• Our investors have just received back the investment that they made in a solar renewable energy business. If you’ll pardon the pun, it’s been a shining example of how successful the Enterprise Investment Scheme can be.   When we made the investment, it was in response to our investors’ wish to participate in building the UK’s alternative energy infrastructure. We set out to find a credible renewable energy business. It was essential that the one we chose had an excellent track record in planning, building and operating to time and to budget. We were happy to take the investment risk that we would find a buyer to exit our investors after three years – matching the EIS qualifying investment period.   It has been a fascinating, and very fulfilling journey to watch the way that tight management controls ensured that the project was built on time, on budget, and then began operating. Its energy generation has been consistent and within the boundaries promised by management and probability statistics about the UK’s weather.   Our investors have been delighted. Although all interested in the subject of renewable energy, what really attracted them to the idea of making an investment were the benefits offered by participating in the EIS tax relief scheme. This allowed them to do two things, to reduce their income tax bill, and to defer any CGT that they owed – or might owe. An added bonus was that the investment attracted IHT relief.   Not surprisingly our investors, on receiving their cash back, have immediately asked to do the same thing again. Sadly, that is now not possible, for the government has removed EIS from renewable energy schemes. To be fair some investment funds have, in our opinion, provided a very poor return for their investors and at the same time tweaked the nose of HMRC over the way they have operated. However, we feel that a better compromise could have been reached to keep people engaged in supporting the UK’s renewable infrastructure build.   Sadly, it’s really the UK that loses out. Our investors cannot recycle their investment into renewable infrastructure again. The government’s stated intention, that our investor’s money would somehow find its way instead into higher risk venture is all very well, but it is a pipedream and misunderstands how investors think and operate. An investment in renewable energy infrastructure is an allocation to a steady yield and marginal to no capital growth. It forms a significant and valuable part of an investor’s portfolio and is very different from an allocation to higher risk venture.   A look at the government’s own figures on EIS, reported by HMRC in “Statistics on Companies raising funds” (just published) reveals that renewable energy accounted for a quarter of all EIS funds invested in 2014, but this has fallen precipitously since and now accounts for less than 8%. The question is, was the complete exclusion of renewable energy schemes from the EIS a sensible move? Probably not. A better compromise would not have been hard to find, and one that would have kept cash flowing into UK infrastructure projects.   We know, dealing with investors every day, that money that went into renewable energy is not being recycled into higher risk venture. Broader evidence of this is not hard to find, with the HMRC reporting a fall in total funds flowing into EIS in 2015/16.   The shame in the whole exercise is that we want to support the UK’s renewable energy sector; our investors want to support it – again, and yet it’s not something that we can do. It is particularly frustrating as it’s hard to see how anyone has lost out. All the more disappointing then, that in a time of growing political and economic uncertainty, we cannot persuade the government to reconsider the evidence and find a compromise that utilises the strengths of EIS to support the UK’s renewable energy industry.   Dr Julian HickmanPartnerJuno Capital LLP @rotaryaviator   @junocapitalwww.junocapital.co.uk
    201 Posted by administrator
  • Our investors have just received back the investment that they made in a solar renewable energy business. If you’ll pardon the pun, it’s been a shining example of how successful the Enterprise Investment Scheme can be.   When we made the investment, it was in response to our investors’ wish to participate in building the UK’s alternative energy infrastructure. We set out to find a credible renewable energy business. It was essential that the one we chose had an excellent track record in planning, building and operating to time and to budget. We were happy to take the investment risk that we would find a buyer to exit our investors after three years – matching the EIS qualifying investment period.   It has been a fascinating, and very fulfilling journey to watch the way that tight management controls ensured that the project was built on time, on budget, and then began operating. Its energy generation has been consistent and within the boundaries promised by management and probability statistics about the UK’s weather.   