Stephen Margolis, Chairman and Founding Partner of ARIE Tech LLP, has a background in law. Stephen founded Taurus Asset Finance (ARIE Capital’s parent company) in 2011 as an alternative asset finance boutique.
GBI: what are you looking forward to 2021?
Our focus has always remained consistent – we work with a limited number of companies that we have worked with before and whose management we know.
They have all shown growth, have improved revenues and fit into the strategy for the ARIE Capital VC Fund.
With all this taken into account, it will enable us to broaden our range in 2021
GBI: what sets Arie apart from the rest?
We would like to think that our track record is our best USP.
Over our 2 funds we have achieved growth, 2 exits and follow on VC funding. This has been achieved by a rigorous selection process, being involved in the company and mentoring.
GBI: has Arie changed in any way during the last year?
Nothing physical has changed.
All that has changed is a fresh approach to both our investees and our client / investor relationships, for example the creation of www.ariecapitaleis.com, which contains help/advice for both start-ups and investors and demonstrates our growth, interactions and returns for investors.
GBI: has Arie changed in any GBI: the UK appears to have a strong start-up/entrepreneurial culture – what do you put that down to?
Basically, it’s the education process allied to the fintech base of the UK and the relative open mindedness of business to “start up”.
Also, incentives such as EIS enable people to get started with some downside risk protection for investors.
GBI: what are your views on the government’s recent changes to EIS?
I support them. The concept of EIS is to encourage investment where there is more risk and so getting rid of asset-backed EIS means that more money is available for the less conservative, higher-risk opportunities.
GBI: are there any fears that future government changes could undermine the scheme’s effectiveness?
Unfortunately, Governments regularly demonstrate the ability to do u-turns on these matters so I can’t rule them out; but it seems that this Government is getting it right – unless it decides to abandon the investment structure all together, which would be a real shame.
GBI: how can eis investments continue to help diversify client portfolios?
We have all heard and read about great unicorn investments – Instagram, Viper, Waze etc. – and we’ve all wished that we could have had a chance to invest in them.
EIS gives investors that chance and so long as there is a balanced portfolio – i.e. not too much money put into the risky end – then one is giving those investors that chance.
GBI: which sectors do you specialise in and why are these important?
We have investments in:
– life sciences and medical devices
– media and sports related tech
Each of these sectors represents a part of the industry that we believe is dynamic and with exponential growth value across a variety of sectors while still remaining scalable.
GBI: are advisers more receptive to the schemes?
I think so but it is easier for advisers to invest in “brand platforms” as opposed to understanding what the smaller platforms, like ARIE Capital, are doing and the returns that we are achieving.
GBI: are clients more savvy about EIS and SEIS nowadays, and are more of them becoming interested in the schemes?
I believe so, on both counts
GBI: how can advisers continue to educate their clients about the investment opportunities in EIS?
Investee companies have to promote themselves.
We have a page dedicated to start-ups telling them how to pitch; and it is hoped that this will help investors understand what we look for.
GBI: does the industry need to do more to promote the schemes to a wider investor base?
It would be easy to say ‘yes’ to this; but one must never forget that investors are investing hard-earned money and the industry must be careful that investors understand their risks.
GBI: has the continued confusion over Brexit affected the future of EIS?
Now that Brexit has been resolved it should make life easier because the UK will no longer be bound by EU state aid rules and so the Government can create areas like the Northern Power House and give additional incentives to areas where there is real talent looking for opportunity.
GBI: are there any clouds on the horizon that might spoil the party?
There is a saying that behind clouds come clear skies.
So yes, there are potential problems in relation to trading relationships, climate change and economic shifts – but each of those provide opportunity for new technologies and changing ways of working and running our lives.
It is ARIE Capital’s view that it is constantly aware of not just what is happening now, but where we are likely to be in 2 years time, 5 years time and so on. This is the basis of our investment philosophy.