One challenge we have found - and looked to improve - is media exposure for these innovative early-stage companies that have benefited from both EIS and SEIS. Journalism is a fast-paced space, in which headline-grabbing funding round sizes often trump more innovative and interesting companies that have raised less when it comes to column inches. Let’s bring those at the EIS and SEIS level to the forefront and shine a light on the innovative businesses successfully raising their first rounds.

Ron Kalifa’s fintech review highlighted that 97% of founders have benefited from the UK’s fantastic tax-incentivised investment schemes, including EIS and SEIS. Despite this, the review also highlighted that the complexity of EIS and SEIS can be a barrier that hinders many high-growth companies that would otherwise look to make use of the scheme. I believe that a lack of understanding of both EIS and SEIS also hampers media engagement with companies at this early stage.

During the first COVID-19 peak in Spring 2020, the Future Fund - part of the Government’s billion-pound package of financial support for innovative firms hit by the fallout of the pandemic - attracted a lot of media coverage. What was ignored, however, was that the Future Fund’s structure only benefited companies that had already secured VC funding, excluding true early-stage startups. It was an issue we at SFC looked to expose - we managed to have our voice heard in the media, pushing for revisions or a new fund that would support those excluded companies.

Despite the challenges, things are changing for the better. We have seen an increased appetite from the media when it comes to covering the UK’s truly early-stage startups. A positive step which has opened up greater opportunities for us to talk about the companies we’re investing in. In the last year alone, SFC has made 120 investments. We recently hosted a panel discussion to help shine the spotlight on some of the challenges facing the UK’s early stage startups. The number of first-time funding rounds into UK seed-stage startups declined for a second consecutive year in 2020, to 36 per cent below the 2018 peak for such deals. Whilst some of this can be attributed to Covid, there are many other issues at play here and the reality is that there are too few early-stage businesses seeking SEIS funding. As it stands, there are around 2,000 companies taking advantage of SEIS every year, but this number should be in the tens of thousands. Through media engagement that draws attention to the importance of seed funding, the resulting investment will help support the Government’s rhetoric about “levelling up”, “building back better”, and creating a “science superpower”.

Pushing the stories of small startups front and centre will always be challenging, but bigger funding rounds don’t always mean more interesting business. If journalism focuses more closely on early stage financing, it will in turn help UK fundraising, by making investors and startups more aware of the opportunities afforded by the unique tax relief schemes available in the UK . This is vital to get the best companies on the funding ladder. EIS and SEIS are the first steps on a long road for many excellent businesses, and with a greater share of voice across the media, I hope we can shine a light on the fantastic entrepreneurship and innovation happening at this stage.