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Q. What are your most important criteria
when choosing an EIS investment? (Top 3)
A. Investors were asked to pick their
top three most important criteria when
considering an investment. The vast
majority (92%) cited the expected level
of return, 67% the quality of information
available on the investment and 58% the
expected timing of exit as being within their
top three most important criteria when
considering an investment opportunity.
Returns have stood out throughout this
survey as being extremely important for
investors and as the risks associated to EIS
investments are significantly higher than
traditional investments it is important
for investors to have quality information
on the investment so that they can make
an educated and informed decision.
Criteria picked by only 8% of respondents
included the manager’s size and reputation
in the market place and 3rd party ratings
and reports on the investment – this can
be partly attributed to the large number
of investors that choose single company
EIS investments rather than using the
services of an EIS investment manager.
Identifying the kind of information that
investors value most could help investment
providers tailor their pitch more effectively.
Q. Which factors are most likely
to make you hesitate about
investing in an EIS? (Top 3)
A. Investing into small start-up companies
requires a lot of investment knowledge,
research and due diligence on the
proposition. Once again, the quality of
information is important for investors
with 92% of respondents saying that poor
quality information would cause them to
hesitate making an investment. Investment
providers should again take note of this
as clear, detailed and quality information
on the investment could encourage more
investors to consider EIS. Other factors that
investors are concerned about include the
level of return, having a complex investment
process and previous poor experiences
with the provider or manager (all 50%). The
economic sector the investment is exposed
to was seen as the least likely factor to
make an investor hesitate with only 25% of
respondents selecting this in their top three.
“Increased competition should create a better environment for investors, leading to more
openness and transparency and ultimately better quality investment opportunities”
