Industry first as SEIS fund for gambling sector announced
GamCrowd 2015 SEIS fund plans to raise £1.5m to invest in UK gambling start-ups and early-stage companies
A specialist Seed Enterprise Investment Scheme (SEIS) fund dedicated to helping businesses in the gambling sector has been announced today; said to mark a first for the industry.
A joint venture between FCA-authorised fund management firm Innvotec Limited and gambling crowdfunding site GamCrowd, the GamCrowd 2015 SEIS Fund will aim to support UK start-ups and early-stage gambling businesses looking to scale; with particular interest on companies that cross-over gambling and gaming.
The minimum subscription for the fund is set at £250,000 with the intention to raise up to £1.5m to invest in the gambling space – investors and applicable parties must commit a minimum of £5,000.
From an investor perspective, the fund is targeted at investors who have an interest in the gambling sector but either feel they do not have “sufficient knowledge or time” to invest directly.
The Fund marks a new development for SEIS; the government-backed initiative which offers substantial tax reliefs to individual investors who purchase shares in new companies.
The tax benefits in SEIS look to mitigate against the higher risks that are typically associated with investing in start-ups because if the start-up fails, investors who are higher rate tax payers can claim a minimum of 72.5% of their investment back from HM Revenue & Customs. If the business succeeds investors don’t pay Capital Gains Tax on any profits made.
With gambling now a multi-billion pound industry, Innvotec and GamCrowd are confident that the introduction of an SEIS fund will help fuel growth of innovative start-ups n the space as GamCrowd’s North explained:
“SEIS is one of the most advantageous tax schemes available to investors anywhere in Western Europe.
“Because of the UK government’s generosity and enthusiasm to funnel tax payers’ money towards UK start-ups, many specialist funds have been started. But, until now, none has existed in gambling, despite it being a huge industry.
“The gambling industry has a history of creating scalable, high growth companies which are highly cash generative and not capital intensive. However, the sector is often avoided and under-invested in by traditional institutions. GamCrowd and Innvotec is a powerful combination and it is this opportunity which the Fund seeks to harness.”