Downing Ventures EIS invests across a range of technology sectors: enterprise, deep tech and healthcare.
Your capital is at risk and you may not get back the full amount you invested. EIS investments are long term and high risk. Tax reliefs are subject to change and depend on personal circumstances. If you're unsure about your tax status you should seek advice from a financial adviser. Please read full details of the risks here.
What do I need to know before investing?
Where is my money invested?
We look to support talented entrepreneurs with companies that have a strong management team and are typically at a stage where they have launched a product and are generating revenue.
A crucial part of our strategy is focusing on areas of research and innovation within the UK, such as the ‘golden triangle’ of Oxford, Cambridge and London and the ‘Silicon Gorge’ area of the South West (Bristol and Bath).
We have developed particular expertise in enterprise SaaS (software-as-a-service), healthcare technology and deep tech.
Our aim is to invest your money in a minimum of eight companies. As these companies scale up we can use funding from other products, such as Downing VCTs, to provide follow-up finance to help boost future growth.
Our partners and team members invest their own money alongside yours in every company we support, so your success is our success.
What are the risks?
Investing in an EIS is for the long term, high risk and not suitable for everyone, so we recommend seeking financial advice before investing. As with all investments, the Downing Ventures EIS has risks that you should be aware of and comfortable with before you invest.
- The value of your EIS investment can go up and down so your capital is at risk.
- EIS companies can lose their qualifying status which can affect your tax reliefs.
- EIS tax benefits are not guaranteed, are subject to change and apply only if you hold your shares for a minimum of three years.
- EIS qualifying businesses are at an early stage in their development and are therefore high risk.
- It can be hard to sell your EIS shares so you should be prepared to hold them for four - eight years.
- Your Ventures EIS portfolio will usually consist of a minimum of eight companies so there is relatively limited diversification.
- The past performance of an EIS is not a reliable indicator of future results.
Please note this is only a brief overview of the risks involved with investing in an EIS fund. Please read full details of all the risks here before investing.
What are the charges?
These charges are paid by the EIS companies and can reduce the value of your portfolio. VAT will be charged as applicable. Note, you get tax relief on the full amount you pay into Downing Ventures EIS. These charges are for advised clients. If you are applying directly or are execution-only please refer to the terms & conditions. Applicable from 1 July 2021.
1% This is based on the amount you invest and is an upfront charge to the investor. Annual charge
2% p.a. + VAT The first two years of the annual charge is taken up front from the investor, with any subsequent fees accrued and taken from exit proceeds. This charge is for the costs of managing the Downing Ventures EIS (including custodian and nominee fees, bank charges and reporting to investors). Performance fee 20% + VAT Based on the returns above £1.00 for each £1.00 invested. Payable only when you receive cash proceeds equal to the total you invested in the EIS companies. Arrangement fee up to 3% This is based on the amount available for investment into EIS companies and is charged on completion of an investment to each EIS company.
What happens once I've invested?
When we've received your Ventures EIS application, we’ll send you an acknowledgement letter typically within four business days.
We aim to allot funds to EIS-qualifying companies within 12 months of receiving your money.
We'll send EIS3 share certificates within four to six months of each EIS company investment being made and approved by HMRC. You can use these certificates to claim income tax relief and capital gains tax deferral relief.
Once your funds have been invested, you'll receive half-yearly valuation statements with full details of how each individual EIS company is performing.
When can I exit my EIS investments?
Exit opportunities always depend on the growth of the business and current market conditions.
We aim to give you the opportunity to exit between four and eight years from the date your shares were originally acquired, but there are no guarantees.
It’s important to understand that EIS funds are long-term investments and, for the majority of our portfolio companies, the investment lifetime is likely to be closer to eight years.
Exit opportunities arise mainly when our portfolio companies are acquired by other businesses looking to expand their operations, although some exit through market flotation.