DSW Ventures, the venture capital arm of the Dow Schofield Watts group, is launching its first Seed Enterprise Investment Scheme (SEIS) fund to enable private investors to benefit from tax incentives while funding regional startups.
It aims to raise up to 拢2m for the new fund, of which over 拢230,000 will come from personal investments by Dow Schofield Watts partners and associates. The DSW Ventures SEIS Fund plans to invest at least 拢1m a year in early-stage technology businesses and university spin-outs outside of the London-Oxbridge golden triangle.
The fund aims to fill the persistent funding gap for regional startups 鈥� based on data produced for the British 老九品茶 Bank鈥檚 Nations and Regions Tracker, 70% of UK seed-stage investment goes into London and South East businesses despite having only 30% of the population.
The launch of the new fund follows changes to the tax rules which come into force in April 2023 and increase the amount that companies can receive in SEIS funding from 拢150,000 to 拢250,000 and enable firms up to three years old to qualify, instead of two years at present.
Established in 2019, Manchester-based DSW Ventures has invested in 11 businesses, facilitating 拢12.5m of venture capital. The firm made its first exit in December with the sale of ACAI Outdoorwear, achieving a 4.2x return. The firm鈥檚 prominent position in the national early-stage venture capital market means that it now sees over 2,500 new applicants a year.
鈥淲e set up DSW Ventures to take advantage of the opportunity created by the huge regional imbalance in early-stage venture capital,鈥� said Keith Benson, co-founder of DSW Ventures.
鈥淚nvesting in entrepreneurial and scientific talent acts as a catalyst for growth in local economies, creating jobs and supporting communities whilst generating very attractive investor returns.聽
鈥淥ur investors 鈥� many of whom have built businesses or work as professionals in the regions – totally understand this and are therefore keen to work with us.鈥�
Co-founder David Smith added: 鈥淲e have built our investment business on the principle that the more you put in, the more you get out. We work on an intensive basis with our portfolio companies to maximise the benefit for them and investors.聽
鈥淭he launch of the SEIS fund means that we can start that journey at an earlier stage 鈥� so we can optimise businesses from the start and take them through several stages of funding.鈥