Seed scheme could triple angel investing for NI start-ups – Halo

5 Apr 2012

(From left): Alan Watts, director, Halo Northern Ireland; Fergal McCann, chairman, Chartered Accountants Ulster Society; Nelson Gray, former European business angel of the year; and Des Ryan, technical adviser, Venture Capital Schemes, HMRC London

Northern Ireland’s new Seed Enterprise Investment Scheme (EIS) could potentially more than triple business angel investment levels in start-ups in the region, particularly in the knowledge space, according to Halo Northern Ireland.

The scheme, which comes into force in Northern Ireland this month, will offer individual investors 50pc up-front tax relief as well as the ability to roll capital gains into the Seed EIS for the first year.

Alan Watts, director, Halo NI, himself a former entrepreneur and business angel, told delegates at a business briefing this morning in the North that the new Seed EIS offers tax incentives which could potentially reach stg£18m per year in investments for local start-ups.

Watts spoke about how the scheme will be particularly suited to knowledge-economy companies who typically need less capital investment compared to conventional start-ups.

“Given the increasing focus on this sector in Northern Ireland, local tech start-ups can expect to see increasing interest from angel investors in the months ahead as the details of the scheme become better known,” he said.

Start-ups in the knowledge space

Des Ryan, technical adviser at Venture Capital Schemes, HMRC London, and Nelson Gray, former European business angel of the year, also spoke at this morning’s event.

Gray gave an example of how, in the past, you could measure innovative exporting companies by the number of pallets being loaded onto lorries, and the difference between then and now.

“Today’s knowledge economy companies work very differently and their products more often leave on fibre-optic cables. Instead of having to buy expensive capital equipment, they work on a ‘pay as you go’ basically paying for only as much as they need from online and cloud-based services,” he said.  

He said this type of process gives these companies the ability to achieve far more with less initial capital, which ties in well with the Seed EIS.

Fergal McCann, chairman, Chartered Accountants Ulster Branch, said its members will be expected to assist their clients both with the mechanics of the Seed EIS and with explaining angel investing in order to increase such investments in local start-ups.

Carmel Doyle was a long-time reporter with Silicon Republic