Why invest in EIS?
Strong returns, portfolio diversity and taking an active role to fund regional companies that will shape the UK economic future are key drivers in the continued investor demand for Mercia’s Enterprise Investment Scheme (EIS) Fund to back entrepreneurs.
And of course, those inspired to invest can also reap the rewards for the tax relief that is designed to support entrepreneurialism.
Demonstrated strong performance
Mercia EIS Fund’s past performance is among the strongest in the industry, with early funds on target to achieve the 3x target including tax, with additional exits.
Mercia’s Complete Connected Capital Solution is combined with our unique investment strategy to deliver end-to-end funding to high-growth businesses.
We can fund companies with different pools of capital starting with Mercia’s EIS Funds or other third-party funds, and then selectively using Mercia’s proprietary capital. But equally, we also deploy our investment team of industry specialists with venture capital expertise, to work extensively with our portfolio companies to scale each business with the aim of ultimately delivering shareholder returns.
Mercia can provide a ‘Complete Connected Capital Solution’ for entrepreneurs and small companies, starting from seed rounds of £100,000, larger rounds of up to £2.0million, and building to funding rounds of £10.0million.
Our key information document (KID) for Mercia’s EIS Funds can be found here.
We are a regional investor
Mercia offers a unique hybrid investment model that drives value creation, controls risk and delivers profitable exits.
Mercia’s EIS Funds have an investment-led venture capital strategy, investing nationally with a focus on the under-served regions; specialising in the identification, creation, funding and scaling of innovative technology businesses with high growth potential, creating a strong investment proposition.
Mercia invests in the UK regions understanding that this is where the majority of high growth firms can be found. Whilst many of our peers focus their time in London or the South East, Mercia has built its camp around the UK regions which offers significantly greater potential to build value for our shareholders
Nearly 100 investment professionals and support staff
19 university partnerships
4 asset classes
1 complete capital solution
Complete Connected Capital Solution
A unique funding model incorporating private investor’s capital, institutional co-investment and Mercia can fund companies with different pools of capital, initially via its own EIS Funds or other third-party funds, and then selectively using Mercia’s proprietary capital. Mercia is therefore able to provide a ‘Complete Capital Solution’ for entrepreneurs and small companies, starting from seed rounds of £100,000, larger rounds of up to £2.0million, and building to funding rounds of £10.0million.
Is EIS for you?
EIS is an investment opportunity geared towards a sophisticated investor who can tie up their capital for the long-term and who doesn’t need to draw an income from this investment.
Typically, EIS is for those with a high-risk appetite and long-term investment horizon and a desire to invest directly into fast-growth British companies. For those that may want to defer paying tax on a capital gain from selling business, who need to manage a large income tax bill, or who want to reinvest a tax-free lump sum from a pension, start-ups are an attractive asset class.
A sophisticated investor
Investors are demonstrating an increasing appreciation of risk, particularly against a backdrop of large valuations, dwindling returns and a new breed of Millennial investors that have seen titans unseated by new tech entering the market.
A well-diversified portfolio
The popularity of Enterprise Investment Scheme (EIS) Funds is bolstered by the range of opportunities a well-diversified portfolio of knowledge-intensive small companies can offer to help deliver the desired level of return. Especially those companies with IP and some traction. These companies have already proven themselves and EIS can offer them the investment injection they need to crystallise future success.
Tax-efficient technology fund
Our Mercia EIS fund is a tax-efficient technology fund, optimised to source, support and scale UK growth enterprise across key sectors in which we have deep expertise. The Fund aims to provide investors with access to a portfolio of high growth opportunities in pioneering technology-driven businesses combined with a risk managed investment strategy and attractive tax advantages.
Complete Connected Capital
At the heart of the our strategy lies the combination of Mercia’s ‘Compete Connected Capital Solutions’ and our unique investment strategy, designed to provide fledgling technology business with a singer investment partner solution, in addition to a sector specialist investment team, proprietary deal flow sources.
Mercia’s EIS Fund targets businesses with proven commercial traction, moderate capital requirements and competent, experienced management teams, across the following five technology-driven sectors; Life Sciences, Electronics & Telecom, Digital Solutions & Entertainment, Software & the IoT, and Advanced Materials & Specialised Manufacturing.
|Minimum Investment: £25,000
Target portfolio size: Approximately 15 companies
|Deployment timeframe: Each EIS fund aims to be fully invested within 12 months of the fund closing|
|Target performance: Mercia aims to triple invested capital (including income tax relief and loss relief)|
|Closing dates: We always have an EIS Fund open, with funds closing at the end of March, June and December of each year|
|To retain the tax reliefs, investors must hold the investment for a minimum of three years, with holding periods expected to be five to seven years|
|Our funds are unapproved by HMRC, meaning you can claim the tax reliefs based on when each underlying investment is made. Each company in the fund will have received advanced assurance prior to an investment being made|
|Investments are made into sectors which have modest capital requirements but high growth potential|