“No amount of initial research can substitute working closely with a company for 12-18 months.”
If start-up companies have a higher potential to fail, it follows that successful ventures investing in EIS schemes is dependent on finding winning companies with big ideas and backing them through their early growth stages.
Many EIS managers, motivated more by access to tax reliefs than risk-based investing for successful outcomes, invest as fast as possible, making single larger investments into each company they back.
At Oxford capital, we follow a different approach. Rather than making a large investment into newly identified opportunities right at start up stage, we invest only very small amounts of clients’ money in unproven companies. We will increase the investment only after achievement of specific growth targets. So we only take more significant risk with clients’ funds once companies have provided real or measurable proof of concept and actual earnings growth.
In effect, after our intensive research for identifying companies for small initial investments, we can then conduct much longer monitoring and continued due diligence as an investor at the table. No amount of initial research can substitute working closely with a company for 12-18 months.
For your clients, whenever they invest, their money will be invested across the spectrum – small holdings in earlier stage companies, larger holdings in proven companies.
This a key diversifier of risk in ventures investing.
Find out more in our guide to EIS.