Our investors have been delighted. Although all interested in the subject of renewable energy, what really attracted them to the idea of making an investment were the benefits offered by participating in the EIS tax relief scheme. This allowed them to do two things, to reduce their income tax bill, and to defer any CGT that they owed – or might owe. An added bonus was that the investment attracted IHT relief.   Not surprisingly our investors, on receiving their cash back, have immediately asked to do the same thing again. Sadly, that is now not possible, for the government has removed EIS from renewable energy schemes. To be fair some investment funds have, in our opinion, provided a very poor return for their investors and at the same time tweaked the nose of HMRC over the way they have operated. However, we feel that a better compromise could have been reached to keep people engaged in supporting the UK’s renewable infrastructure build.   Sadly, it’s really the UK that loses out. Our investors cannot recycle their investment into renewable infrastructure again. The government’s stated intention, that our investor’s money would somehow find its way instead into higher risk venture is all very well, but it is a pipedream and misunderstands how investors think and operate. An investment in renewable energy infrastructure is an allocation to a steady yield and marginal to no capital growth. It forms a significant and valuable part of an investor’s portfolio and is very different from an allocation to higher risk venture.   A look at the government’s own figures on EIS, reported by HMRC in “Statistics on Companies raising funds” (just published) reveals that renewable energy accounted for a quarter of all EIS funds invested in 2014, but this has fallen precipitously since and now accounts for less than 8%. The question is, was the complete exclusion of renewable energy schemes from the EIS a sensible move? Probably not. A better compromise would not have been hard to find, and one that would have kept cash flowing into UK infrastructure projects.   We know, dealing with investors every day, that money that went into renewable energy is not being recycled into higher risk venture. Broader evidence of this is not hard to find, with the HMRC reporting a fall in total funds flowing into EIS in 2015/16.   The shame in the whole exercise is that we want to support the UK’s renewable energy sector; our investors want to support it – again, and yet it’s not something that we can do. It is particularly frustrating as it’s hard to see how anyone has lost out. All the more disappointing then, that in a time of growing political and economic uncertainty, we cannot persuade the government to reconsider the evidence and find a compromise that utilises the strengths of EIS to support the UK’s renewable energy industry.   Dr Julian HickmanPartnerJuno Capital LLP @rotaryaviator   @junocapitalwww.junocapital.co.uk
    Nov 06, 2017 201
  • The advent of the Government's Autumn budget statement always brings forth a number of predictions. Some wise, some hopeful, and some just plain odd. Into this mix, one this year caught my eye. Apparently, the Government is likely to reduce the amount of income tax relief available to investors in the EIS scheme and increase the qualifying period required to achieve that income tax relief. The originator of this suggestion is RSM, reportedly a tax consultancy service.   Given that nothing is impossible, yes, it could come to pass. However, do we think it is probable? No, not even remotely. I accept that if you take as your context the idea that EIS is a tax shelter for the wealthy, people who can shelter £300k of income tax relief by making a £1m investment, then I think you can convince yourself that this is indeed a possibility. But how many people actually invest £1m into EIS? Not many, that's for sure. Once upon a time when the Government offered EIS relief for investing in renewable energy, or asset backed investments there were a goodly number of people who invested well over £500k a year into these EIS backed schemes.   Times have changed though, with the Government steadily tightening the EIS rules to remove all of these from EIS eligibility over the last few years. That was done to ensure that EIS support was focused onto UK venture businesses, those companies that were likely to generate high growth and, commensurately high contribution to UK GDP. The UK needs this support, as we are not yet that good at supporting our later stage venture companies, the so-called 'Scale Up' stage.   EIS has been very successful at nurturing seed and start up investing, especially with the creation of Seed EIS relief, which increased income tax relief for those who would take a higher investment risk by supporting a start-up business. The challenge for the Government now is to repeat that success with scale-up businesses, in some cases those who benefitted from Seed EIS earlier in their lives, and now need another helping hand to underpin their high growth. Typically, this is when they start tackling international expansion, and have annual revenues in excess of £2-3m and growth rates over 100%.   