--- title: Save British Startups – Fix EIS and SEIS | SFC Capital description: Britain’s seed funding market has inched into the realm of jeopardy. There is no other way to look at it. While later-stage markets flourished in 2021, dou image: https://sfccapital.com/hubfs/Imported_Blog_Media/banner_1657551169.webp --- Disclaimer Please note, company introductions through SFC Capital Ltd ('SFC') are only suitable for ‘High Net Worth Individuals’, or ‘Sophisticated Investors’ as defined by the Financial Services & Markets Act 2000 (FSMA) who are familiar with and willing to accept the high risk associated with private investments. Any investor requesting to contact a company through SFC Capital does so at his/her own risk and is solely responsible for conducting any legal, accounting or due diligence review. There has been no investigation to the accuracy of any information or terms contained herein and we strongly suggest that you seek advice from a person authorised under the FSMA who specialises in advising on investments of this kind prior to commencement of any potential transaction. All content provided by SFC Capital is strictly for informational purpose only and does not constitute business, financial, investment, hedging, trading, legal, regulatory, tax or accounting advice or services. SFC Capital is an appointed representative of SFC Capital Partners Ltd which is authorised and regulated by the Financial Conduct Authority (‘FCA’) in the United Kingdom (FRN 736284). This website is intended for professional investors only; any reproduction of this information, in whole, or part, is prohibited. SFC Capital does not sell or offer to sell any securities and no information provided by SFC Capital is intended to constitute or to be interpreted as any such offer. SFC Capital simply provides an introductory service where potential partners of all sorts can meet. The SFC Angel Fund is managed by SFC Capital Partners Ltd (‘SFCCP’) which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, firm reference number 736284. Information on the Fund is intended for professional investors only; any reproduction of this information, in whole, or part, is prohibited. The content is for information purposes only and should not be used or considered as an offer or solicitation to purchase or sell the securities mentioned herein. The SFC Angel Fund (the ‘SFC Fund’ or the ‘Fund’) is defined as an ‘unregulated collective investment scheme’ (‘UCIS’) and the promotion of a UCIS either within the UK or from the UK is severely restricted by statute. Consequently, this document is only directed at professional clients and eligible counterparties as defined by the FCA and also to persons of a kind to whom the Fund may lawfully be promoted by an authorised person by virtue of Section 238(5) of the Financial Services and Markets Act 2000 and COBS 4.12.4R. Any decision by an investor to buy shares in a fund must be made solely on the basis of the information and terms contained within the Fund’s offering memorandum. Investment in the Fund is made entirely at the investor’s own risk and professional advice should be sought in case of doubt. SFC Capital Partners Ltd (‘SFC’) is authorised and regulated by the Financial Conduct Authority (‘FCA’) in the United Kingdom, firm reference number 736284. This document is intended for professional investors only; any reproduction of this information, in whole, or part, is prohibited. The content is for information purposes only and should not be used or considered as an offer or solicitation to purchase or sell the securities mentioned herein. The SFC Angel Fund (the ‘SFC Fund’ or the ‘Fund’) is defined as an ‘unregulated collective investment scheme’ (‘UCIS’) and the promotion of a UCIS either within the UK or from the UK is severely restricted by statute. Consequently, this document is only directed at professional clients and eligible counterparties as defined by the FCA and also to persons of a kind to whom the Fund may lawfully be promoted by an authorised person by virtue of Section 238(5) of the Financial Services and Markets Act 2000 and COBS 4.12.4R. The SFC Angel Fund is managed by SFC Capital Partners Ltd (‘SFCCP’) which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, firm reference number 736284. Information on the Fund is intended for professional investors only; any reproduction of this information, in whole, or part, is prohibited. The content is for information purposes only and should not be used or considered as an offer or solicitation to purchase or sell the securities mentioned herein. The SFC Angel Fund (the ‘SFC Fund’ or the ‘Fund’) is defined as an ‘unregulated collective investment scheme’ (‘UCIS’) and the promotion of a UCIS either within the UK or from the UK is severely restricted by statute. Consequently, this document is only directed at professional clients and eligible counterparties as defined by the FCA and also to persons of a kind to whom the Fund may lawfully be promoted by an authorised person by virtue of Section 238(5) of the Financial Services and Markets Act 2000 and COBS 4.12.4R. Any decision by an investor to buy