The EIS Navigator

Although investing on AIM through EIS fund and VCTs would appear to have several attractions, there are very few fund managers who invest in this area. Seneca Partners are one and we get fund manager Matt Currie to talk about it.We cover many areas in the discussion. We talk about the differences in governance between AIM, fully listed companies and unquoted companies and what this means for investors. We then go into the flow of investments, how strong it is, and the how brokers help. Matt also discusses the different level of diligence that's possible and how AIM-listed company management differ in how they and raise from unquoted companies.Matt also talk about what happens after investment. He talks about the relationship with company management and the challenges that some private investors present. We also discuss liquidity and selling shares, how exits on AIM need to be managed and different approaches to doing that. Finally, we talk about the current market and what Matt sees about how companies are behaving. LinksSeneca Partners - https://senecapartners.co.uk/Subscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listenSuggested booksThe Accidental Billionaires: Sex, Money, Betrayal and the Founding of Facebook by Ben MezrichBringing Down the House by Ben MezrichLegacy by James KerrBioMatt CurrieInvestment Manager, Seneca PartnersMatt joined Seneca from the RBS Structured Finance team in January 2017 where he completed 15 Leverage Finance transactions, being primarily mid-market private equity deals. Working alongside the top private equity institutions in the region, Matt led deals across the Leisure/Consumer, TMT, Professional Services, Manufacturing and Infrastructure sectors. Prior to that Matt spent four years with Deloitte, qualifying as a Chartered Accountant and working on both audit and advisory engagements throughout the North West. Matt graduated from the University of Manchester in 2010 with a degree in Management with Accounting & Finance.

Despite hopes that we may have a quieter year, 2022 turned out to be much more dramatic than 2021. The EIS navigator team have got another all-star panel to discuss what happened. Cristiana Stewart-Lockhart, Director General of EIS Association, Neil Cole, Head of Wealth Planning Solutions, UBS Wealth Management, and Kealan Doyle, Director, Symvan Capital join Brian to pick through the events of 2022 and the prospects for 2032.We chat through what's happened in fundraising, how demand for risk assets is going and how investors are viewing things. We also look at the effect of the falls in valuations, how the disconnection between public and private markets is being viewed and the balance between raising and deploying money. We also look at the renewal of the EIS and VCT schemes and the increase in SEIS limits, progress in ESG and get the panel to make some predictions for 2023.LinksEIS Assocation - https://eisa.org.uk/Symvan Capital - https://www.symvancapital.com/UBS Wealth Management - https://www.ubs.com/uk/en/wealth-management/home.htmlSubscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listenBiosNeil ColeNeil Cole is the Health of Wealth Planning Solutions at UBS Wealth Management. He has individual responsibility for the tax efficient investment world, focused on EIS, VCTs, inheritance tax, ISAs, and other relevant product types, and provides recommendations to UBS Advisers on which of these products should be offered.Kealan DoyleKealan is CEO and co-founder of Symvan Capital. He has worked with venture capital companies for 15 years, both in a corporate finance advisory capacity as well as a fund manager. He prefers to invest in a wide range of technology companies, but is also very interested in finding synergies within the Symvan portfolio of companies. Company interests include big data analytics, fintech, SaaS, 3D printing and network security. Before his involvement in venture capital investing, Kealan previously lead a structured equity products team at HSBC, and has worked at Deutsche Bank, Merrill Lynch and UBS. Together with Nicholas, he has since founded his own entrepreneurial businesses to focus on VC investing. Kealan holds degrees from the London School of Economics and the University of Toronto.Cristiana Stewart-LockhartChristiana Stewart-Lockhart is the Director General of the Enterprise Investment Scheme Association (EISA). She previously spent more than a decade working in Westminster including ten years at the Institute of Economic Affairs. She also founded EPICENTER, a Brussels based network of some of the most respected think tanks from across Europe. Christiana holds a BA in Politics from the University of York. She is a member of TISA’s Children’s Financial Education Policy Council and also sits on the Advisory Board for the All Party Parliamentary Group for Entrepreneurship.