The question that the Government has been grappling with, and has consulted on widely, is how to best support later stage scale-up businesses in the UK. Most reasoned contributions suggest a marginal increase in EIS relief for investors that support companies in the scale-up stage, with ideas that range from increases in Loss Relief to enhanced Capital Gains Tax deferral. These are ideas that alter the balance of risk for investors, without cost to the Government and as such, are much more likely to appear in the fullness of time.   In conclusion, the idea that the Government would knowingly hit UK venture businesses, and hit them hard by reducing the flows of EIS cash to them, just doesn't make any sense. It also goes against the evidence of the last few years, where successive Governments of all three hues, Labour, Conservative and coalition have repeatedly strengthened and refined the EIS reliefs to support UK businesses. I see this continuing, although given we now have the best set of tax support measures for venture businesses in the world, it's difficult to see too much of major significance changing.   Dr Julian HickmanPartnerJuno Capital LLP   jhickman@junocapital.co.ukwww.junocapital.co.uk
    160 Posted by administrator
  • The advent of the Government's Autumn budget statement always brings forth a number of predictions. Some wise, some hopeful, and some just plain odd. Into this mix, one this year caught my eye. Apparently, the Government is likely to reduce the amount of income tax relief available to investors in the EIS scheme and increase the qualifying period required to achieve that income tax relief. The originator of this suggestion is RSM, reportedly a tax consultancy service.   Given that nothing is impossible, yes, it could come to pass. However, do we think it is probable? No, not even remotely. I accept that if you take as your context the idea that EIS is a tax shelter for the wealthy, people who can shelter £300k of income tax relief by making a £1m investment, then I think you can convince yourself that this is indeed a possibility. But how many people actually invest £1m into EIS? Not many, that's for sure. Once upon a time when the Government offered EIS relief for investing in renewable energy, or asset backed investments there were a goodly number of people who invested well over £500k a year into these EIS backed schemes.   Times have changed though, with the Government steadily tightening the EIS rules to remove all of these from EIS eligibility over the last few years. That was done to ensure that EIS support was focused onto UK venture businesses, those companies that were likely to generate high growth and, commensurately high contribution to UK GDP. The UK needs this support, as we are not yet that good at supporting our later stage venture companies, the so-called 'Scale Up' stage.   EIS has been very successful at nurturing seed and start up investing, especially with the creation of Seed EIS relief, which increased income tax relief for those who would take a higher investment risk by supporting a start-up business. The challenge for the Government now is to repeat that success with scale-up businesses, in some cases those who benefitted from Seed EIS earlier in their lives, and now need another helping hand to underpin their high growth. Typically, this is when they start tackling international expansion, and have annual revenues in excess of £2-3m and growth rates over 100%.   The question that the Government has been grappling with, and has consulted on widely, is how to best support later stage scale-up businesses in the UK. Most reasoned contributions suggest a marginal increase in EIS relief for investors that support companies in the scale-up stage, with ideas that range from increases in Loss Relief to enhanced Capital Gains Tax deferral. These are ideas that alter the balance of risk for investors, without cost to the Government and as such, are much more likely to appear in the fullness of time.   In conclusion, the idea that the Government would knowingly hit UK venture businesses, and hit them hard by reducing the flows of EIS cash to them, just doesn't make any sense. It also goes against the evidence of the last few years, where successive Governments of all three hues, Labour, Conservative and coalition have repeatedly strengthened and refined the EIS reliefs to support UK businesses. I see this continuing, although given we now have the best set of tax support measures for venture businesses in the world, it's difficult to see too much of major significance changing.   Dr Julian HickmanPartnerJuno Capital LLP   jhickman@junocapital.co.ukwww.junocapital.co.uk
    Sep 28, 2017 160
  • We were delighted to attend the LSE this morning to see Destiny Pharma, a Juno Capital portfolio company, welcomed to the AIM Market.   The day has seen the company well received by the market and, at the time of writing, was trading approximately 40% up on the bell.   More commentary to follow over the coming days.
