{"id":866,"date":"2019-07-12T10:35:25","date_gmt":"2019-07-12T10:35:25","guid":{"rendered":"https:\/\/swoopfunding.com\/au\/?p=866"},"modified":"2024-06-06T09:48:03","modified_gmt":"2024-06-06T09:48:03","slug":"swoops-guide-to-equity-finance-for-small-businesses","status":"publish","type":"blog","link":"https:\/\/swoopfunding.com\/au\/blog\/swoops-guide-to-equity-finance-for-small-businesses\/","title":{"rendered":"Swoop Guide to Equity Finance for Small Businesses"},"content":{"rendered":"\n

Equity Finance for small businesses<\/strong><\/p>\n\n\n\n

Equity financing involves the sale of your company’s shares and giving a portion of the ownership of the company to investors in exchange for funds. The proportion of your company that will be sold depends on how much has been invested in the company, and what that investment<\/a> is worth at the time of the financing. <\/p>\n\n\n\n

Swoop has built relationships with numerous equity finance\nproviders, and we\u2019ve outlined some of the key types of equity investors below.\nTo <\/p>\n\n\n\n

For more\ninformation and to discuss your options for small business funding, either\nregister or get in touch at hello@swoopfunding.com<\/a> and let the\nfriendly Swoop experts walk you through your options \u2013 we\u2019ll ensure you\u2019re only\nput forward to the most appropriate funding options. <\/p>\n\n\n\n

Click here to get registered<\/a><\/strong><\/p>\n\n\n\n

Angel Investment <\/strong><\/p>\n\n\n\n

Funding\na startup business with an Angel Investor<\/strong><\/p>\n\n\n\n

An Angel Investor<\/a> is usually an affluent or high net worth individual who provides financial backing and investment for small\u00a0startups\u00a0or\u00a0entrepreneurs, usually in exchange for ownership equity. Angel Investors are often found among an entrepreneur’s family and friends.<\/p>\n\n\n\n

Angel Investors usually give funds to a startup at the beginning of the company\u2019s life, where risks of new business failing are relatively high. The financial backing that Angel Investors provide may be a one-time investment to help the business get off the ground, or an ongoing payment to support the company through the difficult and early stages.<\/p>\n\n\n\n

Angel Investors are essentially opposite to Venture Capitalists as they put their focus on helping startups get off the ground and take their first steps, rather than focusing on the profit they may get from the business. They will usually look to be investing between \u00a350k to \u00a3500k.

Angel Investors are also known as business angels, informal investors, angel funders, private investors or seed investors. Some Angel Investors invest through online crowdfunding or may organise themselves into \u2018angel groups\u2019 or \u2018angel networks\u2019 to share investment capital.

Angel Investors, unlike Venture Capitalists, typically use their own money. Angel Investors who seed startup companies which fail during their early stages, stand to lose their money – because of this, there are SEIS and EIS schemes available to encourage this investment.<\/p>\n\n\n\n

The Swoop team of equity experts would love to discuss your small business funding requirements. Please register here or contact us.<\/a><\/strong> <\/a><\/p>\n\n\n\n

Click here to get registered<\/a><\/strong><\/p>\n\n\n\n

SEIS \u2013 Seed Enterprise Investment Scheme <\/strong><\/p>\n\n\n\n

Funding a small business with SEIS<\/strong><\/p>\n\n\n\n

SIES\nwas launched by the UK government in 2012 to encourage investors to finance\nstartups by providing tax breaks for backing projects that may otherwise be\nconsidered too risky.<\/p>\n\n\n\n

SEIS is the younger sibling of the EIS and focuses on gaining funding for small, new businesses. Both the EIS and SEIS are designed to encourage investors to invest in small companies, with the SEIS providing greater tax advantages to compensate for the higher risks associated with investing in very early stage businesses. <\/p>\n\n\n\n

To\nqualify for SEIS, the small company requiring funding must have a place of\nbusiness in the UK, have traded for no more than two years, have fewer than 25\nemployees and gross assets of less than \u00a3200,000. A company can receive up to\n\u00a3150,000 in SEIS funding.<\/p>\n\n\n\n

The\ntax relief offered helps soften the blow should the business not succeed \u2013 but\naims to increase the rewards when things go well. The maximum tax efficient\ninvestment into SEIS qualifying companies is \u00a3100,000 per individual in any one\ntax year. There are various tax incentives offered to SEIS investors including\nup to 50% claimed back as tax relief.<\/p>\n\n\n\n

SEIS was designed to boost\neconomic growth in the UK by promoting new enterprise and entrepreneurship. The\nSEIS scheme is now one of the most revered government-backed schemes ever\ncreated. <\/p>\n\n\n\n

To discuss whether your business could be eligible for SIES or any other funding, contact our team<\/a><\/strong> of experts or get registered. <\/p>\n\n\n\n

