EIS Investing with James D’Mello of The Side By Side Partnership
EIS is short for Enterprise Investment Scheme. James D’Mello from The Side By Side Partnership joins the podcast to explain the benefits of investing in a late stage venture fund with an EIS wrapper.
Side By Side – Background
The Side By Side Partnership was formed in 2016 by John Bailye. John came to the UK after building a $1 billion company called Dendrite from scratch. They were big in CRM and the healthcare world. He sold Dendrite for over $1 billion in market cap. John has developed an effective team that now offers an EIS fund to support the scale up of high growth tech companies.
Listen to the podcast. If you think this is a great place for your money, then you can find more information about The Side By Side Partnership EIS Venture Fund here.
Or contact James D’Mello – 0207 993 8686
Why the UK?
The Side By Side Partnership help entrepreneurs who have been pretty successful already. They’ve got a £1 million turnover business, with customers, but haven’t necessarily got all the tools to get them to scale their business to £20 million or more. This creates the gap for SBS to both fund and support them with people who have done.
The reason the EIS fund is doing well already, is probably for 3 reasons: (a) the companies are all very particularly selected. Due diligence is as good as it ever gets. Much more than is capable with a new-start business with a good idea – they don’t yet have customers nor will they have £1m turnover! (b) SBS help with talented advisers to help these companies ‘see round corners’. In other words, they’ll advise the entrepreneur on strategy, being aware of the mistakes others have made, and they do this every other week. So they get right into the weeds with their ‘investee companies’. And finally, (c) SBS have form. They have done this before. Which means they have grown companies. Scaling is not easy – check out our previous podcast with the amazing Felix Velarde.
What’s the Gap SBS are filling?
The UK doesn’t have enough people who have scaled businesses. The advisers they jettison into these start-ip companies are veterans of growth. They’ll help the companies pre-empt hurdles.
Lovely quote from James:
Everyone wants to say they are value-add investors. But if you turn up once a quarter for the Board meeting, it’s not a huge value!
There are funds out there of a bigger size than that being offered by SBS. But, companies choose SBS because of their management team, and the value-add they can bring. If an entrepreneur just wants a cheque and no input, they won’t get the attention of SBS.
A Primer on SEIS and EIS
SBS focus on the later stage companies. They have already generated around £1m in turnover. From an investors point of view, they are real businesses with less risk. Compared to trying to find the 1 in 100 businesses that makes it to the level they’ve already achieved. That’s where you investor risk is at its highest.
James D’Mello Provides This Testimonial
Investing Other People’s Money
There is no stress like managing other people’s money! They call it, OPM. Your investment is illiquid and you should remember you’re in for 5 to 8 years. But, the prospect is a 3x return (and potentially even more). So, £10,000 could deliver £30,000 return in 5 years.
EIS is one of the Govt schemes introduced in the 90s to help people to invest into early stage British start ups. They get up to 30% income tax relief.
How do you Choose the Investee Companies?
Take a closer look at some of the companies James discussed:
Get in touch with The Next 100 Days hosts…
Graham Arrowsmith
Finely Fettled helps out financial advisers, investment brokers and care homes to market to affluent and high net worth customers. Meet Professionals – This is Graham’s business focused on providing lead generation systems for financial advisory companies.
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Kevin Appleby
Kevin is a Chartered Accountant who has worked as a management consultant for a number of years specialising in finance transformation and implementing business change. Currently he is COO of GrowCFO. GrowCFO is Where Finance Leaders Grow Together. Becoming a successful CFO requires commitment and dedication towards delivering your full potential. GrowCFO provides both a community and CPD accredited training designed to grow the next generation of finance leaders. You can find Kevin on linkedin and at kevinappleby.com