    338 Posted by administrator
  • We were delighted to attend the LSE this morning to see Destiny Pharma, a Juno Capital portfolio company, welcomed to the AIM Market.   The day has seen the company well received by the market and, at the time of writing, was trading approximately 40% up on the bell.   More commentary to follow over the coming days.
    Sep 04, 2017 338
  • 2017 is proving to be a landmark year for Cloud IQ. In March 2017, we announced Series A funding of £4 million from Nauta Capital, Finance Wales and Juno Capital, establishing ourselves as one of the best-funded commerce optimisation platforms, and accelerating our roadmap development. Today, we are pleased to have secured an additional £4 million from lead investor PayPal,and returning investors Nauta Capital, Finance Wales and Juno Capital. The investment cements our exclusive conversion rate optimisation partnership with PayPal, enabling ecommerce businesses using PayPal to track 100% of transactions with Cloud IQ, optimising the consumer journey and resulting in more customers. “Through our recent partnership with Cloud IQ it is clear we share a common vision to improve the consumer journey. Today, Artificial Intelligence powered technology is finally able to deliver individualised consumer experiences at scale. PayPal is excited to support Cloud IQ as they bring to market solutions that improve the overall shopping experience on both web and mobile.” Jeremy Jonker, VP, Head of Global Corporate Development at PayPal. “Cloud IQ’s proposition and market traction is impressive. We are excited by future products that Cloud IQ will bring to market through the opportunities created by this round of funding.” Carles Ferrer, London-based General Partner at Nauta Capital. “Cloud IQ is an exciting and innovative platform. The team at Cloud IQ are ambitious and are on a high growth trajectory and we’re pleased to continue to be able to support them in this latest funding round.” Finance Wales, Investment Executive Carmine Circelli. Investing in our team The funding has enabled us to establish a new engineering teams, senior hires and new offices. We have opened a new hub in Cardiff, Wales, to coordinate sales and bolster customer support, demonstrating our commitment to our customers. Strengthening our senior management team is a priority, which has led us to appoint Tim Perks as Chief Financial Officer and Nick Peart as Chief Marketing Officer. Perks is a proven CFO in the enterprise technology space, having worked with New Voice Media, Redstone and Baltimore. Peart brings a wealth of marketing experience having worked with leading global brands such as Zendesk, Adobe and Clearswift; he will lead global marketing strategy to drive brand and market awareness of Cloud IQ. To grow the team and have closed this round of funding so soon after the last one - and with the participation of PayPal - is testament to the momentum we are building at Cloud IQ. Together we are pioneering new technology which makes the internet work better for consumers, starting with eCommerce.
    253 Posted by administrator
  • 2017 is proving to be a landmark year for Cloud IQ. In March 2017, we announced Series A funding of £4 million from Nauta Capital, Finance Wales and Juno Capital, establishing ourselves as one of the best-funded commerce optimisation platforms, and accelerating our roadmap development. Today, we are pleased to have secured an additional £4 million from lead investor PayPal,and returning investors Nauta Capital, Finance Wales and Juno Capital. The investment cements our exclusive conversion rate optimisation partnership with PayPal, enabling ecommerce businesses using PayPal to track 100% of transactions with Cloud IQ, optimising the consumer journey and resulting in more customers. “Through our recent partnership with Cloud IQ it is clear we share a common vision to improve the consumer journey. Today, Artificial Intelligence powered technology is finally able to deliver individualised consumer experiences at scale. PayPal is excited to support Cloud IQ as they bring to market solutions that improve the overall shopping experience on both web and mobile.” Jeremy Jonker, VP, Head of Global Corporate Development at PayPal. “Cloud IQ’s proposition and market traction is impressive. We are excited by future products that Cloud IQ will bring to market through the opportunities created by this round of funding.” Carles Ferrer, London-based General Partner at Nauta Capital. “Cloud IQ is an exciting and innovative platform. The team at Cloud IQ are ambitious and are on a high growth trajectory and we’re pleased to continue to be able to support them in this latest funding round.” Finance Wales, Investment Executive Carmine Circelli. Investing in our team The funding has enabled us to establish a new engineering teams, senior hires and new offices. We have opened a new hub in Cardiff, Wales, to coordinate sales and bolster customer support, demonstrating our commitment to our customers. Strengthening our senior management team is a priority, which has led us to appoint Tim Perks as Chief Financial Officer and Nick Peart as Chief Marketing Officer. Perks is a proven CFO in the enterprise technology space, having worked with New Voice Media, Redstone and Baltimore. Peart brings a wealth of marketing experience having worked with leading global brands such as Zendesk, Adobe and Clearswift; he will lead global marketing strategy to drive brand and market awareness of Cloud IQ. To grow the team and have closed this round of funding so soon after the last one - and with the participation of PayPal - is testament to the momentum we are building at Cloud IQ. Together we are pioneering new technology which makes the internet work better for consumers, starting with eCommerce.
