EIS Association Says Private Investment Will Drive Post-Pandemic Economic Recovery

The Enterprise Investment Scheme Association (EISA) is launching an initiative with the aim
of establishing the ‘best basis’ on which to attract the private investment in promising
British companies that it believes will fuel economic recovery over the months and years
ahead. The initiative will compliment efforts by the chancellor to stimulate economic
activity.

The Enterprise Investment Scheme (EIS) is a government-backed programme of tax
incentives designed to stimulate private investment into British growth businesses. The EISA
is a membership organisation of the companies involved in attracting and managing those
investments and spans both the Seed (SEIS) and main Enterprise schemes.

It has a further mandate to lobby government decision makers on how to shape its future
EIS policy in the best way to attract more private capital, based on the experience of
members and feedback from the investor community.

Mark Brownridge, the EISA’s Director General, commented:

“The EISA has a key role to play as we now look at kick starting the economy again. Over the
past 25 years 27,000 businesses have been supported by £20billion of private investment”.
“Many of these businesses have proved to be the country’s real winners, such as Not on the
High Street, Brewdog and Skyscanner, bringing not only employment and material economic
value but also developing world leading technology and medical research”.

Now is the time for us to be reviewing exactly what conditions and incentives would attract
new investors to play their part in future business successes. We know that many potential
investors have resisted investing over the past six months, so that there is a sizeable pool of
funds waiting to be leveraged”.

“We now need to make sure that these monies are put to good use in the best possible way.
Government measures introduced so far, such as the Future Fund, CBILS and BBLS to help
start-ups and scaleups, have created a sticking plaster but as we move forward and look to
reset the economy, we need these dynamic young companies to provide us with the jobs,
innovation and growth that we will so desperately need as we enter into a post pandemic
world”.

“I strongly believe schemes with a long track record of successfully raising significant sums of
money for small businesses but that haven’t to date been called upon to play a part in the
economic recovery, such as EIS, SEIS and VCT, can refuel the fire of the UK’s most
entrepreneurial businesses.”

In early July the EISA initiated a research project with the aim of gaining a better
understanding of where in the UK’s business ecosystem the Covid-19 pandemic has led to
funding gaps and market failure. The research aims to shed light on how companies in the
worst affected sectors can be best supported now and into the future.

The project’s output will be an indepth assessment of the current state of the SME funding
market and ask for feedback from start-ups and scaling companies on what changes to the
schemes in their present state, or other initiatives, would best convince wealth investors to
committing surplus wealth to funding their growth.

Mr Brownridge said the research survey had been launched:

“With a view to supporting the government with the key data that will help in them set the
policies to ensure the private sector is fully engaged, and plays its part in the growth agenda
as we move forward”.

“We are grateful to Wearenova, Startup Funding Club, Kin Capital, Edition Capital and
Hambro Perks as initial sponsors for this work, and are keen to attract other similar
corporates so that the research can be as deep and informative as possible”

The EISA intents to present recommendations on the basis of the research project ahead of
the November Budget, when any changes to the existing EIS and SEIS schemes would be
announced.