Startup Equity Anticipates Brexit Boost

Office workers in a busy city street

Equity crowdunding investors greeted Article 50 robust warm optimism and suggestions from some in the sector that the UK's departure from the EU could spur on greater use of the Enterprise Investment Schemes (EIS / SEIS) and stronger support government support for startups and high-growth firms.

Speaking to Fund Strategy magazine, Luke Davis of IW Capital suggested that it was difficult to predict  the impact of the Article 50 negotiations on the UK's economic landscape over the next two years, but he sees the UK as a 'forward-facing entity' with a government that will be keen to repeal retrictive laws and improve support to British businesses.

This statement is worth weighing carefuly:

"For investors, the imposition of EU state aid directives from 2015 onwards has had a noticeable impact on the UK’s leading tax-efficient investment schemes – VCT, EIS and SEIS. To comply with European regulation, the UK has been forced to limit the eligibility of companies able to raise growth capital through these initiatives, particularly EIS. For a scheme that traditionally catered to the growth finance demands of SMEs across all stages of the business cycle, state aid regulations have redirected the flow of capital into earlier stage businesses by forcing the UK to exclude companies over seven years old from qualifying for EIS investment."

There are many points to ponder there, and we imagine our readers will respond to some of Mr Davis' ideas more than others.

One equity platform that's optimistic about the EIS and SEIS schemes is Seedrs. The Mail on Sunday reported  a spokesman for Seedrs saying "We expect SEIS and EIS to be sticking around, especially with the Government striving to maintain interest in British businesses post-Brexit."

Investors will welcome that news, and there are plenty of entrepreneurs waiting to welcome them, them if is accurate. The site reports an analysis of Companies House data by a firm called RSM which shows "the number of tech start-ups in the UK has more than doubled since the Brexit referendum."