    Jul 31, 2017 253
  • In this column I have previously outlined what I believe are the key principles for a contemporary and effective Industrial Strategy. The UK ranks third in the world for start-up businesses but not so well in the follow-up phase. The Business Growth Fund has demonstrated that there is significant demand for funding small and medium-sized businesses that have gone past the start-up stage. We have a long way to go, however, in performing as well as the US in this crucial area of the economy. I have been a long-standing and committed supporter of start-ups through my role as a “business angel”. Angel investors are typically established entrepreneurs and business leaders. In addition to deploying our own cash in seeding highly innovative, often disruptive and inevitably risky, new businesses, we are passionate about mentoring the next generation of entrepreneurs.
    290 Posted by administrator
  • In this column I have previously outlined what I believe are the key principles for a contemporary and effective Industrial Strategy. The UK ranks third in the world for start-up businesses but not so well in the follow-up phase. The Business Growth Fund has demonstrated that there is significant demand for funding small and medium-sized businesses that have gone past the start-up stage. We have a long way to go, however, in performing as well as the US in this crucial area of the economy. I have been a long-standing and committed supporter of start-ups through my role as a “business angel”. Angel investors are typically established entrepreneurs and business leaders. In addition to deploying our own cash in seeding highly innovative, often disruptive and inevitably risky, new businesses, we are passionate about mentoring the next generation of entrepreneurs.
    Jun 26, 2017 290
  • Recent coverage on the BBC has focused on UK technology companies, and has posed the question of whether the UK can compete in the global technology industry. One only has to think of Google and Facebook to realise how far behind the US we are in the UK. Where are the UK’s world leading technology giants, and what more must we do to support them?A number of tech entrepreneurs as well as investment specialist have offered their views on what they believe the problem is. Not surprisingly, the common theme amongst them is the struggle that businesses face for funding. However, and perhaps surprisingly, the problem doesn’t lie with seed and start-up capital. In the UK we are actually very good at nurturing small businesses, and the government and organisations such as the NHS have worked hard to support innovation and university spin outs, particularly in the sectors that the UK is strongest in, including life science, healthcare and technology. Instead, the problem is later in the life cycle of these businesses, when they move on to commercialising the product or service that they have built. They need to scale up to meet the demand that they have created, as well as having the fire-power to break into new markets. Neil Woodford, who set up his Patient Capital fund to invest in UK venture was quoted by the BBC this week responding to a question about scale up capital:"We have been appallingly bad at giving those minnows the long-term capital they need" Why then do they struggle to attract investment? The answer is quite simply because the UK’s fund management industry has no place for venture in its portfolios. A thriving, high growth technology company is considered far too risky. As long as this attitude holds sway, the evolution of the UK tech sector will be impeded. We have observed this over the last 10 years, as we have watched a gap open up between the early seed and start up rounds and the later Series A or first institutional investment round. Where not so long ago a Series A might have closed within 3-4 years of seed funding, it is now more likely to be 5-7 years afterwards, if that soon. It is precisely at this stage, what we have termed the “bridge to Series A stage”, that Juno focuses its investment activity. The businesses we are working with are not struggling, far from it. These companies are selected by us for (a) generating more than £1m of annual recurring revenue and (b) growing at unprecedented rates, often with revenue growth in excess of 100%, year on year. Working with Swansea University’s School of Management, Juno has been involved in research to understand why the gatekeepers to the UK’s personal wealth are not supporting venture as effectively as they might. It is a serious problem and our research has left us in little doubt that until the investment industry, specifically