The leisure sector faces very different challenges from the more tech focussed companies that most EIS and VCTs focus on. Harry Heartfield of Edition Capital specialises this area and gives insights into its past, present and future.We start by chatting about the challenges that covid brought. We talk about how leisure companies coped with their doors being closed and how they managed finances to survive. We also discuss how companies maintained brand awareness, so people would come back when they were allowed. Harry contrasts the challenges that different businesses had and how they coped.The discussion then turns to the current environment. Harry talks about some of the changes in the market, including relationships with landlords and availability of capital. His inherent optimism comes through, even with a recession coming, underpinned by the belief it will be a lot milder that what companies have been through recently.LinksEdition Capital - https://www.editioncapital.co.uk/Harry on LinkedIn - https://www.linkedin.com/in/harry-heartfield-2275983a/Subscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listenSuggested books:Our Mathematical Universe by Max TegmarkPrisoners of Geography by Tim MarshallBioHarry HeartfieldSenior Partner, Edition CapitalHarry has over 15 years’ experience in the leisure sector. In 2011, he joined boutique asset manager Ingenious becoming a Senior Investment Manager in their Live Entertainment Team. At Ingenious, he was responsible for working across several investment funds including several Venture Capital Trusts with a focus on leisure assets. During his time at Ingenious, he also developed and launched several investment products aimed at the retail market, including EIS products which raised more than £25m, and was Head of Investments and Acquisitions for Impresario Festivals plc until the sale of the business to media group Global for more than £28m.He set up Edition alongside the other Edition Partners in 2015. At Edition, he has overseen the development of Edition EIS and Edition Capital Projects, which have raised over £50m between them. He also was appointed as Strategic Advisor to Superstruct Entertainment (a Providence Equity backed company) from 2017 to 2020 as they made their first acquisitions including Sziget Cultural Management (Hungary) and elrow (Spain). In total, Harry has overseen deals in excess of £220m across the UK and Europe. He sits on the board of a number of Edition’s investee companies including WatchHouse Coffee, Borrow A Boat and Tailwise.

The power law is something that most venture capital investors are aware of, but usually only in the most general sense. Graham Schwikkard, CEO of SyndicateRoom, has just written a white paper on the topic using their data driven approach.We start on a bit of background, discussing what the power law is and what motivated the paper. Graham then explains how they approached the data, what decisions they made in their analysis and why. Fortunately it did show that returns fit a power law!We then go into what effect this should have on investors and, most particularly, how they should build a portfolio. We discuss how the characteristics of the power law mean that returns can improve alongside diversification. We also discuss what this says about stock selection and spray and pray approaches. Graham also talks about how different stages of investment give slightly different results and how that influences their investment strategy.LinksSyndicateRoom - https://www.syndicateroom.com/White paper on the power law - https://www.syndicateroom.com/invest/whitepaper-power-lawSubscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listenSuggested book:The Food Lab by J. Kenji López-altBrian also mentioned The Power Law by Sebastian MallabyBioGraham SchwikkardCEO, SyndicateRoomSyndicateRoom CEO Graham Schwikkard has over a decade of experience with data science and working with large datasets. He has a fascination with the dynamics of the startup investment network and after coming across the Companies House dataset in 2017, he spent many hours designing much of the analysis behind the Access Fund. Graham would like to see Access become a vehicle for delivering efficient capital throughout the network, and increase the odds of the system producing more Unicorns and economic growth. Prior to working at SyndicateRoom, Graham spent seven years as a management consultant, and has significant experience of helping companies develop market strategies and optimise business models. He also has in-depth technical expertise, focused on maximising efficiency.

The lack of secondary market liquidity has been a long term challenge, especially for companies that are not venture scale but still viable. Rufus Pearl is trying to improve that with a new scheme for investors to exit some of these investments and bring forward their loss relief.We start by talking about secondary markets for EIS and venture capital investments. We discuss the challenges, why its hard and what progress is being made. We also talk about different types of progress that companies can have, not just the successes and failures but also the spectrum in between.This leads us onto to talking about PlanD. We chat about the mechanics of how it will work and the likely effects on both investors and the companies they are invested in. Rufus then covers how he thinks it will develop in the near future and what will happen with the new fund.LinksPlanD - https://pland.co/Subscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listenSuggested book:The Go-Giver: A Little Story About a Powerful Business Idea by Bob Burg and John David MannBioRufus PearlFounder, PlanDHas 20 years of corporate finance experience, including smaller company fund raising and flotations in sectors ranging from media to mining and film to fintech. Rufus was founder & CEO of a multi-award-winning lifestyle accessories business with global sales, and the founder of Pearl Corporate Finance, providing advisory services to investment trusts that grew to c.$75m AUM via a ‘swaps methodology’ that became the foundation idea for planD.

