DIY Investor Magazine
/
March 2016
45
‘THE EQUITY CROWDFUNDING INDUSTRY IS STILL
YOUNG, LEARNING AND CONTINUING TO EVOLVE, SO
THE RECENT ISSUES SHOULD NOT DETER INVESTORS
FROM INVESTIGATING THE POTENTIAL BENEFITS ON
OFFER’
The equity crowdfunding industry is still young, learning
and continuing to evolve, so the recent issues should
not deter investors from investigating the potential
benefits on offer.
As well as the potential for finding the “next big thing”
there are a number of other benefits which can be
gained from investing in start-ups.
Given their risk profile, equity in start-up firms can be
considered to be a separate asset class, thus helping
investors to spread their investments and diversify their
portfolios.
There are intangible benefits too, such as the feeling of
satisfaction of being able to help businesses develop
their ideas, making new contacts and learning more
about investments.
Just in case things turn out badly there are also
significant potential tax benefits on offer on most
equity crowdfunding pitches (subject to individual
circumstances & status).
The Seed Enterprise Investment Scheme (SEIS) and
Enterprise Investment Scheme (EIS), offer respective
50% and 30% income tax relief.
And some significant savings can be made if you are a
buyer of the company’s own products.
For example, Swiss watch brand Czapek and Cie,
which recently raised £682,000 on the Crowd For
Angels and Raizers platforms, offered shareholders a
substantial discount on their limited edition timepieces.
Investors who put in £3,300 or more were able to enjoy
a 40% discount.
So anyone buying the £18,500 white gold edition of the
firm’s Quai des Bergues collection would have saved
themselves £7,400 on the recommended sale price – a
value 2.2 times their initial investment.
