EIS Investment Takes a Dip: UK Tech Needs a Boost
According to the latest figures from HMRC, the cash flowing into the Government’s flagship Enterprise Investment Scheme (EIS) has slumped by 15% – dropping from £2.3 billion to £2 billion in the year ending March 31, 2023.
Why the Numbers Matter
Think of the EIS as the UK’s version of a “money‑magnet” that entices investors to plant capital in young businesses. When that magnet weakens, the whole ecosystem feels the bite. Fewer investors means fewer resources for tech start‑ups and scale‑ups to hit the big leagues.
Ian Zant‑Boer’s Take on the Fix
I’ve hit the gym for the tech sector. – that’s Ian Zant‑Boer, the chief captain at Growthdeck, a private‑equity outfit that pulls money into brands via EIS. He’s been shouting from the rooftops that the next Government should stretch the EIS that far beyond its current limits to keep the UK’s tech scene competitive.
- Open the gates wider. The scheme currently shields companies under seven years old. Ian argues that businesses around eight or ten years old have just as much traction on the horizon. Why let them hit the brakes while they’re still on the fast‑track?
- Raise the ceiling. Right now, investors can drop up to £1 million per deal. That cap hasn’t moved a ton since 2012. With inflation inflating, we ought to bump it to about £1.6 million – giving investors a real bite.
- Keep the momentum. EIS already bridges the “financing gap” that fast‑growing small enterprises often face – the sweet spot between banks and heavyweight PE funds.
Why It Matters
Fast‑moving SMEs are the engines that could drive the UK’s economy back to roaring growth. They translate into more jobs, more tax receipts, and a stronger global posture. The key is making sure they’re not left high‑balling their ambitions because funding is simply out of reach.
Bottom line: If the next government wants to headline the next election with real progress, upgrading the EIS is a must‑do. Ian notes that the scheme has proven itself over 30 years, and if we give more companies a fair shot, the potential upside is enormous.
Stay tuned–our next update will break down how you can get real‑time intel on these shifts.
