Scheme (EIS) is an investment program in the United Kingdom that makes it easier for smaller, riskier companies to raise capital. The Enterprise Investment Scheme helps riskier companies by giving their investors federal tax relief, which acts as an incentive to investors, making the potential purchase of those companies’ shares more appealing. The EIS works by granting 30% of what the investor pays for the shares as a credit that then reduces the investor’s individual income tax owed for the year that the individual purchased the shares.
EIS funds offer a simple way of building investors a portfolio of early-stage businesses, or startups. With most EIS funds, the decision about which opportunities are chosen to make up your portfolio is made for you by the fund manager.
How much will you be paying in fees?
This is something to bear in mind as EIS funds can charge significant fees. Most funds will charge fees in line with traditional VC models (2% management for five years plus 20% carry), but this does differ from fund to fund.
EIS fund performance
As our funds are relatively new (Access EIS first started deploying in February 2020, Fund Twenty8 first closed in 2017, Growth Fund in 2018), it will still be some time before we can show how these funds have performed. What we can disclose is the final portfolio for the first iteration of Fund Twenty8, which finished deploying this year. As of February 2019, the portfolio’s paper value had grown to 115%. Its final portfolio is a testament to the fund’s mission: to deliver investors a large and diversified portfolio of at least 28 investments.
- 233 investors took part
- Invested a total of £4.55m
- Diversified over 32 investments
- Across 10 sectors
