Last week’s announcement of a first investment by the UK Creative Content EIS Fund has given the market an indication of where the media & entertainment sector is heading.

The fund, run by Calculus Capital and backed by the British Film Institute (BFI) and Stargrove Pictures, is being closely watched by those in the EIS industry to see what sort of businesses in this sector can successfully access EIS investment. After all, when the risk to capital condition came into being, many thought it would be the end of EIS investments into film and media, preventing as it did investments into single project companies.

While there remain other investors operating in this sector, it is the fact that this fund is supported by the BFI that has raised interest in the wider market, meaning its first deployment was always likely to be viewed as an important step.

So what is that first investment?

The subject is a production company called Wonderhood Studios. The fact that it is a production company is significant, as it demonstrates that content providers are very much still within the EIS scope.

However, this is not a standard production company. Wonderhood comprises two arms: television production and advertising agency. And notably, it is supported by a third capability “which provides data-led insights into audience behaviour”, according to Calculus. An innovative company that is looking to capture and use data to build its business.

It also has a number of programmes in production, demonstrating that this is not a company simply set up with one short-term goal with a clear end in sight – crucial to show that all capital invested is genuinely ‘at risk’.

Wonderhood was only established in June 2018 – so again, it is clearly ticking the boxes for EIS when it comes to young businesses where capital is crucial to survival.

However, a closer look at Wonderhood suggests that the Creative Content Fund is mitigating against this risk as much as possible, by investing in a company whose owners have a proven track record. 

Run by David Abraham, the former chief executive of Channel 4 (as well as former head of UKTV when it launched the successful Dave channel), the company oozes expertise when it comes to successfully launching television shows and running advertising campaigns. Among its staff, Wonderhood includes a former creative director of Auntie Productions, a former director of development at Lion Television, plus advertising executives who have worked on some of the world’s biggest brands such as Ikea, Adidas and Budweiser.

So while an investment in a small business that has only been in existence for 18 months is undoubtedly risky, the experience and abilities of the firm’s leadership team do suggest Wonderhood is well placed to establish itself in the market, especially given the various commissions it already has on both sides of its business.

It appears, then, that there remains good scope for media & entertainment businesses to access EIS funding, provided they are positioned properly, even if they are content producers developing shows for the BBC, Channel 4 or Channel 5. 

Not everything, it seems, has to be geared squarely towards the less mainstream Netflix or Amazon Prime to get EIS approval. Rather, companies in media & entertainment can still focus on traditional media and find they are both attractive and within the bounds of EIS qualification.

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