EIS 30th Anniversary: Driving Investment into Startups
Executive Summary
The Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) have significantly impacted the UK economy over the past 30 years. Since their introduction in 1994, these schemes have directed over £32.0 billion into more than 56,000 companies, addressing the critical funding gap for startups.
Key Metrics:
- Total Investment: Over £32.0 billion in equity investment.
- Turnover: £192 billion reported in turnover by EIS-backed companies (2014-2023).
- Grants: £3.03 billion in grant funding received by EIS-backed companies (2014-2023).
- Exits: 1,816 exits by EIS-backed companies (2011-2023).
- Unicorns: 46.5% of UK-based unicorns backed by EIS between 2011-2023.
- Female Founders: £7.61 billion raised by EIS-backed companies with at least one female founder (2014-2023).
Impact and Success Stories
- Job Creation: EIS-backed companies generated 386,000 jobs in 2023 alone.
- Patents: From 2014 to 2023, EIS-backed companies filed 79,800 patent applications.
- Knowledge-Intensive Companies: Over £1.93 billion in equity investment by EIS-backed knowledge-intensive companies.
Case Studies
- Deliveroo: Relied on EIS funding at the early stages.
- Paddle: Benefited from SEIS investment.
- Carcinotech: Developed new ways to treat and diagnose cancer.
- Nova Pangaea Technologies: Created sustainable aviation fuel.
Regional Growth Analysis
- Scotland: EIS investment has doubled over the last 10 years.
- Yorkshire and the Humber: EIS investee companies now responsible for over 17,000 jobs, a 483% increase compared to 10 years ago.
- London and the South-East: Historically dominant but showing regional disparities being reduced.
Female Founders
- Investment Growth: Consistent growth in investment into EIS-backed companies with at least one female founder, reaching a peak of £1.52 billion in 2022.
- Current Status: 25% of EIS-backed deals were secured by companies with at least one female founder in 2023.
Future Outlook
- Continued Support: The EIS will continue to drive innovation, especially among knowledge-intensive businesses.
- Extension: The EIS has been extended until 2035, ensuring ongoing support for startups.
- Global Recognition: SEIS and EIS are recognized as the most successful schemes of their kind globally, with many countries emulating their model.
Conclusion
For 30 years, the EIS has been a crucial element of the UK's startup ecosystem, driving private investment into innovative businesses and contributing significantly to job creation, economic growth, and regional development. The continued support and evolution of the EIS will be vital in maintaining the UK’s position as a global leader in entrepreneurship and innovation.