Commenting, James Codling and Paul Moravek, Co-Founders of VentureFounders, said:
“As one of the top four entrepreneurial countries in the world*, George Osborne needs to show commitment to maintaining Government support to UK businesses and entrepreneurs. We think there are two ways in which he can encourage high net worth individuals to invest in entrepreneurial UK businesses through the existing SEIS and EIS schemes.
“Firstly, we call on him to increase the amount that can be raised by companies under SEIS from £150,000 to £250,000 to give these early stage businesses the capital they need to achieve their growth potential. This will ensure that more money is being invested in fledgling businesses, and that investors are rewarded with tax efficient ways of making investments in UK plc.
“Second, and equally as important, is being able to raise sufficient equity capital at the outset of a new venture in order to enable these entrepreneurial businesses to grow without constraint. We firmly believe that businesses should be able to raise capital concurrently using both the SEIS and EIS schemes. Under the current rules, a company can only issue new shares and bring in more capital once it has spent 70% of its SEIS money. Raising investment takes a considerable amount of time and effort; management is best served running the business rather than continually meeting investors and fundraising.
“Entrepreneurial businesses are the catalyst for economic growth and a great number of new jobs are created by businesses under five years old. The recommended changes in these allowances in next week’s Budget would send out a positive message to would-be investors and entrepreneurs that this Government backs entrepreneurship, jobs, and wealth creation for the benefit of all.”
*The Global Entrepreneurship Index (GEI) profiles and benchmarks the entrepreneurial ecosystems of 130 countries. Now in its fifth year, the index found that the top-performing entrepreneurial ecosystems in the world are the four largest English-speaking countries: the US, Canada, Australia and the UK, followed by three Scandinavian nations - Sweden, Denmark and Iceland (Dec 2014).