Investments
New to angel investing

Angel investing, explained.

Never invested in a private company before? This page explains how angel investing works, how ESM does it, and what to think about before you start.

The basics

What is angel investing?

Angel investors are private individuals who invest their own money in young companies, usually in exchange for shares. Instead of buying shares on the stock market, you invest directly in a business at an early stage, when your money and experience can make a real difference. If the company grows and is later sold, your shares can be worth many times what you paid. If it fails, you can lose all of your investment.

Investing as part of a syndicate like ESM means you don’t do it alone. Companies are found and checked for you, ESM negotiates the investment terms on members’ behalf, you invest alongside experienced investors, and you can learn from people who have done it before.

How a deal works at ESM

From first look to staying informed.

  1. 01

    Companies are checked first

    Every company goes through initial due diligence before it is invited to pitch. The findings are shared with members.

  2. 02

    You hear the pitch

    Up to three companies present at each quarterly member event. You can ask questions and talk to the founders.

  3. 03

    You decide

    You indicate whether you’re interested. Deeper due diligence follows, supported by a sector expert. Whether you invest is always your decision.

  4. 04

    ESM negotiates the terms

    Agreeing a valuation and the terms of an investment takes experience and know-how that most first-time investors, and many experienced ones, don’t have. ESM negotiates them on members’ behalf.

  5. 05

    You choose how much

    There’s no minimum or maximum. Members invest as much or as little as suits them, deal by deal.

  6. 06

    You stay informed

    ESM provides board representation, and members receive regular reports and bi-annual updates.

SEIS and EIS

Tax relief, in plain English.

UK companies at this stage can qualify for government tax schemes that reward investors for the risk they take.

Tax treatment depends on your circumstances and can change. ESM doesn’t give tax advice, so speak to an adviser before investing.

  • 01EIS (Enterprise Investment Scheme)30% income tax relief on what you invest, tax-free gains if you hold the shares for three years, relief if the company fails, and inheritance tax relief after two years.
  • 02SEIS (Seed Enterprise Investment Scheme)For the earliest-stage companies: 50% income tax relief on investments of up to £200,000 a year, and up to half of a capital gain can be exempt from tax when reinvested in SEIS shares.

Risk warning

Investments of this kind are high risk. You may lose all of the capital you invest. These investments are illiquid and you are unlikely to be able to sell quickly. Tax treatment depends on individual circumstances and may change. ESM Investments Limited does not provide investment, tax or financial advice — you should seek independent professional advice before investing.

Start here

Start by coming to an event.

The best way to understand ESM is to see it. Events are free, and there’s no obligation to invest. Come along, hear the pitches, meet members and decide for yourself.

Continue.