‘Private investment set to drive economic recovery, but the right formula is needed’ maintains Enterprise Investment Scheme Association
In line with the chancellor’s programme to restart the economy, the Enterprise Investment Scheme Association (EISA) is launching an initiative to establish the best basis on which to attract private investors to support the recovery.
The EISA is the membership organisation of the firms involved in managing investments into growth businesses through the tax advantages Seed and Enterprise schemes. It also has the role of lobbying into the government decision makers on the best way to attract in private investors, based on the experience of members and through outreach into the private investor community.
Director General of the EISA, Mark Brownridge said, “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.”
The EISA have today launched a research project seeking to discover where in the business ecosystem the pandemic has created funding gaps and market failure to help understand how those companies can be best supported both now and into the future. The project will give a 360 degree view of the SME funding market and call on the views of start-ups and scaleups, those in the industry, as wells as private investors, to feedback on what changes to the existing schemes, and what other initiatives, would best drive investors to commit their surplus wealth in support of growth businesses and potentially the country’s next ‘unicorn’.
Mark Brownridge added, “We are today launching our research survey 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, SFC Capital, 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 will use the research to launch a campaign plan to present their recommendations to government in time for the November Budget.