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Downing Ventures EIS

We believe early-stage UK technology companies can offer great investment opportunities. Although high risk, they aim to provide access to high potential returns and attractive Enterprise Investment Scheme (EIS) tax reliefs. 

Introduction

Introduction

The Downing Ventures EIS invests in early-stage UK technology companies that we believe can provide you with attractive potential returns and access to EIS tax reliefs. We seek to invest £500,000 - £1 million in each company, often used to get product traction.

To mitigate risk, we aim to spread your investment across a portfolio of 10 – 15 companies, where possible in a variety of sectors (although this isn’t guaranteed).

Key points

  • Due diligence: in 2017, our team reviewed around 100 companies a month, yet only invested in a small number. Our due diligence process is rigorous, using sector specialists to undertake customer, tech, product, market and financial reviews for investments.  
  • Follow-on funding: we participate in follow-on rounds in the existing portfolio, often alongside Downing-managed VCTs.
  • Target exit: it is anticipated that you will be given the opportunity to exit your investments between four and eight years from subscription. You should not invest if you think you would require access to your funds within this period.

Early-stage technology investments

What types of companies do we support?

We look to support talented entrepreneurs with companies that are typically at a stage where they have launched a product, are generating revenue and have a strong management team.

  • Enterprise SaaS (Software-as-a-Service): enterprise SaaS is used to satisfy the needs of a business, rather than an individual, on a subscription basis and hosted in the cloud. We are particularly interested in innovative marketing and big data technologies.
  • Large consumer markets: we prefer companies that have an angle for customer acquisition and retention as capturing consumers online is expensive.
  • Healthcare technology: this growing sector in the UK has a lack of specialist investors, presenting an opportunity to invest at attractive valuations. We prefer opportunities with a short route to exit, such as devices and software. This sector currently makes up less than 15% of the Downing Ventures portfolio.
  • Special situations technology: some markets are only beginning to feel the effects of technological disruption, such as education, insurance, security and banking. We believe there is value to be unlocked here if the companies are led by experienced management teams.

Subscription amount

Minimum subscription: £15,000 Maximum subscription: no maximum

Method of payment for application

Payments for applications can be made by cheque, made payable to:

Thompson Taraz Downing re: Ventures, or by electronic bank transfer using the payment details below.

Sort Code:
16-01-09

How to apply

Please first read the Brochure and Terms and Conditions before completing an application form. Please note that we can only accept applications that are submitted through an FCA authorised intermediary.

 

Key risks

Investors' capital is at risk. Set out below are the key risks involved with an investment through the Service. Please see the Memorandum for a full list of the risk factors. EIS investments are high risk. It’s important you know what these risks are so you can make an informed decision.

  • Capital is at risk: the value of investments and the income derived from them may go down as well as up and investors may not get back the full amount invested.
     
  • Investments made through Downing Ventures EIS are long term and high risk: you should not consider investing if you think you could require access to your funds within approximately four to eight years from the date shares are originally acquired. Please remember, investments made through our EIS will be in early-stage companies that are higher risk than those listed on the London Stock Exchange. The chances of companies failing are high.
     
  • Tax reliefs are not guaranteed: the rates of tax, tax benefits and allowances that are described in this Investor Guide are based on current legislation and HMRC practice - these may change from time to time and as such, they are not guaranteed and are subject to personal circumstances.
     
  • Qualifying investments are not guaranteed: there is no guarantee that sufficient investments in EIS companies will be made within the expected timetable, or at all. In addition, it is possible that the EIS companies may subsequently cease to qualify for EIS tax reliefs, in which case, the tax reliefs you receive could be delayed or lost.
     
  • Gearing: although most of our Ventures EIS investments have little or no leverage, debt (or any other prior-ranking securities) used by qualifying companies will significantly increase risk.
  • Investments made through Downing Ventures EIS are long term and high risk: you should not consider investing if you think you could require access to your funds within approximately four to eight years from the date shares are originally acquired. Please remember, investments made through our EIS will be in early-stage companies that are much smaller, unquoted technology companies that are higher risk than those listed on the London Stock Exchange. The chances of companies failing are high.
     
  • Diversification: this may not be achieved and investments may be in the same sector.
     
  • You cannot rely on past performance: please remember that past performance is not a reliable guide to future performance and there is no guarantee the service’s objectives will be achieved.
     
  • Debt used by qualifying companies will increase risk: The level of debt (or any other prior ranking securities) used by Qualifying Companies will significantly increase risk.

Important Notice

Investing in our products will place your capital at risk and you may not get back the full amount invested. Any tax treatment may be subject to change and the availability and value of the reliefs depend on the individual circumstances of each investor. The availability of tax reliefs also depends on the investee companies maintaining their qualifying status.

Further information can be found at HMRC’s website. Neither past performance or forecasts are reliable indicators of future results and should not be relied upon. Unquoted or smaller company shares are likely to have higher price fluctuations and are likely to be more difficult to sell than shares quoted on the London Stock Exchange Official List. Website content is not intended to constitute investment, tax or legal advice. We recommend you seek independent advice before investing in any of our products.

Important Notice

Downing’s investments place your capital at risk and you may not get back the full amount invested. Past performance and forecasts are not a reliable guide to future results. Tax treatment may be subject to change and depends on individual circumstances. Smaller company shares are likely to have higher volatility and liquidity risks than other types of main market listed instruments. We recommend that you seek professional independent financial advice before investing. We do not offer investment or tax advice.

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