Seedrs to bring VCTs to a new generation of investors
ProVen VCTs, managed by Beringea, will be the first VCT fundraise on the Seedrs platform
Since their introduction in 1995, Venture Capital Trusts (VCTs) have played a vital role in making the UK the hub for entrepreneurship and venture capital that it is today.
Over the past three decades, the industry has grown substantially and more than £6bn is now managed by VCTs, providing financial firepower to more than 1,100 start-ups and scale-ups across the country. It has been behind start-up success stories including Depop, Zoopla, Monica Vinader, Graze, and Quantexa – the UK’s latest unicorn.
In short, VCTs are funds that raise money from investors across the UK, who, in turn, benefit from a series of tax reliefs for committing their money to back riskier high-growth companies. Not only do investors receive 30% income tax relief on their investment, providing the shares are held for a minimum of five years, but any dividends paid by VCTs are tax-free and there is no capital gains tax on the disposal of the shares..
Historically, VCTs have catered to an older demographic of investor – according to research by the Venture Capital Trust Association in 2022, the average age of a VCT investor is 56.
And yet, many more investors could benefit from tapping into VCTs. Although investments in early-stage companies are always risky and may not return the money that investors put in, VCTs – by backing a diversified portfolio of carefully selected high growth businesses at an early stage – have the potential to deliver healthy returns.
In the ten years to September 2023, the ten largest VCT managers delivered an average net asset value total return of 81.4%. This means that, once investors have reinvested any dividends they received, the average investment in a VCT would have considerably outperformed the annualised return of the FTSE 100 over the past decade (6.6% in the ten years to 2022).
Seedrs, Europe’s leading private investing platform, provides thousands of investors – including younger and more diverse demographics – with the opportunity to tap into the success of innovative early-stage businesses, and is now ensuring that a new generation of investors can benefit from the opportunities this asset class offers.
The ProVen VCTs are two of the UK’s largest and longest-standing VCTs. Since the launch of ProVen VCT in 2000 and ProVen Growth and Income VCT in 2001, the funds have been behind many of the UK’s entrepreneurial success stories. From their investment in the Vinader sisters and their eponymous jewellery brand, Monica Vinader, which was sold at a 7.7x return, through to Chargemaster, one of the country’s leading electric vehicle charging networks that was acquired by BP in 2018, many successful businesses have been fuelled by investment from the ProVen VCTs.
As generalist VCTs (meaning that the funds back companies across emerging technologies such as fintech and artificial intelligence as well as established industries such as retail and healthcare) the ProVen funds have grown to more than £330m under management and a portfolio spanning 52 start-ups and scale-ups including:
- DASH Water – the UK’s leading seltzer brand known for its innovative use of wonky fruit and veg to flavour its drinks.
- Lucky Saint – one of the country’s most recognisable low-alcohol beer brands.
- MPB – one of the world’s best platforms for buying and selling pre-owned camera equipment, which raised £50m in its Series D in 2021.
- CreativeX – an AI-enabled platform used by the likes of Google, Meta, Amazon and Nestlé to analyse the performance of visual marketing, which raised $25m in its Series B in 2022.
Seedrs will be providing eligible investors with the opportunity to invest in the ProVen VCTs.
Tom Hörbye, Director LP & Co-Investments, Seedrs, commented: “Since 2012, Seedrs has led the way in democratising the venture capital industry, pioneering innovative ways of allowing money to flow into the startup ecosystem. In recent years, this has included enabling Europe’s leading VC funds like Passion Capital, Seedcamp and JamJar to broaden investor access on our platform through our revolutionary VC Fund Product.
Now, we are excited to bring the exciting VCT asset class to our investors, offering them the opportunity to invest in the trusts that fuel some of the UK’s most innovative businesses”.
Karen McCormick, Chief Investment Officer at Beringea, commented: “VCTs are the best kept secret of the UK venture capital industry. We have a long history of delivering returns through actively backing many of the country’s best-known start-up successes.
“The experience and scale that has been built up over this time means VCTs, particularly given their tax benefits, are attractive investments. We are therefore working hard to ensure that new audiences of investors – many of whom are already angel investing or dipping their toe into new products such as cryptocurrency – are able to access their benefits.”
About Seedrs
Seedrs is Europe’s leading online private investing platform that allows individual investors to invest in startups, growth companies, and, if eligible, top VC funds, as well as enabling ambitious entrepreneurs in all sectors to raise capital from their communities, angels and institutional investors.
Since its launch in 2012, Seedrs has funded over 2,000 deals, participating in rounds totalling over £2.7 billion.
With the acquisition of Seedrs by Republic in 2022, it is now part of the largest private investing platform in the world, with more than 2.5 million members globally. The combined strength of Seedrs and Republic gives both investors and entrepreneurs unprecedented access to capital and investment opportunities across the globe.
About Beringea
Beringea is a transatlantic venture capital investor that seeks to create lasting success for rapidly scaling entrepreneurial companies. Across its funds in the UK and the US, Beringea manages more than $800m on behalf of a range of institutional and retail investors.
In the UK, Beringea manages the ProVen Venture Capital Trusts, two of the UK’s largest and longest-standing VCTs. Together, the ProVen VCTs manage more than £330m and a portfolio of more than 50 growth companies.
