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Bethnal Green Ventures

Financial Performance

BGV has a six-year track record of investing in tech for good companies through its first fund, Bethnal Green Ventures LLP. During this time BGV have invested £2.6m in 107 tech for good companies, and the realised and unrealised valuation of its investments at December 2018 was £4.9m, 1.9X the initial cost.

BGV’s Tech For Good SEIS and EIS Fund 2 builds on the company's track record of success. Investments will be sourced from its tried and tested accelerator programme and from promising companies within its existing portfolio. The Fund provides investors with the opportunity to gain exposure to high- potential tech for good companies in a diversified portfolio, while benefiting from the advantages of SEIS or EIS tax relief.

The minimum investment size for the Fund is £20,000

Important Notice: Investing in the Fund may not be suitable for all investors. This investment is not open to retail investors. It is only available to professional investors who have certified as a ‘high net worth investor’ or a ‘sophisticated investor’ in accordance with the rules contained in the FCA Handbook of Rules and Guidance (“FCA Rules”) and are able to elect to be treated as professional clients (and are found appropriate to do so, having regard to your knowledge and experience of similar investments).

Investors should be aware that investing in unquoted and immature companies (including SEIS and EIS Qualifying Companies) carries with it a high degree of risk. Investors should seek advice from an independent adviser, authorised and regulated by the FCA, before investing and take appropriate independent professional advice on the tax aspects of their investment.

Portfolio Strategy and diversification

The Fund will aim to invest in 20+ companies (a minimum of 10) providing a well-diversified portfolio.

Investments will be made across accelerator, pre-seed and seed stages, sourced through new applications to BGV’s accelerator and also from high potential companies within BGV’s existing portfolio.

At least 75% of the investment in the portfolio will aim to be eligible for SEIS relief with the remaining investments aiming to be eligible for EIS relief.

Portfolio allocation
Stage Accelerator Pre-seed Seed
Typical time from start-up 0-6 months 12-18 months 24 months
Typical investment size £20k for 6% equity £50k for ~5% equity £100k for ~ 3% equity
Expected tax eligibility SEIS EIS EIS

Exits

Early stage investing requires a patient outlook. We expect successful exits from our investments seven years to ten years after our first investment.

Typically our exit hypothesis will be the acquisition of the portfolio by an established incumbent in the market or established large business entering a new market. An exit to another investor in a secondary transaction may also be possible where the portfolio company continues to raise further rounds of investment.

Fund Performance Scenarios

 The following indicative fund performance scenarios are based on a portfolio mix of:

• 20 accelerator investments : 10 pre-seed investments : 4 seed investments
• 75% SEIS eligible investments : 25% EIS eligible investments

(As calculated on a subscription of less than or equal to £50,000.)

Why invest under SEIS or EIS?

BGV aims to invest in only the best tech for good companies, not for tax reasons, but because we believe they are good investments. From this essential starting point, SEIS and EIS can provide considerable tax reliefs for investors.

The Seed Enterprise Investment Scheme offers a number of tax reliefs to investors, which may include:

• Individual income tax relief of 50% of the amount invested up to a maximum of £100,000 per tax year per investor
• Exemption from Capital Gains on gains made on the disposal of shares
• Loss relief if the company fails or the shares are sold at a loss
• Capital gains, arising on the disposal of any asset in a tax year,

The Enterprise Investment Scheme offers a number of tax reliefs to investors on up to £1m of investment made into eligible companies per tax year, which may include:

• Income tax relief of 30% of the amount invested
• Exemption from Capital Gains on gains made on the disposal of shares
• Loss relief if the company fails or the shares are sold at a loss

Please note that tax benefits under SEIS and EIS depend on personal circumstances, are not guaranteed, and rely on UK tax legislation which may change in the future. Please note also that if any of the qualifying criteria for SEIS or EIS are not met in the three years following an investment, tax reliefs in that investment may be reduced or withdrawn.

The descriptions above are not an exhaustive list of SEIS and EIS tax rules and are only intended as guidance. Nothing in this profile shall be regarded as constituting tax advice and prospective subscribers should seek advice from a suitably qualified independent adviser before deciding whether or not to make an investment. No reliance should be placed upon the tax guidance herein.

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