“I think EIS should be celebrated, with the extension we have another decade of showing just how good EIS is.”
To continue our series celebrating the anniversary of EIS, we interviewed Fred Soneya, co-founder of Haatch, a fund with the mission to back the next generation of B2B SaaS companies.
Fred and the Haatch team launched their first EIS Fund in 2018. Today, Haatch focuses on accelerating pre-seed startups to their first £1m ARR and building the infrastructure to hit £10m+.
With Fred’s unique experience of being a co-founder and an experienced investor, we didn’t want to miss the opportunity to delve into his insights on EIS.
💬What is the impact EIS has had on the startup ecosystem?
The impact is huge. If you think about our business, we’re a fund. There’s two sides of the business. One is raising money from investors and the other side is investing it into companies. Giving investors access to EIS means they continue to invest with us regularly. Then on the company side, we’ve invested in over 105 companies, majority under the EIS scheme, those companies employ over 3,000 people and have raised hundreds of million. So, if you think about that kind of economic impact EIS has through our fund. I’d say it's pretty substantial.
💬What does EIS mean for the UK?
It makes the UK have the best investment tax relief in the world. It makes the UK an exciting place to invest and ultimately, you need to drive investment into early stage companies. So you need to have some incentive to do that over and above just the excitement. And I can’t think of a single tax relief in the world that comes close to matching EIS yet.
💬Do you have a favourite EIS related stat?
40,000 investors in the UK used the scheme in the previous tax year. The exciting part I take from that is that there’s 40,000 people actively investing in EIS, in the last few years a 1,000 invested by Haatch, which is great. I guess the bad part is that it’s only 40,000.
💬What’s one thing about EIS you would change to make it better?
I would increase the age limit and I would ensure that EIS can be invested into as many companies as possible. So I’d remove as many restrictions as possible in the UK and really let EIS flow into as many companies as possible because I think that will increase the holy ecosystem.
💬What’s one thing you wish people knew about EIS?
That it is accessible for a lot more people! It’s not just high net worths, people of all backgrounds and wealth, all levels of investment can invest in EIS schemes.
💬What benefits does EIS bring to founders?
For the founder, the obvious benefit is making you more attractive with tax relief. But for me the main benefit is around opening up the encouragement of investment and encouraging companies to raise. So, by being EIS applicable, I think you open up a huge world of investors that you wouldn’t have access to otherwise. Driving innovation and driving jobs, EIS is really the backbone of powering all of that.
