Are you considering investing in a Tech startup?

Key benefits for Angels

HoxTech Angels give investors access to the best early stage tech startups in Europe. We will often bring these to London and present them to investors that are passionate about investing in the tech scene. We also know that it is important to give investors the opportunity to diversify their risk. Therefore, we will aim to provide access to a very large pool of investment opportunities through our sister company www.dreamstake.net

Becoming an Angel

Whilst angel investing carries risk, investments in tech startups can bring attractive returns. Angel investing in private, unquoted companies is a key asset class and should considered as part of a balanced portfolio. HoxTech Angels will make their own decisions about which startups to invest in and will take shares in the business in return for providing equity finance.

HoxTech Angels will have the opportunity to not only provide capital but also their own experience and knowledge to provide good return on their investment. They will also gain a high degree of personal satisfaction in seeing a startup succeed. It should be noted that angel investing does carry risks as well as rewards, as with all financial investments and you should always take professional advice.

In recognition of the importance of angel investing, the UK Government has introduced very attractive tax relief schemes to encourage more investments in small businesses and offset some of the risks.

Why join HoxTech Angels?

It is advisable for individuals to join a business angel network where you will be able to make your own investment decisions as an individual or as a group of investors (by forming a syndicate of high net worth/sophisticated members) who all pool not only their cash, but also their expertise and contacts to lay the best foundations to make your chosen companies a success.

HoxTech Angels is an unregulated angel network where we act as gatekeeper and facilitator reviewing the business plans, meeting the entrepreneurs and deciding which propositions should be presented to all HoxTech Angels.

HoxTech Angels does not get engaged in the deal process, does not hold cash on behalf of its investors , does not require a power of attorney to be signed or provide investment advice. Under the FSMA rule, all members as part of the registration process have to certify.

Tax Reliefs

Enterprise Investment Scheme (EIS)

Income tax relief of 30 per cent. You get £3,000 off your income tax bill for investing £10,000 under EIS.

No capital gains tax on any profits after 3 years.

If you make a loss on your investment, you can offset that loss against income tax. If you lose your entire £10,000 investment, your actual loss is only £7,000 (£10,000-£3,000). You can reduce your taxable income for the year in which you disposed of the shares by £7,000, resulting in a saving of £2,800 (40 per cent of £7,000) for a higher-rate taxpayer. You could also offset your loss against other capital gains.

No inheritance tax to pay on shares bought through EIS.

You can invest a maximum of £1 million each year through EIS.

Seed Enterprise Investment Scheme (SEIS)

SEIS is very similar to EIS but designed for investing in smaller companies, and providing even more generous tax breaks. Businesses must be less than two years old (there are no age restrictions under EIS).

  • Income tax relief of 50 per cent. You get £5,000 off your income tax bill for investing £10,000 under SEIS.
  • No capital gains tax to pay on profits (same as EIS)
  • No inheritance tax (same as EIS)
  • Loss relief (same as EIS)
  • Extra relief called capital gains reinvestment relief.
  • If you have recently paid capital gains tax on other investments, you can reclaim up to 50 per cent of the tax paid if you reinvest that money into SEIS.
  • In summary for the 2014/15 tax year, the downside protection is 86.5 per cent under SEIS – so you’ll get back £8,650 from a £10,000 investment that totally fails if you pay enough tax to use all the reliefs.
  • The maximum you can invest through SEIS in any tax year is £100,000.

Due to the complexities of the EIS and SEIS reliefs, we recommend to always get professional advice before making any investment decision. HoxTech Angels will offer its members complimentary tax seminars on both EIS & SEIS tax breaks.

Qualifications for Angels

Certified high net worth individual (ie annual income of £100K+), self-certified sophisticated investor or certified sophisticated investor

Willingness to work with HTA an as advisor or Non-Executive Director to share expertise and contacts (time commitment, scope and payment terms to be agreed between member and Tech Startup on a case by case basis)

Individual Membership Fee of £500 + VAT per year

Benefits:

◦     Tech Startup Seminars, Angel Investor Trainings and relevant tax/legal trainings) plus regular bulletin

◦     Attend Investment Meetings and Roundtables allowing you to decide if you want to invest and join a syndicate of other members