29 May HMRC PUBLISH EIS & SEIS DATA FOR 2017/18 TAX YEAR
Today, HMRC published their ‘Statistics on Companies Raising Funds’. This is data summed up from EIS1/SEIS1 forms submitted by companies and self-assessment forms submitted by taxpaying investors. The data is only published for the previous year. So today’s data only has data up to 2017/18 tax year – so more than 12 months old. And these figures continue to be amended from provisional through revised as more submissions are received by HMRC.
However, with those caveats there are some interesting numbers.
NUMBER OF COMPANIES PARTICIPATING & AMOUNTS BEING FUNDED
Over the last few years the number of companies raising has increased, but mostly by the number of companies coming back to the market for new funding.
The overall market has been pretty flat. From £1,930 million raised in 2014/15, peaking at £1,976 million in 2015/16 but then tailing off to £1,929 million 2017/18.
Similarly, but more dramatically, the number of companies raising for the first time has reduced over the last few years. From 1,905 companies raising in 2014/15 down to 1,745 in 2017/18. This is probably a sign of the overall market softening – for both entrepreneurs & investors. But this will be disproportionately impacted by a change in crowdfunding – where there would seem to have been a shift in popularity between early stage to later stage deals and only being funded where there is significant ‘momentum money’.
The total raised has only increased marginally, from £174 million in 2013/14 to £189 million in 2017/18.
NUMBER OF INVESTORS & AMOUNT INVESTED
This data is from self-assessments – and does not fully tally with the data from company submitted EIS1 & SEIS1 forms.
Higher value investors account for the vast majority of EIS funding – 90% of total invested is funded by only 40% of investors, those investing over £20,000 in a year.
What is striking is the low number of investors investing more than £20,000 – only 1,970 in 2017/18 and that had fallen by 20% from 2,500 in 2015/16.
The proportion of total invested for which those higher value investors accounted for fell remained relatively constant, at 70%.