We invest in outstanding teams with research-driven business
proposals or scalable business models.
Investments
We Help Startups Grow
Who We Are
Kerdos Ventures is the Founder-friendly next-generation investor. We provide the network, operational experience and capital that entrepreneurs need to create sustainable, profitable and high-growth businesses.
We are in for the long-haul, investing in primarily early-stage businesses with scalable business models and, most importantly, great teams.
Collectively, our Partners have over 150 years of experience in investing, building and scaling businesses. We have a global network of relationships and a track record that speaks for itself.
All Partners at Kerdos have been through the whole lifecycle of a company, having been founders of and investors in multiple businesses. We think this gives us a better understanding of the challenges Founders face and how we can help them.
Our Vision
Kerdos Ventures is a Next Generation investor that fosters technology companies and innovators.
We collaborate with executives, investors, mentors, other financial investors and industry partners to create significant value to help our investment companies to grow from the seed stage to maturity. We understand this area and engage with each person or organisation in our network that could help this to a successful outcome.
Each company has unique requirements over its life-cycle. Our mentors and partners can act as advisory board members, directors or full-time executives – depending on the needs of the company. From managing cash flow, anticipating funding requirements and determining market strategy, to broader needs such as sales, marketing, customer contracts, development, prototyping and partner distribution agreements. We understand how to ensure the greatest possible outcome for the businesses with which we work.
We believe the way to do this is by pooling resources and working collaboratively.
Share Our Vision?
SEIS / EIS Direct Investments
Enterprise Investment Scheme / Seed Enterprise Investment Scheme
The nature of the KV investment philosophy is one of hands-on, engaged mentoring to selected investee companies, whilst giving our investors access to dynamic and innovative young companies in a range of high-growth industries. We build partnerships with entrepreneurial management teams growing their businesses and with investors seeking potentially attractive, tax-efficient returns on investment.
We invest in companies with visible revenues, long-term contracts and high-quality partners. We actively manage the investee companies, through board representation and close working relationships.
The Enterprise Investment Schemes offered by KV are discretionary managed portfolios of tax-efficient investments. We pre-clear the EIS qualifying status with HMRC for each investee company before we invest. Our investment decisions are influenced by the commercial merits of each transaction and therefore are not based just on the considerable tax benefits that EIS offer.
The Enterprise Investment Scheme (EIS) is a government initiative designed to attract investment into small UK companies. EIS investments provide enterprise capital to small unlisted companies that might otherwise struggle to attract funding. The Government recognises the important role smaller businesses play in a successful economy and offers tax benefits to EIS investors in order to ensure funding is available.
Since their introduction in 1994, EIS investments have grown in popularity with subsequent increases in limit levels ensuring investment volumes continue to rise year on year. According to figures provided by HM Revenue & Customs (HMRC), more than £14.2bllion has been invested through EIS to date (up to the end of the 2014/2015 tax year) with more than £1.8billion of this invested in 2014/15.
Why KV
Hands-on Management
KV takes a proactive approach to managing underlying investee companies. KV’s team of experienced business builders work closely with all investee companies to ensure they are developing as planned and in the best interest of investors.
Growth
Investing in smaller UK businesses has the potential to offer significant long-term growth, if they are successful. Smaller businesses often have the possibility for quicker growth than larger businesses although they also carry a higher risk of loss and value can be more volatile. The KV (S)EIS propositions have been designed by experienced industry experts in order to exploit market opportunities in markets in which our team has extensive knowledge and epxertise, and to maximise growth opportunities.
Diversification
Smaller companies behave and perform in a different manner to larger listed organisations, following different investment cycles. A KV (S)EIS can, therefore, bring additional diversification to an investment portfolio.
Tax Incentives
EIS
Investors may become eligible for certain tax benefits available through the EIS depending on the length of time the underlying investments are held for:
- 30% upfront income tax relief – KV EIS investors may claim up to 30% income tax relief, provided the qualifying investment is held for at least three years. Investors can claim up to £300,000 for the current tax year and up to £300,000 against their income tax liability for the previous year, as long as the amount of tax relief claimed is not more than the income tax paid.