shares in a fund must be made solely on the basis of the information and terms contained within the Fund’s offering memorandum. Investment in the Fund is made entirely at the investor’s own risk and professional advice should be sought in case of doubt. The SFC Angel Fund is an SEIS/EIS fund which raises money for early-stage businesses by investing in SEIS and EIS eligible ventures with the aim of returning a profit for investors in the fund. Investment in early-stage companies involves risks such as illiquidity, lack of dividends, loss of investment and dilution. Investment in SEIS/EIS funds should be considered as part of a diversified portfolio. The availability of tax relief depends on individual circumstances and may change in the future. The availability of tax relief depends on the company invested in maintaining its SEIS/EIS qualifying status. There is no assurance that the investment objectives of any investment product will be achieved or that the strategies and methods described herein will be successful. Past performance is not necessarily a guide to future performance and the value of an investment may go down as well as up. Investors may not get back the full amount invested. No warranties or representations of any kind are expressed or implied on this website. I Accept The Terms ## FCA Mandatory Risk Warning & Risk Summary > ## Risk Warning > > **Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment, and you are unlikely to be protected if something goes wrong.** ## Risk Summary **Estimated reading time: 2 min** Due to the potential for losses, the Financial Conduct Authority (“FCA”) considers this investment to be high risk.   What are the key risks? 1\. You could lose all the money you invest. Investments made by the SFC Angel Fund SEIS (the “Fund”) will be in shares in early-stage businesses. Investors in these shares often lose 100% of the money they invested, as many early-stage businesses fail. 2\. You are unlikely to be protected if something goes wrong Protection from the Financial Services Compensation Scheme (FSCS), in relation to claims against failed regulated firms, does not cover poor investment performance. Try the FSCS investment protection checker here: [https://www.fscs.org.uk/check/investment-protection-checker/](https://sfccapital.com/fca-mandatory-risk-warning-and-risk-summary/%20https://www.fscs.org.uk/check/investment-protection-checker/)    Protection from the Financial Ombudsman Service (FOS) does not cover poor investment performance. If you have a complaint against an FCA-regulated firm, FOS may be able to consider it. Learn more about FOS protection here: [https://www.financial-ombudsman.org.uk/consumers](https://www.financial-ombudsman.org.uk/consumers) 3\. You won’t get your money back quickly Even if the businesses the Fund invests your money in are successful, it may take several years to get your money back. The most likely way to get your money back is if the businesses invested in by the Fund are bought by another business or list their shares on an exchange such as the London Stock Exchange. These events are not common. 4\. Don’t put all your eggs in one basket Putting all your money into a single business or type of investment for example, is risky. Spreading your money across different investments makes you less dependent on any one to do well.  A good rule of thumb is not to invest more than 10% of your money in high-risk investments.  [https://www.fca.org.uk/investsmart/5-questions-ask-you-invest](https://www.fca.org.uk/investsmart/5-questions-ask-you-invest) 5\. The value of your investment can be reduced The percentage of each investee company that the Fund owns will decrease if the business issues more shares. This could mean that the value of your investment in each investee company reduces, depending on how much the business grows. Most start-up businesses issue multiple rounds of shares.  These new shares could have additional rights that your shares don’t have, such as the right to receive a fixed dividend, which could further reduce your chances of getting a return on your investment. 6\. S/EIS tax reliefs are not guaranteed Whilst it is the Fund's intention to invest mostly in companies qualifying under SEIS legislation, SFC cannot guarantee that all investments will qualify for S/EIS relief (or IHT relief) or, indeed, if they do initially, that they will continue to do so throughout the life of the investment. The tax advantages of investing through the Fund are therefore not guaranteed.  