Direct Investing & Crowdfunding

Invest directly into some great companies and projects with a sustainable or ethical focus

Last Updated: January 2021

If you have maxed out your ISA and pension contributions, many investors look at tax-efficient investments and investing directly into early stage companies. It is important to note, however, that the risks are often higher than other forms of investment. It is therefore recommended that you consult with a financial advisor to look at these types of investments.

 

To help encourage investors to invest into small and fledgling companies in the UK, the government has a number of schemes which carry generous tax incentives. These include Venture Capital Trusts (VCTs), the Seed Enterprise Investment Scheme (SEIS), Enterprise Investment Scheme, Social Investment Tax Relief (SITR) and Community Investment Tax Relief (CITR).

The main thing about these tax-efficient schemes is that investors can receive tax relief on investing into such companies. For EIS and VCTs, for example, you can receive 30% tax relief on the amount you invest. This means that of the amount you invest, 30% of that can be used to offset your tax bill. More detail on these schemes can be found here: EIS, SEIS and VCT, and SITR and CITR.

There are many opportunities to invest directly into young companies and projects, which often change as those that are seeking finance come and go.

Many of these direct investments have tax advantages to those outlined above, particularly the EIS and SEIS schemes. 

Below we highlight some of the best platforms which offer direct investment options into sustainable and ethical companies.

Abundance

Direct equity and fixed income investments into companies; many eligible for EIS, SEIS and IFISA

 

Minimum investment: From £5

Fee: No platform fee

Typical number of projects open for investment: 1- 3

Typical financial return: 3- 8%

Focus: Green infrastructure projects in the UK

Abundance has invested over £110 million, successfully funding over 45 projects. 

 

Similar to Triodos, you can invest into most of these projects through setting up an Innovative Finance ISA (IFISA), or directly and taking advantage of other tax benefits such as EIS (where applicable).

 

There are usually only one or two projects open for funding at any one time, and these investments are often illiquid and for the long term. You can, however, trade investments on Abundance’s marketplace, which can help you to diversify your investments. 

 

Crowdcube

Direct equity investments into companies; many eligible for EIS and SEIS

 

Minimum investment: From £10

Fee: No platform fee

Typical number of projects open for investment: 20+ 

Focus: Small and growing companies in the UK

Crowdcube is one of the most popular equity crowdfunding platforms in the UK. Crowdcube doesn’t specifically target investments with a positive environmental or social purpose, but it often has companies on there that are positive in their operations. Many of Crowdcube’s investments qualify for tax relief.

 

 

Ethex

Direct equity and fixed income investments into companies; many eligible for EIS, SEIS, SITR or CITR

 

Minimum investment: From £50

Fee: No platform fee

Typical number of projects open for investment: 10+

Typical financial return: 3- 8%

Focus: Environmental and social projects in the UK

Ethex is a marketplace that allows normal people to invest into companies and projects that have a positive impact. Most of the investments on Ethex’s platform take advantage of some tax benefit, and there is a mix of equity and bond investment options.

 

Lendahand

Direct loans towards small scale projects in the developing world

 

Minimum investment: EUR 50 (investments are made and repaid in Euros)

Fee: No platform fee

Typical number of projects open for investment: 2- 6

Typical financial return: 3- 6%

Focus: Loans to small scale projects in the developing world

 

Lendahand is a Dutch company that helps individuals invest into small businesses and projects in developing countries. They have funded more than 2,500 projects since they began, and at present they have EUR50 million invested in more than 15 countries. 

The company has a number of local partners that underwrite the loans, and there are usually several projects open for funding across a number of different social and environmental themes. These vary in terms of the capital required and the term of the loan. None of the investments are available for tax incentives such as EIS or SEIS.

 

SeedTribe 

Direct equity investments into companies; many eligible for EIS and SEIS

 

Minimum investment: From £100

Fee: No platform fee

Typical number of projects open for investment: 10 

Focus: Environmental and social projects in the UK

 

SeedTribe is a dedicated impact investment platform that enables people to invest directly into impactful companies or projects. SeedTribe is powered by Angel Investment Network, which is the world’s largest network of angel investors and entrepreneurs, and has raised over £300m for UK startups. Many of the investments are eligible for certain tax breaks, and there is usually a wide variety of investments open on the platform. 

 

Rather than investing through the platform in the same way as Triodos, Abundance or Crowdcube, SeedTribe helps connect businesses with investors.

 

Triodos Crowdfunding

Direct equity and fixed income investments into companies; many eligible for EIS, SEIS and IFISA

 

Minimum investment: Typically £50

Fee: No platform fee

Typical number of projects open for investment: 1- 2

Typical financial return: 3- 8%

Focus: Environmental and social projects in the UK

Triodos has raised over £150 million through its crowdfunding platform, funding more than 60 projects. You can invest into most of these projects through setting up an Innovative Finance ISA (IFISA), or directly and taking advantage of other tax benefits such as EIS (where applicable).