Click here to get registered<\/a><\/strong><\/p>\n\n\n\n

EIS \u2013 Enterprise Investment Scheme <\/strong><\/p>\n\n\n\n

Funding a small business with SEIS<\/strong><\/p>\n\n\n\n

Enterprise Investment Scheme EIS) is a series of UK Tax reliefs which were launched in 1994.
EIS seeks to provide funding for small businesses and young companies to assist with their growth. It does this by offering tax reliefs to individual investors who buy new shares in the company.<\/p>\n\n\n\n

Under EIS a business can raise up to \u00a35\nmillion each year, and a maximum of \u00a312 million over the company\u2019s lifetime.\nThis also includes amounts received from other venture capital schemes. The\nbusiness being funded must receive investment under a venture capital scheme\nwithin 7 years of its first commercial sale.<\/p>\n\n\n\n

The money raised by the new share issue\nmust be spent within two years of the investment, or if later, the date the\nbusiness started trading. The funds should be used to grow and develop the\nbusiness, but not be used to purchase all or part of another business.<\/p>\n\n\n\n

Small businesses seeking EIS funding must follow\nthe scheme rules to ensure their investors can claim and keep EIS tax\nreliefs relating to their shares. Tax reliefs will be withheld or withdrawn\nfrom their investors if they do not follow the rules for at least 3 years after\nthe investment is made.<\/p>\n\n\n\n

Investors can claim EIS relief on up to \u00a31m-worth of investments in qualifying companies per person per year (this cap rises to \u00a32m if they\u2019re investing in knowledge-intensive businesses, such as those in the life sciences sector).<\/p>\n\n\n\n

Get registered now, or contact us<\/a><\/strong> to discuss EIS or other funding options with our team of experts. <\/p>\n\n\n\n

Click here to get registered<\/a><\/strong><\/p>\n\n\n\n

VCT \u2013 Venture Capital Trust <\/strong><\/p>\n\n\n\n

Funding a small business with VCT<\/strong><\/p>\n\n\n\n

Venture Capital Trusts (VCTs) are\nprimarily found in the UK where they were first introduced to support small\nbusiness growth. VCTs are listed companies that are run by a fund manager and\nwhich, in turn, invest mainly in smaller companies that are not quoted on stock\nexchanges. <\/p>\n\n\n\n

A VCT is a way for individual\ninvestors to gain access to venture capital investments via the capital market.\nBoth VCT and EIS investments must be made in companies that have objectives to\ngrow and develop. <\/p>\n\n\n\n

Numerous VCTs are listed\non the London Stock Exchange. Their shares are uniquely structured to\noffer tax efficiencies to the investors. To facilitate investment in small\nbusinesses with a view to boosting economic growth, the government offers\ngenerous tax benefits as an incentive for individuals who choose to invest in\nVCTs. These tax benefits make VCTs attractive to higher and additional rate\ntaxpayers.<\/p>\n\n\n\n

VCTs are also attractive for\ninvestors seeking to invest in a diverse range of venture capital investments. <\/p>\n\n\n\n

Register your business here, or get in touch<\/a><\/strong> to discuss the funding options for your small business. <\/p>\n\n\n\n

Click here to get registered<\/a><\/strong><\/p>\n\n\n\n

Crowdfunding <\/strong><\/p>\n\n\n\n

Funding a small business\nwith Crowdfunding<\/strong><\/strong><\/p>\n\n\n\n

Crowdfunding is the term used to describe the practice of a person or a company raising funds from a large number of people \u2013 the \u2018crowd\u2019.<\/p>\n\n\n\n

Traditionally,\nfinancing a business, project or venture involved asking a few people for large\nsums of money. Crowdfunding switches this idea around, using the internet to\napproach potentially millions of possible funders. Crowdfunding has been fuelled in recent years by the easy\naccessibility of crowdfunding websites and social media, bringing investors and\nentrepreneurs together. Crowdfunding sites generate revenue from a percentage\nof the funds raised.<\/p>\n\n\n\n

Swoop works with both Crowdcube and Seedrs to help businesses\nidentify when they are a good fit for crowdfunding as a form of small business investment.\nCrowdfunding can be highly beneficial for B2C businesses with a mass market\nappeal \u2013 and investment rounds can also be great marketing campaigns too.\nBusinesses also tend to achieve higher valuations through crowdfunding.<\/p>\n\n\n\n

Register here or get in touch<\/a><\/strong> <\/a>to discuss Crowdfunding or other funding options for your small business.<\/p>\n\n\n\n

 Click here to get registered<\/a><\/strong><\/p>\n\n\n\n

Venture\nCapital <\/strong><\/p>\n\n\n\n

Funding a small business\nthrough Venture Capital<\/strong><\/strong><\/p>\n\n\n\n

Venture capital<\/a> is financing that investors provide to small businesses that are believed to have long-term growth potential.<\/p>\n\n\n\n

Venture capital generally comes from well-off investors, investment banks and other financial institutions. Venture Capital is not always monetary and can be provided in the form of technical\/managerial expertise. 

