Two new science businesses have picked up funding from the Seed Enterprise Investment Scheme also known as SEIS.
Mercia Fund Management has invested the maximum SEIS funding of £150,000 into MabLyte Ltd and Watertronix Ltd from the Mercia Growth Fund 1.
Watertronix is working on a system that cleans water in swimming pools without chlorine. The process not only makes pool water safe for swimmers, but also saves money as expensive filters and air conditioning is needed.
Biochemist MabLyte is developing a range of kits for testing for specific antibodies in the human body.
The Mercia Fund has raised around £2 million for investments in new businesses under the Enterprise Investment Scheme (EIS) and SEIS.
Potential profits
Mercia’s Dr Mark Payton explained as investors, the firm has a good record for identifying potentially profitable new start companies and helping them grow.
He also confirmed that Mercia was looking for more SEIS company investments and disclosed the market is growing as banks are spurning lending for new businesses.
Mercia has another six more SEIS investments in the pipeline.
SEIS offers investors a broad range of income and capital gains tax breaks for investing up to £100,000 in SEIS in the current tax year.
Firms eligible for the investment have to match strict criteria – like having less than £200,000 in assets, having 25 or fewer employees and not being incorporated for more than two years.
To attract more SEIS funding, Mercia is hosting meetings with potential investors to fully explain the tax breaks and to introduce companies seeking investment.
Funding difficulties
Meanwhile, another EIS fund is celebrating raising £2.7 million for start-ups and some more matures enterprises – and is putting together a second fund.
Jensen Seed EIS Fund opened last year and the firm’s first fund will close to investors at the end of April, or earlier, if a £5 million funding target is achieved earlier.
The second fund will continue to raise cash ready for investments planned for 2014 and 2015.
Jensen explains investors can get in on the ground-floor with funding for a portfolio of high-growth companies in the early stages of research and development projects.
A spokesman said: “High-growth companies have difficulty in raising equity of less than £500,000 from the banks due to the current state of the economy as they have no trading history to support their borrowing. This fund addresses such concerns by partnering companies with private investors.”
