Shift towards SEIS
Following the EIS rule changes in the Autumn Statement, VC led, capital preservation EIS opportunities are off the menu. The new mantras are the twin pillars of “Growth and Development” and “Risk to Capital”. Therefore, HMRC’s advance assurance process is seemingly full of jeopardy, particularly for EIS over SEIS, and has never been more difficult to navigate.
This year, more than in the last five, I have seen a marked shift towards SEIS from EIS start-ups seeking funding. Therefore, SEIS funds are back on the rise https://www.iexpats.com/the-likely-performance-of-a-seis-portfolio/ and VCs promoting Growth Funds are reworking around Tech. Just prefix with Fin, Med, Health, Legal, Insurance to build your new segment. And a resourceful, motivated, entrepreneur armed with £150,000 of SEIS funding can build a digital platform. Just look at MyDateNight.
The rise of the digital platform
The rise of the digital platform in the economy is one of the most obvious phenomena of the current digital revolution. SEIS funded apps and responsive websites are the gateway to a smartphone driven mass of conveniently packaged micro-lifestyle choices. And even the NHS is in on the act with its excellent “Echo” App for managing repeat prescriptions.
You only have to look at the carnage being wrought in the retail shopping sector. As the bricks and mortar model of high street staples (House of Fraser, BHS) succumb to nimble, online businesses like ASOS, you can see the power of national coverage, low overheads and convenience.
Social networking is another segment that has boomed since Friends Reunited entered the market. With facebook, Instagram and Twitter focussed on broadcasting out, a quiet space for discrete, common interest based networks is blossoming. For instance, Mumsnet is a superb example of a content rich network, supporting its membership.
Sadly for investors, the opportunity to invest in a snapchat, Instagram or whatsapp are few and far between.
Alumnet takes over where Friends Reunited never reached. Providing a closed network built on secondary schools and the alumni clubs and societies many of us wish were more active. On November the 25th I will attend a third alumni pitch event organised by the alumni, for the alumni.