Читать книгу How To Become A Business Angel - Richard Hargreaves - Страница 55

There are two main types of funds available to individuals, namely VCTs and EIS funds.

What they have in common is that participants invest in a blind pool managed by professional fund managers and receive significant tax benefits. Both funds are the result of successive governments’ encouragement of entrepreneurial activity via tax advantages.

The diversification of risk that funds offer, coupled with the inevitably high fees charged by managers and promoters, does mean you cannot expect the level of return that angel investment can deliver.

In practice, and it is very sad to say this, many of these funds are thinly disguised tax shelter schemes. These are designed to give investors an investment return through the use of tax reliefs in the safest way that can be squeezed through the legislation – in other words the economy sees little or no benefit. That to me is an abuse – albeit legal – of the tax system and hard to defend morally. It illustrates, though, how much smarter the tax shelter industry is than the public servants who design these schemes.

A minority of these funds – and it is a minority – do back real growth businesses in the full spirit of the legislation.

The key differences between funds and angel investing are that the investor has no say in which companies will be in the portfolio nor how they are helped post-investment. The investor in the fund has to trust the fund manager to do what they have said they will.

Let’s look in more detail at VCTs and EIS funds, taking them in turn.