How to invest in start-up opportunities in the UK: angel investing, crowdfunding and SEIS funds

Find investment opportunities in the UK through being an angel investor

Angel investment in the UK

Angel investors provide high risk / high return investment opportunities in the UK in exchange for a share of the company. They are often established business owners themselves and have prior experience working with startups. In addition to providing the financial backing you need to get a venture up and running, angel investors will often share their expertise, which can be invaluable to the business's long-term success.

While the desire to help new businesses succeed plays a part in angel investors' decisions, it's not the only motivator at work. Angel investors also want to see tangible results from their investment. That can turn up the heat on startups to churn out a solid rate of return.

The hardest part of being an angel investor is securing regular, high-quality influx of investment opportunities. Networking is crucial to ensure this, but often hard to achieve if you are starting outside the UK venture capital / angel ecosystem.

Examples of angel investors in London can be found here: https://ukbaa.org.uk/

Equity Crowdfunding in the UK

Equity crowdfunding allows businesses to raise money from a number of investors, in a regulated way. Businesses list their UK investment opportunities on an online platform that allows investors and members of the public to buy shares in a business.

For businesses it may mean that attracting investors is easier. Bringing UK angel investors on board can be a time-consuming process because it typically involves pitching a startup's concept multiple times.Crowdfunding platforms, on the other hand, streamline the process by allowing startups to post their pitch in one spot where it can be viewed by a broad range of investors. This is beneficial for angel investors (in London or elsewhere) looking for investment opportunities in the UK as it means several potential opportunities can be reviewed in one place.

This being said, equity crowdfunding platforms do tend to perform better for consumer investment opportunities in the UK which are more relatable to a crowdfunding audience and tend not to display high tech propositions.

An example of a equity crowdfunding platform in the UK is: https://www.crowdcube.com/

SEIS/EIS Venture Capital Funds in the UK

An SEIS or EIS Venture Capital Fund is a UK managed investment vehicle that raises cash from individuals for the purpose of investing in a portfolio of SEIS or EIS eligible investment opportunities in the UK with the hopes of returning a profit to all those who have invested in the fund. SEIS Investors can claim up to 50% income tax relief on their investment. EIS Investors can claim up to 30%.SEIS and EIS investment funds can cover a range of investment opportunities, grouped into a fund structure to give an investor diversification across a portfolio of companies.

An SEIS Venture Capital Fund invests in the earliest stages of a company’s journey by helping founders scale from the beginning. EIS Funds invests in companies that exhibit highly scalable & disruptive models for growth at a slightly more mature stage that SEIS Venture Capital Funds.

One of the major benefits of investing through this sort of fund structure is the ability to delegate investment opportunity sourcing to the venture capital fund meaning the chances of securing high quality deal flow is better than if you were operating on your own. In addition, because investments tend to occur across a portfolio, the risks accompanying selecting only one investment opportunity is reduced.

An example of a UK SEIS/EIS venture capital Fund in the UK is www.britbots.com