Originally written by Lawrence Gosling on Small Business
Checking the track records of a Seed EIS investment manager for professional advisers, investors or companies looking for funding can be very difficult because of the lack of independent data.
Although there are a number of research groups analysing the managers, they all tend to look at different elements of the groups and no-one tracks the actual investment returns.
So if a professional adviser or investor are doing their own research what should they be looking for?
Matthew Cushen, one of the founders of Worth Capital, acknowledges the challenge, particularly if the adviser is just looking for the number of companies the investment manager has successfully exited.
He says: “SEIS is much younger than EIS, which has been around for over 25 years and a number of groups can point to realised returns from exit, either with or without including tax breaks. Seed EIS is less than decade old, and by their nature many of the businesses we invest in are younger and are sometimes pre-revenue.
“At Worth we source investee companies through our Start-up Series where we offer successful companies up to £250,000 in the form of an equity injection, and these companies are at all stages