Swoop works with a large range of Venture Capital and Private Equity funds which invest purely on an economic basis. Businesses need to be able to show large exponential growth to be a good match for this kind of small business funding, as venture funds will be looking to exit each opportunity at a high multiple to satisfy their investors. This type of finance is probably the most aggressive form of investment and investments tend to range from \u00a32m to \u00a350m.<\/p>\n\n\n\n

The potential for above-average returns is an attractive payoff even though it can be risky for investors. Venture capital funding is increasingly becoming a popular and essential source for raising funds for new companies or ventures (under two years operating), especially if they lack access to capital markets, bank loans or other debt instruments. Generally, the investors will get equity in the company, and, therefore, a say in company decisions.<\/p>\n\n\n\n

Register your business here, or get in touch<\/a><\/strong> to discuss Venture Capital or other funding options for your small business. <\/p>\n\n\n\n

Click here to get registered<\/a><\/strong><\/p>\n\n\n\n

Family Offices <\/strong><\/p>\n\n\n\n

Funding a small business through Family Office investment<\/strong><\/p>\n\n\n\n

Family offices are different from traditional wealth management\nshops in that they offer a total outsourced solution to managing the financial\nand investment side of an affluent individual or family. Many family offices\noffer budgeting, insurance, charitable giving, family-owned businesses, wealth\ntransfer and tax services.<\/p>\n\n\n\n

Family offices can be defined as single family offices or multi-family offices which are sometimes referred to as MFOs. Single-family offices serve one affluent family while multi-family offices are more closely related to traditional private wealth management practices which seek to build their business upon serving many clients.

Swoop has a good network of family offices around the world which work in a similar way to the growth and venture funds, with some offices preferring a general investment strategy while others build their fund around a certain niche e.g. property, food and beverage, manufacturing etc. <\/p>\n\n\n\n

Family offices tend to offer more patient capital than growth and\nventure funds as the need for immediate returns isn\u2019t as great due to the fact\nthat they don\u2019t have a range of investors to appease. Typical investments are\nquite varied and can range from around \u00a3500k \u2013 \u00a315m.<\/p>\n\n\n\n

Get registered now, or contact us<\/a><\/strong> to discuss family office funding or other small business funding options with our team of experts. <\/p>\n\n\n\n

Click here to get registered<\/a><\/strong><\/p>\n\n\n\n

Tier 1 investment <\/strong><\/p>\n\n\n\n

Funding a small business through Tier 1<\/strong><\/p>\n\n\n\n

Tier 1 is one of the\nimmigration routes under the UK\u2019s points-based visa system available to\nindividuals from outside the European Economic Area (EEA).<\/p>\n\n\n\n

Tier 1 is aimed at \u2018high-value migrants\u2019 such as investors and entrepreneurs who have funds available to set up or invest in a business in the UK, graduates with an endorsed business plan and those deemed to have the exceptional talent within their field of expertise. As such, the visas which make up the Tier 1 immigration route offer relatively favourable terms and eligibility requirements for visa holders.<\/p>\n\n\n\n

Swoop works with a number of Tier 1 providers who help match foreign investors with UK businesses looking to invest in the UK market in exchange for a visa. <\/p>\n\n\n\n

Investors must place a minimum of \u00a3200k into the business to be\ndeemed eligible by the home office. Tier 1 can be a great form of investment\nfor businesses looking to increase working capital without having to give away\na huge amount of equity and also gain exposure to another market through that\ninvestor.<\/p>\n\n\n\n

Register your business here, or get in touch<\/a><\/strong> to discuss Tier 1 or other funding options for your small business. <\/p>\n\n\n\n