If you are interested in learning more about how to protect yourself, visit the FCA’s website here: [https://www.fca.org.uk/investsmart](https://www.fca.org.uk/investsmart)  Close Don’t invest unless you’re prepared to lose all the money you invest. This is a high risk investment and you are unlikely to be protected if something goes wrong. Take 2 minutes to learn more. [![SFC Logo + Title x web](https://sfccapital.com/hs-fs/hubfs/SFC%20Logo%20+%20Title%20x%20web.png?width=2000&name=SFC%20Logo%20+%20Title%20x%20web.png)](https://sfccapital.com) - [Startups](https://sfccapital.com/raise) - Investors - [SEIS Fund](https://sfccapital.com/seis-funds) - [EIS Fund](https://sfccapital.com/eis-funds) - [SEIS Explained](https://sfccapital.com/seis-explained) - [EIS Explained](https://sfccapital.com/eis-explained) - [Angel House](https://sfccapital.com/angel-house) - [Advisors](https://sfccapital.com/advisors) - [Portfolio](https://portal.sfccapital.com/portfolio) - [About Us](https://sfccapital.com/about-us) - [Blog](https://sfccapital.com/blog) - [Login](https://portal.sfccapital.com/login) # Save British Startups – Fix EIS and SEIS [Ed Prior, Head of Investor Relations](https://sfccapital.com/blog/author/ed-prior-head-of-investor-relations) With experience in politics and business strategy, now leads Investor Services at SFC, focusing on Investor Relations, Fundraising, and managing the Angel House. 13 Jul 2022 [News](https://sfccapital.com/blog/tag/news) ##### Share on - - - #### Britain’s seed funding market is at risk – rethinking EIS and SEIS could be critical to the future success of the venture ecosystem Britain’s seed funding market has inched into the realm of jeopardy. There is no other way to look at it. While later-stage markets flourished in 2021, doubling the number of investment deals worth more than £1m, the seed stages continued the worrying trend of recent years by plateauing on figures over the same period.  Change is needed. Renewed energy is necessary. And a better understanding of the support that’s required from the government is critical to the future success of Britain’s entire venture ecosystem.  Our innovation funnel is being squeezed and, before long, our place as leaders in global innovation will be lost.  It’s a stark warning of a potentially bleak picture, yes. It is also why our recent panel discussion on the future of seed funding came at such a prescient time.  The discussion quickly turned to debate, and what was intended as a panel-only event quickly evolved into a hive of ideas from the audience too. The energy was palpable and the desire from all attendees to catalyse our potential, undeniable. It was fantastic. Thank you to all those who attended.  The event, moderated by Tech Funding News founder and Editor In Chief [Akansha Dimri,](https://www.linkedin.com/in/akanshasdimri/) was led by a panel of experts in the seed funding market:  - [Christiana Stewart-Lockhart](https://eisa.org.uk/board-members/), Director General of the Enterprise Investment Scheme Association (EISA) and member of the Advisory Board for the All Party Parliamentary Group for Entrepreneurship. - [Howard Leigh, Lord Hurley](https://members.parliament.uk/member/4295/contact), Vice Chair of the APPG for Entrepreneurship and member of the House of Lords. - [Julianne Flesher](https://www.linkedin.com/in/julianne-flesher-12513b6a/), Co-Founder and CEO of SFC portfolio company Nossa Data, a software provider that allows companies to manage and communicate their ESG performance to investors, regulators, rating agencies and for internal ESG decision-making. - [Stephen Page](https://www.linkedin.com/in/stephenroypage/), exited entrepreneur and CEO and founder of SFC Capital. He is also a founding member of the Company of Entrepreneurs and is an advisor to and sits on the Boards of several businesses At the centre of the debate was the role of the Seed Enterprise Investment Scheme (SEIS) and the Enterprise Investment Scheme (EIS). For decades, these schemes have been critical drivers of Britain’s world-leading startup ecosystem and have built resilience into our small business economy.  More than 30,000 startups have received investment under EIS, and the creation of SEIS in 2012 levelled the playing field for founders from different socio-economic backgrounds by lowering the barriers to seed capital. This would not have happened without the schemes.   SEIS and EIS can, and should, still be key parts of a thriving UK startup ecosystem. But they have become outdated and unable to fulfil their potential. Reform is needed urgently to release the growing pressure on Britain’s early-stage markets and catalyse our innovation funnel once more.  The £150,000 funding cap applied to businesses under SEIS was designed in 2012, when that amount would generally provide enough runway for a new startup to launch and sustain itself for about a year. In 2022, however, £150,000 lasts no more than a few months.  By limiting funding in this way, startups are unable to navigate the hugely uncertain and competitive fledgling stages. They are unable to compete as effectively in the global market and many are simply left behind at the starting posts.  The SEIS, which for so long has been the source of incredible innovation for this country, no longer fulfils its original commitment to startups. SFC are calling for the Government to immediately change the rules for SEIS by doubling the funding cap to £300,000.  We need this action to reinvigorate our pre-seed and seed stage ecosystem and enable British startups to reassert our dominance on the world stage. This was a view shared by every member of the audience during an on-the-spot poll conducted at our event and should send a clear message to the Government that urgent action is required.  