IFAs and fund managers, consider an allocation to later stage commercialisation, or scale up stage venture in their portfolios, the UK venture industry will continue to struggle for funding to support growth to any significant scale. The UK government’s EIS regime has, to a meaningful degree, facilitated the evolution of a world-leading entrepreneurial sector at the start up stage by off-setting an element of the perceived risk against tax relief. Similar policy making focused on the scale up stage is now required to support the development of that sector to maturity. If the fiscal and regulatory incentives are in place for investors, there seems little doubt that British innovation will be well-placed to compete on the global stage and perhaps then we will see our own Google, Facebook or Uber. Dr Julian HickmanPartnerJuno Capital LLP@junocapitalwww.junocapital.co.uk
    1393 Posted by administrator
  • Recent coverage on the BBC has focused on UK technology companies, and has posed the question of whether the UK can compete in the global technology industry. One only has to think of Google and Facebook to realise how far behind the US we are in the UK. Where are the UK’s world leading technology giants, and what more must we do to support them?A number of tech entrepreneurs as well as investment specialist have offered their views on what they believe the problem is. Not surprisingly, the common theme amongst them is the struggle that businesses face for funding. However, and perhaps surprisingly, the problem doesn’t lie with seed and start-up capital. In the UK we are actually very good at nurturing small businesses, and the government and organisations such as the NHS have worked hard to support innovation and university spin outs, particularly in the sectors that the UK is strongest in, including life science, healthcare and technology. Instead, the problem is later in the life cycle of these businesses, when they move on to commercialising the product or service that they have built. They need to scale up to meet the demand that they have created, as well as having the fire-power to break into new markets. Neil Woodford, who set up his Patient Capital fund to invest in UK venture was quoted by the BBC this week responding to a question about scale up capital:"We have been appallingly bad at giving those minnows the long-term capital they need" Why then do they struggle to attract investment? The answer is quite simply because the UK’s fund management industry has no place for venture in its portfolios. A thriving, high growth technology company is considered far too risky. As long as this attitude holds sway, the evolution of the UK tech sector will be impeded. We have observed this over the last 10 years, as we have watched a gap open up between the early seed and start up rounds and the later Series A or first institutional investment round. Where not so long ago a Series A might have closed within 3-4 years of seed funding, it is now more likely to be 5-7 years afterwards, if that soon. It is precisely at this stage, what we have termed the “bridge to Series A stage”, that Juno focuses its investment activity. The businesses we are working with are not struggling, far from it. These companies are selected by us for (a) generating more than £1m of annual recurring revenue and (b) growing at unprecedented rates, often with revenue growth in excess of 100%, year on year. Working with Swansea University’s School of Management, Juno has been involved in research to understand why the gatekeepers to the UK’s personal wealth are not supporting venture as effectively as they might. It is a serious problem and our research has left us in little doubt that until the investment industry, specifically IFAs and fund managers, consider an allocation to later stage commercialisation, or scale up stage venture in their portfolios, the UK venture industry will continue to struggle for funding to support growth to any significant scale. The UK government’s EIS regime has, to a meaningful degree, facilitated the evolution of a world-leading entrepreneurial sector at the start up stage by off-setting an element of the perceived risk against tax relief. Similar policy making focused on the scale up stage is now required to support the development of that sector to maturity. If the fiscal and regulatory incentives are in place for investors, there seems little doubt that British innovation will be well-placed to compete on the global stage and perhaps then we will see our own Google, Facebook or Uber. Dr Julian HickmanPartnerJuno Capital LLP@junocapitalwww.junocapital.co.uk
    Sep 20, 2016 1393