Click here to get registered<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Equity Finance for small businesses Equity financing involves the sale of your company’s shares and giving a portion of the ownership of the company to investors in exchange for funds. The proportion of your company that will be sold depends on how much has been invested in the company, and what that investment is worth […]<\/p>\n","protected":false},"author":14,"featured_media":3948,"comment_status":"closed","ping_status":"closed","template":"","category":[1361,1359],"class_list":["post-866","blog","type-blog","status-publish","has-post-thumbnail","hentry","category-equity","category-funding-resources"],"acf":[],"featured_image_urls_v2":{"full":["https:\/\/swoopfunding.com\/au\/wp-content\/uploads\/sites\/4\/2019\/07\/accounting-adult-banknotes-210990-980x460-1.jpg",980,460,false],"thumbnail":["https:\/\/swoopfunding.com\/au\/wp-content\/uploads\/sites\/4\/2019\/07\/accounting-adult-banknotes-210990-980x460-1-150x150.jpg",150,150,true],"medium":["https:\/\/swoopfunding.com\/au\/wp-content\/uploads\/sites\/4\/2019\/07\/accounting-adult-banknotes-210990-980x460-1-300x141.jpg",300,141,true],"medium_large":["https:\/\/swoopfunding.com\/au\/wp-content\/uploads\/sites\/4\/2019\/07\/accounting-adult-banknotes-210990-980x460-1-768x360.jpg",768,360,true],"large":["https:\/\/swoopfunding.com\/au\/wp-content\/uploads\/sites\/4\/2019\/07\/accounting-adult-banknotes-210990-980x460-1.jpg",980,460,false],"1536x1536":["https:\/\/swoopfunding.com\/au\/wp-content\/uploads\/sites\/4\/2019\/07\/accounting-adult-banknotes-210990-980x460-1.jpg",980,460,false],"2048x2048":["https:\/\/swoopfunding.com\/au\/wp-content\/uploads\/sites\/4\/2019\/07\/accounting-adult-banknotes-210990-980x460-1.jpg",980,460,false],"image_blog":["https:\/\/swoopfunding.com\/au\/wp-content\/uploads\/sites\/4\/2019\/07\/accounting-adult-banknotes-210990-980x460-1-408x252.jpg",408,252,true],"image_blog_full":["https:\/\/swoopfunding.com\/au\/wp-content\/uploads\/sites\/4\/2019\/07\/accounting-adult-banknotes-210990-980x460-1.jpg",980,460,false],"image_podcast":["https:\/\/swoopfunding.com\/au\/wp-content\/uploads\/sites\/4\/2019\/07\/accounting-adult-banknotes-210990-980x460-1-397x298.jpg",397,298,true],"image_banking":["https:\/\/swoopfunding.com\/au\/wp-content\/uploads\/sites\/4\/2019\/07\/accounting-adult-banknotes-210990-980x460-1-43x20.jpg",43,20,true],"image_blog_internal":["https:\/\/swoopfunding.com\/au\/wp-content\/uploads\/sites\/4\/2019\/07\/accounting-adult-banknotes-210990-980x460-1-840x460.jpg",840,460,true],"image_blog_medium":["https:\/\/swoopfunding.com\/au\/wp-content\/uploads\/sites\/4\/2019\/07\/accounting-adult-banknotes-210990-980x460-1.jpg",980,460,false],"image_single_banking":["https:\/\/swoopfunding.com\/au\/wp-content\/uploads\/sites\/4\/2019\/07\/accounting-adult-banknotes-210990-980x460-1-80x38.jpg",80,38,true]},"post_excerpt_stackable_v2":"

Equity Finance for small businesses Equity financing involves the sale of your company’s shares and giving a portion of the ownership of the company to investors in exchange for funds. The proportion of your company that will be sold depends on how much has been invested in the company, and what that investment is worth at the time of the financing. Swoop has built relationships with numerous equity finance providers, and we\u2019ve outlined some of the key types of equity investors below. To For more information and to discuss your options for small business funding, either register or get in…<\/p>\n","category_list_v2":"Equity<\/a>, Funding resources<\/a>","author_info_v2":{"name":"fabiocalheirosuk","url":"https:\/\/swoopfunding.com\/au\/author\/fabiocalheirosuk\/"},"comments_num_v2":"0 comments","_links":{"self":[{"href":"https:\/\/swoopfunding.com\/au\/wp-json\/wp\/v2\/blog\/866","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/swoopfunding.com\/au\/wp-json\/wp\/v2\/blog"}],"about":[{"href":"https:\/\/swoopfunding.com\/au\/wp-json\/wp\/v2\/types\/blog"}],"author":[{"embeddable":true,"href":"https:\/\/swoopfunding.com\/au\/wp-json\/wp\/v2\/users\/14"}],"replies":[{"embeddable":true,"href":"https:\/\/swoopfunding.com\/au\/wp-json\/wp\/v2\/comments?post=866"}],"version-history":[{"count":3,"href":"https:\/\/swoopfunding.com\/au\/wp-json\/wp\/v2\/blog\/866\/revisions"}],"predecessor-version":[{"id":36750,"href":"https:\/\/swoopfunding.com\/au\/wp-json\/wp\/v2\/blog\/866\/revisions\/36750"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swoopfunding.com\/au\/wp-json\/wp\/v2\/media\/3948"}],"wp:attachment":[{"href":"https:\/\/swoopfunding.com\/au\/wp-json\/wp\/v2\/media?parent=866"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swoopfunding.com\/au\/wp-json\/wp\/v2\/category?post=866"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}