The sunset clause placed on EIS means that the scheme must officially be renewed by April 2025 or else cease to exist.  The impact of that deadline is already being felt however, with investors shying away from making EIS commitments because there is no guarantee that an investment made today will still qualify under the scheme after April 2025.  The impact this has on investor confidence, especially at the riskier seed stages, is enormous. The flow of capital is being restricted and Britain’s innovation funnel squeezed.  Fixing this problem should be very easy for the Government. The sunset clause put on EIS was mandated by the European Union when Britain was a member. Now no longer part of the EU, the UK can, and must, remove this deadline entirely and secure the permanency of EIS. The success of ‘Global Britain’ is dependent on it.  Following the event, SFC launched a petition calling on the Government to make these changes. With hundreds of signatures already, its support is clear and momentum is building. A clear message must be sent that action needs to be taken, immediately. You can sign the petition [here](https://you.38degrees.org.uk/petitions/save-british-startups-fixing-eis-and-seis). ## Related Articles 9 Feb 2023 [Investors](https://sfccapital.com/blog/tag/investors) ##### [Welcome to SEIS 2.0](https://sfccapital.com/blog/welcome-to-seis-2-0) A new dawn for Britain’s early-stage investing market and an awakening to the power of SEIS funds Li... [Read More](https://sfccapital.com/blog/welcome-to-seis-2-0) 30 Sep 2022 [Investors](https://sfccapital.com/blog/tag/investors) ##### [Why the beauty sector is always a good idea for investment](https://sfccapital.com/blog/why-the-beauty-sector-is-always-a-good-idea-for-investment) Why the beauty sector is always a good idea for investment It’s not a secret that markets are curren... [Read More](https://sfccapital.com/blog/why-the-beauty-sector-is-always-a-good-idea-for-investment) 30 Nov 2018 [News](https://sfccapital.com/blog/tag/news) ##### [Startup Funding Club invests in Cardiff sports media business Lead Sports](https://sfccapital.com/blog/sfc-invests-in-cardiff-sports-media-business-lead-sports) Startup Funding Club invests in Cardiff-based sports promotion and digital marketing company Leading... 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This website is intended for  professional investors, high net worth investor or certified sophisticated investors only for the purposes of the FCA's Conduct of Business Sourcebook.; any reproduction of this information, in whole, or part, is prohibited. The content is for information purposes only and should not be used or considered as an offer or solicitation to purchase or sell any securities. Investment in early-stage companies involves risks such as illiquidity, lack of dividends, loss of investment and dilution. Investment in SEIS/EIS eligible companies should be considered as part of a diversified portfolio. The availability of tax relief depends on individual circumstances and may change in the future. The availability of tax relief depends on the company invested in maintaining its SEIS/EIS qualifying status. There is no assurance that the investment objectives of any investment opportunity will be achieved or that the strategies and methods described herein will be successful. The investment products cited herein may place capital at risk and therefore investors may not get back the full amount invested. Past performance is not necessarily a guide to future performance and the value of an investment may go down as well as up. Investors may not get back the full amount invested. Companies’ pitches for investment are not offers to the public and investments can only be made by members of SFC Capital. SFC Capital takes no responsibility for this information or for any recommendations or opinions made by the companies. Neither SFC Capital nor any of its employees provide any financial or tax advice in relation to the investments and investors are recommended to seek independent financial and tax advice before committing. This website is not directed at or intended for publication or distribution to any person (natural or legal) in any jurisdiction where doing so would result in contravention of any applicable laws or regulations. No warranties or representations of any kind are expressed or implied herein. This material is confidential and is the property of SFC Capital. © SFC Capital - 2026 ```json { "@context" : "https://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "Ed Prior, Head of Investor Relations", "url" : "https://sfccapital.com/blog/author/ed-prior-head-of-investor-relations" }, "dateModified" : "2024-03-20T10:02:11.957Z", "datePublished" : "2022-07-13T05:38:00.000Z", "headline" : "Save British Startups – Fix EIS and SEIS | SFC Capital", "image" : [ "https://sfccapital.com/hubfs/Imported_Blog_Media/banner_1657551169.webp" ], "mainEntityOfPage" : { "@id" : "https://sfccapital.com/blog/save-british-startups-fix-eis-seis", "@type" : "WebPage" }, "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject" }, "name" : "SFC Capital" } } ```