While the business world is an ever-changing place, we seem to be in an exceptional time of flux. Reuben Wilcock has seen many small growth companies pivot and adapt and we tap into his knowledge.Our discussion starts with what drives pivots and what sort of changes we might see. Reuben gives several examples and talks about the evidence that companies should be obtaining to make these changes. We discuss some of the different circumstances that can drive the change and how these might affect what happens.We then move on to how companies manage these changes. We talk about the importance of boards and the role directors should play. Managing staff can also be challenging. Finally, Reuben talks about the common mistakes that he sees management making and what advice he would give to those contemplating pivots.LinksBlackfinch - https://www.blackfinch.com/Subscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listenSuggested books:Influence, New and Expanded: The Psychology of Persuasion by Robert CialdiniBioReuben WilcockHead of Ventures, Blackfinch VenturesReuben’s expertise in advising early stage companies has developed through a background spanning academia, technology start-ups and start-up acceleration. He has founded or co-founded four technology start-ups including Joulo, a smart home energy spinout which won the 2013 British Gas Connected Homes award and was acquired by Quby in 2014, and Bar Analytics, an IoT start-up that enables global brands to monitor beer quality and sales.With a PhD in Electronics, Reuben has extensive product design experience with deep technical knowledge of hardware, software and manufacturing. He is an inventor on five patents and named author on over 45 peer reviewed publications ranging from integrated circuit design to genetic algorithms. Before joining Blackfinch, Reuben was a leading figure in entrepreneurship at the University of Southampton where he sat on its IP Panel for five years, guiding the commercialisation of research innovations through licensing and spinouts.Reuben is a Royal Academy of Engineering award winning entrepreneur, and the lifetime membership that affords has offered visibility of some of the most innovative university spinouts in the UK. In 2015 Reuben founded and ran the Future Worlds accelerator, mentoring over 250 entrepreneurs and 50 companies over a four-year period. Companies included 5G silicon IP spinout Accelercomm, AI computer vision company Aura Vision, IoT transport startup Route Reports and HGV data analytics company Dynamon. Whilst at Future Worlds, Reuben also developed the business plan and was the execution partner for the Z21 Fund, run in partnership with the Solent LEP.

We've spoken a lot about tax advantaged investing, but how should an investor choose which VCT or EIS fund to give their money to? Ewoud Karelse is one of the long-standing analysts in the tax-advantaged market and has immense experience of looking at these products. In this episode, he discusses what to look at giving a wealth of tips. Essential listening for investors, IFAs and even providers who want to know how to improve their products!We start off with Ewoud emphasising the primacy of investor needs, especially where they have specific requirements. This leads onto discussing VCTs. We dig into the different dividend policies and how to look at their sustainability. We also talk about discount policies and how relevant they are.We follow this up by looking at factors that VCTs and EIS have in common. We talk about teams, what experience and how big they need to be. We discuss expenses, some of the different ways that they are charged and the debates around them. We also look at diversification and more.LinksEvelyn Partners - https://o2hventures.com/Subscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listenSuggested books:Malazan Book of the Fallen (10 books) by Steven EriksonFirst one - Gardens of the MoonBioEwoud KarelseProduct Specialist, Evelyn PartnersEwoud started his career in financial services with Allenbridge in 2000 and joined Towry Law in 2008 before joining Tilney in 2016, and Evelyn Partners in 2022. Ewoud is responsible for the research and selection of Venture Capital Trusts; (Seed) Enterprise Investment Schemes; Business Relief for Inheritance Tax Planning (AIM and non-AIM), and Social Investment Tax Relief products. He is also well versed in the use of Business Investment Relief for International clients.

The biotech industry attracted huge amounts of capital during the pandemic, but how is it faring in the post-pandemic world? Sunil Shah of o2h returns to give us an update on what's been happening.We start off by talking about the wider market. We discuss what's happening with capital and valuations, the contrast between public and private markets and how the US differs from the UK. We also dig into the M&A environment and, in particular, what is happening with big pharma who ultimately are the key buyers.We don't ignore the "operational" side either. Sunil gives some great insights into trends in the market, particularly around the use of AI for drug discovery and how perspective on that are changing. We look at some particular areas that seem promising, especially those where Sunil is invested.Linkso2h Ventures - https://o2hventures.com/o2h Chai Time webinars - https://www.youtube.com/channel/UC7YqoMJ566H7uau0E2WC3QwUK BioIndustry Association guide to investing in the UK biotech sector - https://www.bioindustry.org/policy/invest-in-biotech.htmlSubscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listenBioSunil ShahManaging Partner, o2h VenturesSunil Shah is an entrepreneur having begun his career in the Life Sciences team at PA Consulting. He co-founded Oxygen Healthcare Ltd which was fully acquired by Piramal Enterprises Ltd (BSE: PEL) in 2013. Since this time, Sunil has co-founded the o2h Group, this includes o2h Ventures, an investment firm that manages the HMRC approved ‘ Human Health’ Knowledge Intensive EIS fund and the o2h human health SEIS SEIS Fund; o2h Discovery, a medicinal chemistry research services company and o2h Co-Work Labs, a 2.7Acre Science Park in South Cambridge. Sunil has won the UKBAA Angel Investor of the year award in 2019 as well as the OBN Special Recognition Award for his significant contribution in the Life Sciences Industry. He serves on the Board of the BIA as well as Cambridge Angels. He is either Chairman, Non-Executive Director, Board Observer or an investor in over 20 Biotech companies in the UK. Sunil has a degree in Biochemistry from Keele and an MBA from Cambridge University.

While we have focused on venture capital and EIS/ VCT investors on the podcast, ultimately it is all about the companies that we invest in. Here we find out about two of them, together with the EIS fund managers who invested in them.Weedingtech supplies machines and supplies that can kill weeds without using herbicides. Its CEO, Leo de Montaignac, discusses how it works, some of the challenges he has had and how they have internationalised the business. Dan Somers of Boundary Capital talks about why it was an attractive investment, what its attraction were to an impact investor and how he overcame the concerns that many investors have about hardware businesses.Go Thrift is a retailer of second-hand clothing at industrial scale. Carl Walker, its CEO, talks about building scale when resources are scarce, how he overcame the supply and single SKU issues and what the barriers to competition are. OnePlanetCapital is an investor and Matt Jellicoe talks about why they invested, how he measured its impact and why he thinks it could be the safest investment in their portfolio.LinksWeedingtech website: https://www.weedingtech.com/Boundary Capital website: https://www.boundarycapital.com/Go Thrift website: https://gothrift.co.uk/OnePlanetCapital website: https://www.oneplanet.capital/Subscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listenBiosLeo is the CEO and co-founder of Weedingtech. As CEO he is responsible for building Weedingtech’s world class team, and steering its growth.  Leo ensures that Weedingtech remains focused on helping organisations around the world make their local areas greener, cleaner and safer than ever before. Committed to building long-lasting relationships where its customers remain the top priority, he cares passionately about Weedingtech being the best partner to anyone it works with. Leo co-founded Weedingtech because he saw an opportunity to provide the world with a safer way to weed. Prior to Weedingtech, Leo worked in a variety of roles in sales and marketing in IT. He had always wanted to start a business himself, and he left IT to start Weedingtech when the opportunity presented itself. Outside the office Leo is a keen foodie, cook and traveller.Dan Somers is the managing partner of Boundary Capital. He is a serial entrepreneur; founder and CEO of several IT businesses as well as executive and non-executive position of other growing electronics, software and green tech businesses. Dan is passionate about sustainability and impact as well as technology, and leads the business development for Boundary as well as managing some of the investments. Formerly a strategy consultant with LEK Consulting. He holds an MA from Cambridge University in Natural Sciences and a Diploma in Business Studies. A keen skier and ex-rugby player, now vicarious fan. Dreaming of post-lockdown on the ski slopes and rugby terraces!Carl Walker is CEO & Co-Founder of Go Thrift. Carl has worked in used clothing and the circular fashion sector for over 10 years and was recently nominated as a top 40 Northern Gamechanger. Go Thrift are one of the UK's leading vintage & used clothing retailers and pride themselves on being part of the solution to fast fashion pollution. They have won multiple awards for sustainability and circularity, including the Marie Claire award for best re-commerce brand.After a corporate career in public companies, Matthew Jellicoe founded and successfully exited two technology businesses in 2012 and 2018 respectively. He has been an active technology investor since 2012 and serves as a Non-Executive Director for two technology businesses. In more recent years he has specialised in sustainable investments. Matt is one of the founding directors of OnePlanet.Capital - a climate change focused EIS Investment Fund. The fund aims to combine strong investment returns with climate and environmental impact.

Valuations are a frequent topic of discussion for venture capitalists and founders alike, and are extra topical just now. We get Dave Foreman to draw on his experience to place them in context.He starts off by outlining what's happened in the past couple of years and where the market is now. He talks about what is or is not a reasonable valuation, with a particular focus on SaaS companies. Dave draws on examples to give us an idea of what he is seeing.We then dig into how valuations fit into the investment process. We talk about founder expectations and to what extent they are realistic or not. Dave digs into how dilution of founders is also a key factor when looking at valuations. He also digs into what extent as a manager you have keep investing when valuations are high and what he things of down rounds and market approaches to them.Praetura Ventures website: https://www.praeturaventures.com/Dave Foreman on LinkedIn: https://www.linkedin.com/in/david-foreman-praetura/Praetura EIS Growth Fund review: https://hardmanandco.com/research/tax-enhanced-research/praetura-eis-growth-fund/BioDave ForemanManaging Director, Praetura VenturesAs the MD and founder of Praetura Ventures, one of the only VCs head-quartered in the North, David Foreman has championed tech and health founders from the region and helped them grow exceptional businesses. The Praetura Ventures investment team review over 200 funding applications a month and £3bn worth of opportunities each year, deploying into just 15-20 select businesses per year.The Praetura EIS Growth Fund has now backed success stories such as BaniFi, Culture Shift, Patchwork, PEAK, Transreport and XR Games.Praetura pride themselves on their ‘more than money’ approach, which helps their portfolio founders build the best businesses they can. This includes initiatives such as their Operational Partners programme, which matches founders with active mentors from dedicated industry heavyweights from companies such as Apple, Dr Martens, AO.com and Social Chain.