A fund has been launched under the new Seed Enterprise Investment Scheme (SEIS) which seeks to raise £1.5 million for investment in the digital and creative sectors.
The fund is being raised by Ascension Ventures, the investment arm of Ascension Media Group. It is called ASCEND, which stands for Ascension Seedcapital for Creative Enterprise and Digital.
Law firm Howard Kennedy, which advised Ascension on the launch, says this is the first fund to be launched in the UK under the SEIS, which was created by the Treasury last year to offer enhanced tax breaks to investors in small, early-stage companies, and came into effect from the current 2012/3 tax year.
Ascension is also launching a ‘big sister’ fund under the established Enterprise Investment Scheme (EIS). The Ascension Creative Enterprises EIS fund is targeting £5 million in funds raised.
Sanjay Wadhwani, CEO and founder of Ascension, says the launch of the funds represents ‘a new era in venture investment in the UK’, adding, ‘With new technologies, such as web services and cloud computing, as well as new routes to the consumer available through social and mobile platforms, the cost of launching a new business has never been lower.’
Wadhwani adds, ‘We’ve been working with a number of businesses over the last year, each with compelling business models that are scalable and defensible, preparing them for investment from these funds.’
Ascension plans to invest the funds in 15 to 20 companies creating valuable intellectual property in sectors including audio-visual content production, social and video gaming, live entertainment, designer fashion, product design and e-commerce.
William Bateman, a corporate solicitor at Howard Kennedy, says, ‘These funds are fantastic for British businesses. Investment in early-stage companies, who would otherwise find it difficult to raise finance, will give them the opportunity to scale and create jobs in the UK and in turn help the economy.’
SEIS allows individuals to claim tax relief equal to 50 per cent of the amount invested, alongside up to 28 per cent relief on capital gains tax on any other assets sold during the 2012/3 tax year.
Wadhwani explains, ‘If you invest £100,000 and can take advantage of the 78 per cent tax reliefs, your net cost of investment will be only £22,000.’
ASCEND is seeking to raise its target of £1.5 million by 6 July.