How do we find early-stage companies?

There are many ways we can find businesses with high growth potential.

Sourcing EIS Investments:

There is no stock market for EIS companies, so a big part of the challenge in EIS investing is finding great companies.

When considering EIS investing, comparing it with investing in stock-market-listed companies can be helpful. These tend to be very visible: they have a daily share price, publish results and trading statements, and are often the subject of independent research and analysis by brokers who assess whether they might or might not make a good investment.

For fund managers who invest in listed equities, it is, therefore, relatively easy to find potential investments (the skill is picking the ones that will rise in price the most or fall the least from the thousands of companies available).

EIS-qualifying companies cannot be listed on major stock markets (although listing on the Alternative Investment Market (AIM) is allowed). Therefore, the identification of appropriate investment opportunities is not as straightforward.

Focusing on the technology and life sciences sectors, Deepbridge works closely with respected and experienced contacts to identify the best investment opportunities to support and fund.

Potential sources of deal flow include:

  • University professors and academics who might be aware of the most exciting and commercially promising ideas and technologies emerging from their institutions.
  • Experienced professionals and senior executives in different industries and sectors who know where the new talent is within their fields.
  • Accountants, lawyers, corporate financiers and professional service providers working with new businesses and entrepreneurs. Part of their role may be to help companies raise money through external EIS investment.
  • Successful serial entrepreneurs, investors and business angels who have made it their business to try to find and support the UK’s most exciting companies and entrepreneurial talent. They may share opportunities to reduce their investment risk while making it easier for companies to get the money they need.

It is common for a company seeking EIS funding to approach a fund manager directly.

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