EIS investments are made into early-stage, high-growth private companies. Unquoted investments are by their nature illiquid, and so exits are vitally important in managing this high-growth asset class.
Therefore, investors and advisers should look at EIS fund managers exit track record very closely before committing capital.
However, there are many different types of exit in the EIS industry, ranging from the high multiple cash exit in three years and one day, all the way across a spectrum to a low value exit in under three years, with no cash consideration and the sale proceeds paid in the acquirers stock.
In the last year, the Mercia EIS Fund has delivered four 8x and one 20x exits, so we have a lot of recent experience in this area. Most of our exits have intentionally been simple, but this is not always possible.
Dr. Paul Mattick presents various case studies of different exit scenarios.
(Capital at Risk. Past performance is not a reliable indicator of future return)