InvestingZone is a web-based platform for buying shares in early stage, unlisted companies – often known as equity crowdfunding. Through InvestingZone you can invest in some of the UK’s best start ups, expansion companies and SME’s. You can also benefit from generous SEIS and EIS tax incentives. It’s an economical way to invest in great new ideas and technology at a low price.
An equity fundraising is when a company sells shares in its business in return for cash. The investor becomes the shareholder in the company with all the legal rights associated with buying shares in a private company.
Previously shares in private companies were only really available to wealthy "angel" investors or venture capitalists. Equity crowdfunding through InvestingZone changes all this and allows anyone (provided they can demonstrate that they understand the risks involved) to invest as little as £100 in unlisted companies, alongside experienced and professional investors on just the same terms.
In legal terms, buying such shares in a startup company is very similar to buying shares in any private company. You become a shareholder in that company and in the case of InvestingZone, you enjoy the right to receive dividends, the right to make followon investments and the right to vote. You also get the opportunity to have direct dialogue with the founders before deciding to make an investment.To buy shares in a listed company on the stock market you would normally need to go through a stockbroker. InvestingZone acts in a similar way to a broker, facilitating the deal but without you having to pay any fees.
This booklet provides some basic information to help you on your journey to making investments through InvestingZone.
This booklet provides basic information about raising equity funding on InvestingZone.
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The Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS) are two tax reliefs created by the UK Government to encourage private investment in early stage companies. Both schemes are extremely generous but have previously tended to be available only to traditional business angels with large sums to invest. InvestingZone makes them accessible to a new breed of private investor.
Take EIS as an example. Depending on your personal tax circumstances, if you invest in an eligible company, the cost of your investment is immediately reduced by 30%. Furthermore, if the company fails, then your losses can be set against your income tax bill for the year. These reliefs mean that the capital which is actually at risk is dramatically reduced.
On the reward side, if the company goes on to be successful, and as long as it remains EIS eligible, any gain on disposal of your investment will be tax free (provided you have held the shares for the minimum period of 3 years) – meaning your effective rewards are increased.
The effects of the SEIS reliefs on the risk/reward balance are even more pronounced, with eligible investors receiving a rebate of 50% of their investments.