OT(S)EIS is a technology fund that seeks to make full use of the tax advantages offered by the SEIS and EIS investment schemes. The Start-up Fund makes SEIS investments in high risk, high reward science start-ups, usually within an hour of Oxford.
The investments are local to Oxford so that we can have frequent informal meetings with the management. Our team attend key meetings and help solve problems so we get to know the businesses very well. This allows us to decide whether to offer follow-on investment as the business develops, and at what share price.
The fund is open for investment at any point during the tax year. Please click here for the Information Memorandum and Application Form.
For information on all of our portfolio companies and the progress of the fund, please see our Latest Quarterly Report.
"I have been thoroughly impressed with the portfolio of investments you have created for me. As well as showing some extremely positive early successes, these investments are also well distributed and in technologies that I would not normally be able to access." - Current Investor in The Start-up Fund.
We have been investing in science start-ups for more than 30 years, so have deep experience in this specialist activity. The Start-up Fund is our twelfth fund. The first investment from The Start-up Fund was in 2012.
The SEIS scheme has transformed the economics of this business. The tax relief at the start is 50%. There are further tax reliefs should the business fail. Depending on the tax circumstances of the investor, this can reduce the losses on a failure to as little as 12.5% of the original investment. Any gains on the winners are tax free.
All the investments we make are outside Inheritance Tax from 2 years after we invest your money into a start-up company. Investment in The Start-up Fund provides a good means of passing wealth on to your heirs in long-term assets which cannot be sold immediately.
The fund is open for investment at any time, with a minimum investment of £15,000. The maximum investment is £320,000, therefore investors wishing to invest more should also consider OTEIS - The Development Fund.
The Start-up Fund invests the capital provided by any investor over three years as follows:
- In year 1, a third of the investment (less fees) is invested in 5-10 SEIS investments in science start-ups.
- In year 2, a third of the funds (less fees) is invested as EIS follow-on investments in companies which are showing promise. Year 3 is the same as year 2.
We hope this will result in a good return in the end. Having the ability to make a follow-on investment as a start-up develops is very important. Experience shows that investors who are not able to do this often fare badly.
SEIS Tax Reliefs
The disadvantage of The Start-up Fund is that it takes up to four years for investors to receive all their tax relief. Tax reliefs typically arrive 6-9 months after an investment, because the investee company has to meet certain criteria before applying to HMRC for the necessary forms. For investors who need all their investments made within this tax year, we recommend OTEIS - The Development Fund.
Previous Quarterly Reports: