Dr. Brian Moretta, Head of Tax Enhanced Services at Hardman & Co outlines why investors in start-ups should be cautious about Brexit

While the UK venture capital industry is digesting the response to the Patient Capital Review, the budget this year was firmly aimed at Brexit. Others will comment on whether it hit the mark, but Brexit should be the hot topic for startup investors. One year ago I highlighted at an industry forum how noone was talking about it. This is still largely true, but now the areas of risk are becoming clearer. These are the largest ones that investors need to consider:

Maven Capital Partners has today announced its profitable exit from SPS (EU) Holdings Limited, delivering a 3x return on funds invested in 2014. This transaction is the second profitable exit for Maven investors in as many months, following the sale of Crawford Scientific for 4.7x the initial investment in October.

Foresight Group has invested £3m of growth capital into 200 Degrees a Nottingham-based specialty coffee roaster with six coffee shops across the UK and a thriving wholesale business.

Calculus Capital has invested £2.2m in Brighton-based Every1Mobile, which has developed a mobile communications platform that is helping to deliver measurable socio-economic inclusion programmes at scale across Africa.

NVM Private Equity has invested £4 million in Manchester based Hello Soda, a global text and big data analytics business. Having achieved exceptional sales growth in the last year, the investment will enable the company to continue its global growth plans and raise the profile of its unique and high-tech offerings.

30 October

The amount raised by VCTs has risen by over £100 million in a year.  VCTs issued shares to a value of £570 million in 2016-17, a 28% rise over the previous year according to stats released by HMRC recently. “The increase in the amount of money that is available to benefit start-up and scale-up industries is great news for all involved,” said Nick Travis, partner in investment management at Smith & Williamson, the accountancy, investment management and tax group.

Maven Capital Partners has exited its investment in Crawford Scientific, a leading supplier of chromatography products and analytical services to the laboratory research and testing sectors, following its sale to Limerston Capital Partners I, LP. The sale realised a return for Maven clients of 4.7x the initial investment in just over three years, with an IRR of 70%. 

More than a third of UK companies (35%) with fewer than 250 employees are changing their business strategy as a result of Brexit, according to new research from Albion Capital, the independent investment manager.

Albion Capital Group announces the sale of its stake in Hilson Moran Holdings Limited, a leading engineering services group in the UK and Middle East, to Tyrens AB, a Swedish technical consultancy, generating a 3x return and 43% IRR.

Maven Capital Partners and Enso Ventures, a leading specialist early-stage venture capital firm have invested £2million in Cognitive Geology, to support the continued growth of the business.

Maven and YFM-backed Indigo Telecom Group, a leading provider of multi-vendor managed and project services to Tier 1 and 2 telecom network operators, equipment vendors, multi-national corporations and government clients, today announced the acquisition of Belcom247 (Bellcom UK Ltd). 

YFM Equity Partners has backed a £1.5 million investment into e2E Engineering Limited, a leading technical consultancy operating in the telecommunications market, with particular expertise in satellite communications. YFM’s funding comes from its two advised VCTs, British Smaller Companies and British Smaller Companies 2.