- Tax-free growth – If a KV EIS investment increases in value, there is no capital gains tax (CGT) to be paid.
- 100% inheritance tax relief after two years – As KV EIS shares are eligible for business property relief (BPR), there is no inheritance tax payable if held by the investor for at least two years and they are still held at the time of death. For advice regarding BPR investors should contact their financial or taxation adviser.
- 100% capital gains tax deferral – Any taxable capital gain (from thirty-six months before an EIS investment or twelve months after) can be invested in a KV EIS qualifying company and the CGT will be deferred for the duration that investment is held. If the investment is still held when the investor dies the deferred tax is eliminated.
- Loss relief – Although it is hoped that shares in the underlying investee companies within a KV EIS do not fall in value KV EISs are designed to generate growth, rather than to maximise loss relief), investments can go down as well as up and investors may not get back the full amount invested. Losses from individual EIS investments can be mitigated as loss relief is available on each individual holding. So, investors can claim loss relief if shares in one company fall in value, even if the other shares in the investor’s EIS portfolio increase in value. Investors can set loss relief against CGT or income tax, depending which is the most beneficial for their personal circumstances.
SEIS
Investors may become eligible for certain tax benefits available through the SEIS depending on the length of time the underlying investments are held for:
- 50% upfront income tax relief – KV SEIS investors may claim up to 50% income tax relief, provided the qualifying investment is held for at least three years. Investors can claim up to £50,000 for the current tax year and up to £50,000 against their income tax liability for the previous year, as long as the amount of tax relief claimed is not more than the income tax paid.
- Tax-free growth – If a KV SEIS investment increases in value, there is no capital gains tax (CGT) to be paid.
- 100% inheritance tax relief after two years. As KV SEIS shares are eligible for business property relief (BPR), there is no inheritance tax payable if held by the investor for at least two years and they are still held at the time of death. For advice regarding BPR investors should contact their financial or taxation adviser.
- 50% capital gains tax mitigation – Capital gains made that are reinvested in SEIS shares qualify for a 50% exemption from CGT
- Loss relief – Although it is hoped that shares in the underlying investee companies within a KV EIS do not fall in value KV EISs are designed to generate growth, rather than to maximise loss relief), investments can go down as well as up and investors may not get back the full amount invested. Losses from individual EIS investments can be mitigated as loss relief is available on each individual holding. So, investors can claim loss relief if shares in one company fall in value, even if the other shares in the investor’s EIS portfolio increase in value. Investors can set loss relief against CGT or income tax, depending which is the most beneficial for their personal circumstances.
Risks
Risks
As with any investment, the value of shares can go down as well as up and investors may not get back the full amount invested. Investors should be aware that investment in smaller unlisted companies (including (S)EIS qualifying companies) carries with it a high degree of inherent risk whether or not it is done via a diversified portfolio, regardless of any tax advantages which such an investment might carry and/or regardless of any steps taken to attempt to mitigate that risk. Investment in a KV (S)EIS should therefore be considered a high risk investment.
Long-term investment
(S)EIS shares are often held in unlisted companies, from which investors might only be able to exit via a refinance or company sale. (S)EIS shares must be held for at least three years in order to qualify for income tax relief. If shares are sold prior to being held for three years, any claimed income tax relief will have to be repaid. (S)EIS investments should therefore be considered as a medium-term or long-term investment and investors are unlikely to have access to their capital during the investment period.
Tax Rules may change
(S)EIS tax reliefs are specific to an individual’s circumstances. Tax rules may change and companies may not always be (S)EIS-qualifying. If a qualifying company fails to meet the requirements of (S)EIS legislation, tax reliefs may be withdrawn and investors may have to repay rebated tax. HMRC may change the rules on (S)EIS tax relief at any point.