The EIS Navigator

Recently, SFC Capital and Beauhurst issued a report about the seed investing market. It showed some interesting, and rather worrying, trends. In this episode, Stephen Page, CEO of SFC Capital discusses the report and the seed market.The big news in the report is a decline in seed funding over the past couple of years. Given this seems to go against trends in other parts of the venture capital market, we discuss possible reasons why. Stephen suggests some possible solutions, including the government updating the SEIS scheme.With SFC doing more SEIS deals than anyone else, we can get some insight into other market trends. We also discuss inflation in valuations and how this can make things harder for founders to get funding.Seeding to Succeed: https://www.beauhurst.com/research/seeding-to-succeed/SFC Capital website: https://sfccapital.com/Emails: stephen@sfccapital.com, info@sfccapital.comSuggested book:Noise by Daniel Kahneman, Olivier Sibony and Cass R. SunsteinBonus book from Brian:Peak by Anders Ericsson and Robert Pool

In September, Gresham House announced the intention to buy Mobeus and add their four VCTs to its existing Baronsmead VCTs. Bevan Duncan returns to the podcast to discuss the deal and its rationale.We cover the strategic reasoning as well as how they chose a manager. We dig a bit into the diligence, including how they assessed past performance. As a deal that is about growing rather than cost savings, we also discuss how the new company will operate and what opportunities it may bring.With some recent VCT fundraisings flying off the shelves , we also chat about the current state of the market. We chat about investor demand for VCTs and also dig into how the market is developing for VCTs making investments and how the strong liquidity at later stages is filtering down.Gresham House website: https://greshamhouse.com/Gresham House VCTs website: https://greshamhouse.com/venture-capital-trusts/Suggested book:Legacy by James Kerr

Lucius Cary first raised money for a small restaurant chain in the late 1970s. The difficulties of doing that inspired him to start a newsletter connecting startups and investors. Four decades later, he is on the seventh iteration of his fund.We start with Lucius's own story. He tells us how he found his first investors in an environment with no infrastructure at all. He tells us how this inspired him to help others with the same problems, and how that business led into fund management.Oxford Technology still invests in very early stage-science companies, often investing before there is even a product. We talk about how he assesses such companies and how he paces investment to help manage the risk of being too early. We also talk about his 'one-hours drive rule'. As an investor in over 150 companies, Lucius brings a wealth of examples, both of companies and his unique way of working.Website: https://www.oxfordtechnology.com/

John Glencross has been at the forefront of the EIS and VCT world for over two decades, co-launching the first approved EIS fund in 1999. We take advantage of this to get a long-term perspective on how the market and the Calculus investment process has changed over time.We start at the launch of their first fund, with the challenges of a product that was even less well known that it is now. John talks about how they found an investor base and avoided the worst of the bursting of the internet bubble.The areas that Calculus invest in have evolved over this period. We discuss how these change, the challenge of choosing areas that will be do well over the next few years. We also discuss how economic cycles interact with this, including the financial crisis in 2008 and the more recent pandemic. We also chat about the evolution of the EIS & VCT market, how it has got better and what problems still need addressed.Website: https://www.calculuscapital.com/Suggested books:The Prophet by Khalil GibranMemoirs of an Infantry Officer by Siegfried SassoonCrisis Deluxe by Chris Coffman

Scott Weavers-Wright is a serial entrepreneur. When we had him on last year (episode 12), we only managed to discuss one of his first exit so we had to get him back for more. We pick up his story from where we left off, with Scott getting into investing with his business partner Fred. He explains how this led to him funding the creation, then running Elevaate, a platform that allows online stores and brands to manage and monetise product placement.We discuss the challenges that this brought, many of which were different from his previous business. We discuss the challenge of managing the company prudently when there is money in the bank. We also talk about keeping staff motivated when sales and business is slow to appear and why the company took venture capital funding. Scott also talks about how he raised the company's profile and how this helped generate interest for an exit.Finally, we chat about the lessons Scott has learned, include the need for patience and belief, and how he applies these to his investing.Websites - https://haatch.com/https://scottweaverswright.com/

Investors and founders all-to-often see legals as a necessary evil. SeedLegals is changing that, thinking about how how to get better and solutions for all parties. In this episode its Founder, Anthony Rose, talks about what they are doing and how they have developed one the past few years.We discuss what the aims of legal documents really are, how investors and founders should think about them and how they are involved in a kind of social engineering. We also chat about how good legal documents can help solve problems and the mistakes that investors and founders make when creating them.As well as what it does for investors, SeedLegals is still a relatively new business. Anthony also talks about product development, how they balance automation and customisation and how playing the long game is paying off for them.Website - https://seedlegals.com/LinkedIn - https://www.linkedin.com/in/anrose/Twitter - https://twitter.com/anthonyrose

Video gaming is a huge market, but relatively niche within EIS. Steve Iles has spent his whole career working in and helping the video games industry and his current focus is at the intersection with funding. We start off by talking about the history of video gaming and how it has shaped the industry as it stands today. This leads into the attractions of the different business models and what what does or doesn't make a good video game. Steve then talk about lower risk ways create games, trends, how investors should or shouldn't diligence video game companies and why gaming hasn’t taken off in EIS yet.Website - http://originvp.com/Suggested reading:https://www.gamesindustry.biz/https://newzoo.com/https://gamasutra.com/

EIS & VCTs have been described by several guests as one of finances best kept secrets, which makes the job of advisers challenging when they recommend them. Stephen Jones has a lot of experience dealing with these, and has won several awards for the quality of his services in the tax-advantaged area.This is the second part of a really good discussion which is split over two episodes (see episode 29 for the first part). In this one, Stephen goes into more details about some aspects of EIS and VCT product selection. We talk about how he looks at fees and what fee structures he likes, past performance and the challenges of getting good reporting systems.Website - https://www.clearsolutionsifa.co.uk/Phone - 01283 730080Suggested books:Family Inc by Douglas McCormick

EIS & VCTs have been described by several guests as one of finances best kept secrets, which makes the job of advisers challenging when they recommend them. Stephen Jones has a lot of experience dealing with these, and has won several awards for the quality of his services in the tax-advantaged area.We had a really good discussion which will be split over two episodes. In this one, Stephen talks about the framework that he uses for giving advice and how & where tax-advantaged investments fit into that. We discuss some of the issues around suitability and how to choose between EIS and VCTs. We also talk about product selection at a high level, but will dig into that more in next week's bonus episode.Website - https://www.clearsolutionsifa.co.uk/Phone - 01283 730080

International expansion is key to success for many startups, but also fraught with difficulties. Tofiq Qureshi of Innvotec has worked in several countries and brought technology to many more, so has lots of experience of internationalising.Getting timing right is the first challenge and we discuss when is right for a startup to look overseas, and when is too early. We also talk about figuring out when to find a local partner, what sort of partner and how to find them, as well as when to go direct and build a local presence instead. Tofiq also gives his views on overcoming language, culture and local regulatory challenges. We don't ignore the pandemic either, as this has changed how several of these can be approached. InnvotecWebsite - https://www.innvotec.com/LinkedIn - https://www.linkedin.com/company/innvotec/Twitter - @innvotec1986Suggested books:Exponential Organizations by Salim Ismail The Lean Startup by Eric Ries