The only certain outcome of the COVID-19 pandemic is to vindicate the value of investing in biomedicine. Vaccines will be made, treatments will be found, and the social and financial value of medical scientists and innovation will be proven again.
Biotechnology and Healthcare are proving to be amongst the top performing investment sectors over the last decade, particularly at a time when their importance has never been more clear.
In April 2020 the UK government acknowledged the importance of knowledge intensive companies and more importantly the importance of funding them. The introduction of Knowledge Intensive EIS funds allows UK research and development to get the investment it needs to help generate significant impact for British business.
Knowledge intensive firms have tended to have had the hardest time in scaling-up, particularly in their early phases but the new regulations should aid this process. The introduction of knowledge intensive EIS investing will only strengthen the government’s continued efforts to finance the growth of innovative firms across the UK and seed investment as part of a portfolio is a fantastic social, ethical and financial addition.
So… What is knowledge intensive investing
The key is innovation… and the UK is in a very privileged position to be rich in life science, biotechnology and technology ideas, to generate numerous university spinouts, that will fully meet the knowledge intensive criteria.
In order to meet knowledge intensive guidelines, a business must meet a number of criteria, including a team of skilled employees, defined innovation and potential product or platform thresholds A project needs to be assessed on its own quality and merits and the ability to perform this due diligence is key.
As well as having a pool of highly skilled academic core with the potential to create and secure a high value intellectual property rich backbone, therapeutics, biotechs and AI and are at the forefront of research and development. By accessing capital these businesses can create high quality jobs and have the potential to create revenues that add to the overall wealth and prosperity of the UK economy.
Investing in this early stage research and development is opening up access to some of the most exciting opportunities in the UK.
What are the benefits to the Investor…
EIS investing in the UK is key to innovation and growing British businesses in order to create jobs, generate tax and put the UK at the forefront of new ideas.
As well as the government approved EIS tax reliefs, knowledge intensive investing is treated in the tax year in which the fund closes even if the investments are actually made in the next year and of course can be carried back to the previous year.
In addition, investors can claim tax relief on up to £2m per annum, if at least £1m of this is invested in the knowledge intensive companies.
And the Benefits to the company…
Knowledge intensive companies can receive more funding over a longer period of time.
As well as receiving double the amounts of EIS funding per year (£10milliion) extended trading time limits (up to 10) and changes in commercial sale and turnover limits, opens the field for UK knowledge intensive, research and development and home grown talent to take the center stage.
o2h ventures is the perfect fit…
At o2h ventures we are in an exciting position to meet the criteria for knowledge intensive investing to nurture early stage biotech therapeutics & AI assets through seed investment, working alongside and investing in companies that can look to generate returns (financial, social and ethical) for investors as part of the post seed and early finance cycle.
As a group we seed new ideas in science, technology and social enterprise. Knowledge intensive investing is the core of our approach in working across boundaries, nurturing and developing innovation, collaborating and seeding some of the most exciting opportunities across our extensive network.
Bringing knowledge intensive investing to life is a really exciting world to be in.
