Blick Rothenberg: Online Equity Investing Platforms Help for StartUps

Blick Rothenberg: Online Equity Investing Platforms Help for StartUps
19.07.2016 02:21 pm

Blick Rothenberg: Online Equity Investing Platforms Help for StartUps

FinTech StartUps , IT Innovations

Online equity investing platforms are proving to be a powerful tool for start-ups to raise finance from the public as well as a tax-efficient option for investors, say London Chartered Accountants Blick Rothenberg LLP. 
 
Robert Pullen, Senior Manager at Blick Rothenberg, said: “The Government has continuously encouraged investment in start-up companies, with generous tax reliefs available providing certain conditions are met. The difficulty has historically been in connecting willing investors with eligible companies but the rise of online crowdfunding is now starting to fill that gap at the click of a button.” 
 
He explained: “Where the conditions are met, investors can receive upfront 30% income tax relief for the amount invested in a subscription of shares into an Enterprise Investment Scheme (EIS) company, or 50% for a subscription of shares into a Seed EIS (SEIS) company. In addition to the upfront income tax relief, individuals can shelter capital gains they have made on other assets.
 
“Not only that, but any gain made on a later disposal of the EIS or SEIS shares themselves are exempt from capital gains tax providing those shares have been held for at least 3 years. Together with inheritance tax relief, the EIS and SEIS tax breaks are very attractive.”
 
He added: “Potential investors can now view business proposals through an online platform and choose the amount they would like to invest, generally in return for ordinary voting shares.” 
 
Where the conditions for EIS and SEIS are met, the platform often takes care of the legal and tax paperwork in applying to HM Revenue and Customs (‘HMRC’) for the necessary authorisation. Providing HMRC agree the conditions are met, a certificate is issued, which the investor can then use to claim the tax relief.
 
Robert said: “This is a powerful new way for start-ups to raise finance from the public, without having to go through a bank or other financial institution. It allows flexibility to set the funding level required and the amount of equity given away – a virtual ‘Dragon’s Den’.
 
“It is another example of how crowdfunding is changing the way businesses raise funding, with much more emphasis on e-pitches and social marketing.”

Related News

Barclays Accelerator powered by Techstars

The... Read more »

Zortrex launches Zortrex Token Vault

Edinburgh-based Zortrex, a disruptive data security start-up, has launched Zortrex Token Vault. Designed to help organisations reduce the cost and complexity of protecting... Read more »

London Blockchain Firms Raise over $500 Million in Equity Funding since 2013

Analysis of global startup hubs by Outlier Ventures, as part of London Blockchain Week has revealed that London may be one of the most preferred hubs for blockchain start-... Read more »

Bitfinex & Tether CTO to reveal "The Story of Tether” during an industry-first keynote at the CryptoCompare Digital Asset Summi

Tether has fuelled the growth of digital assets since it was founded in 2014 and today accounts for over 75% of all Bitcoin trading volume. At London’s ... Read more »

B-Social announces new funding round of £7.8 million

London fintech B-Social has completed a Seed 2 funding round of £7.8 million as it continues its push to become a fully-licensed bank.

Nazim Valimahomed... Read more »

Rabo Frontier Ventures Commits to Speedinvest 3

Rabo Frontier Ventures (“RFV") has committed to Speedinvest’s new fund (Si3). With its latest fund Speedinvest aims to build a portfolio of 80 to 100 investments in European... Read more »

Magazine
ALL
Free Newsletter Sign-up
+44 (0) 208 819 32 53 +44 (0) 173 261 71 47
Download Our Mobile App
Financial It Youtube channel