We believe that venture capital as an asset class has the potential to outperform most other asset classes over the long term.
Venture capital is about providing businesses with capital to invest in technology and infrastructure at the early stages of their lifecycle, and we believe those upfront investments are increasingly what drives long-term business success.
By investing in the venture capital asset class, an investor can get exposure to the types of companies we believe may deliver great success, and therefore potentially high returns, in the future. And this doesn’t take into account the magnifying effect on returns that the SEIS and EIS tax schemes can have on an investor’s potential returns.
But a well-balanced portfolio should have a broad spectrum of risk baked in and we believe that venture capital offers a compelling case to form part of the high-risk, high return-strategy of any investor’s overall portfolio.
Seedrs will soon be launching the EIS100 Fund. To find out how you can build a diversified portfolio of up to 100 British startups, pre-register today.
EIS Relief Examples
Illustrative Examples (using a single company investment as an example):
Example 1: Investee company doubles in value
An investor subscribes £10,000 for shares in the 2018/19 tax year. The investor pays income tax at a rate of 45%. In the 2022/23 tax year, the investor sells his/her shares for £20,000.
Example 2: Investee company maintains the same value
The facts are the same as Example 1, except that in the 2022/23-tax year, the investor sells his/her shares for £10,000.
Example 3: Investee company winds up
The facts are as in the previous examples, except that the investment unfortunately fails completely and is wound up in the 2022/23 tax year, with the investor receiving no money back.
These examples are for illustrative purposes only and are not an indication of the future performance of the investee companies in which the Fund will invest.
Investing involves risks, including loss of capital, illiquidity, lack of dividends and dilution, and should be done only as part of a diversified portfolio. Please read the Risk Warnings before investing.
Tax treatment depends on individual circumstances and is subject to change in future.
The Seedrs 100 EIS Fund (“the Fund”) operates on the basis of deployment logic that enables investors to decide to automatically spread their investments through the Seedrs platform across eligible businesses using a proprietary algorithm. Investment through the Fund will be made at the investor’s discretion on the basis of predetermined criteria. Seedrs will not exercise any discretion in relation to the selection of investments made through the deployment logic, nor will it perform a fund management role. Each investor will be entitled to any returns from the shares held on their behalf (subject to platform fees). The Fund does not constitute an alternative investment fund, HMRC approved EIS fund, or collective investment undertaking. The Fund is therefore not a “fund” in the traditional sense and use of any terminology relating to investment funds is intended for illustrative purposes only.
Tax treatment depends on individual circumstances and is subject to change in future.
Seedrs does not provide tax advice of any kind, and nothing in this document constitutes such advice. If you have any questions with respect to tax matters relevant to your interactions with Seedrs or its affiliates, you should consult a professional tax adviser.