For all the naysayers and dooms-day Brexiteers out there, here’s one for you:
“14+4 = 18”
So the theory goes that the land cycle has run to this formula over the past 200+ years of recorded history. Research suggests that the economy follows the value of land (theory of economic rent… and all that!).
More specifically the theory is that the land cycle has followed a period of 14 years up (until it hits its peak) and then four years down (14+4); and this cycle has repeated itself over the past 200+ years. So this cycle repeats every 18 years or thereabouts.
You can watch Phillip Anderson (a big time proponent of the 14+4=18 theory) explaining it here:
You can see an example of the real estate graph here:
When was the last 14+4?
So we had a peak in the late 1980s and then a bust in 1992. The next peak was 2006-07 followed by 4 years of downturn.
So where does this leave us now?
So if the 14+4 theory is to hold up, the next kick up from the last downturn should have started around 2011ish and should run up to 2025 before the next crash. So we are now in the relatively early stages of a 14 year bull cycle, despite the negativity that is swirling around us.
Sure, there will be ups and downs along the way (Brexit, anyone?) but it will be interesting to see how this plays out against hiccups such as Brexit and whatever else might be heading down the pass….? It is interesting to note that stockmarkets across the globe are hitting new highs – so the early stages look promising.
Food for thought as you plan for the future in your business against what might otherwise appear to be a negative macro economic backdrop?
Delighted to have launched our new online step by step guide to preparing and filing an Advance Assurance Application to HMRC that your company qualifies under SEIS and / or EIS!
Really brought about by popular demand and to fill a gap where some companies simply don’t have the budget to take on a professional firm to carry out the preparation work and specific advice on advance assurance applications (although I am afraid this can never be a substitute for this).
The course has been called: The SEIS / EIS Advance Assurance DIY Kit. It is really aimed at founders / entrepreneurs to give them a bit of a helping hand. The hope is that for 90% of applications, this might be enough and will therefore result in huge cost and time-savings all round.
As well as a 40 min run through the form and how to complete it, we’ve also chucked in a template of a letter that we use to supplement the standard (limited!) EIS/SEISAA Form. You can use this for your application too.
Some links to further resources rounds off what is hopefully a useful addition to the startup community.
You can access this new online tutorial course on completing your SEIS / EIS advance assurance form here.
This new podcast will provide short snappy summaries on the ins-and-outs plus case-studies on how the Research and Development tax relief might benefit your company - aimed at companies at all stages of the business life-cycle from startup through to international group.
In this introductory podcast we discuss:
Who might benefit from this podcast?
Why the R&D tax credit relief was introduced by the UK Government
The importance in the Dyson report, Ingenious Britain, in making the R&D tax incentive better and better year on year
Why so many companies seem to be missing out on potentially significant year on year cash tax savings and / or rebates?
The structure and approach of these shows
How you can subscribe to ensure that you access every episode
Here we share some tips that you might like to take into account as you seek to issue shares to your business angels in return for this tax advantaged funding:
1. GET READY TO OFFER SHARES IN YOUR COMPANY TO INVESTORS
Understand your obligations to your investors. Take professional advice particularly in relation to your offer document and any shareholders agreement. It is fresh issues of shares only that qualify under SEIS & EIS. Also, remember your obligations extend for at least three years beyond the issue of the SEIS / EIS shares to your investors
2. DRAW UP A DETAILED SHARE CAPITAL TABLE (IN SPREADSHEET FORMAT)
No Founder should be without a detailed spreadsheet share cap table with each step mapped out from the Founder (subscriber) share issues and then for each round thereafter (SEIS, EIS and onwards). This allows the Founder to keep track of respective valuations, % shareholdings, notional options pools and to observe dilutions at each stage
3. SEIS FIRST, EIS AFTER (ALWAYS)
That order ONLY. So if you are planning on fundraising for both (and you have advance assurance for both) ensure that you allow at least ONE day to pass between the issue of the SEIS shares and the EIS shares thereafter
4. WATCH THE GROSS ASSETS LIMITS FOR SHARE SUBSCRIPTIONS
A ‘nice to have’ problem that many Founders would be envious of (!) but make sure that any share subscriptions from investors do not breach the ‘gross assets’ test at the time of the share issue. More likely to be a problem under SEIS with its lower £200k gross assets limit
5. DON’T LET ANY INVESTORS BREACH THE 30% LIMIT
This is where your nifty spreadsheet will come into play. Make sure that % shareholdings are shown and that no SEIS / EIS investors ever exceed 30%. Watch out for “associates” whose shareholdings will be aggregated e.g. spouses, parents, grand- parents, children, grand-children (brothers & sisters are okay)
Rather than settle for just 5 tips, we thought we would round it up to 10 and deliver it in a downloadable one-page PDF. You can access it for free by following the link below