Rumours of the death of the alternative finance industry are exaggerated. Altfi reports strongly contra-indicative news, at least:
In its largest fundraise ever, venture capital firm Northzone has raised a massive €1bn.
The firm now plans to use its tenth round of funds to invest in global consumer and enterprise companies across both the US and Europe.
Northzone will continue to focus on companies with “strong propositions”, it said, and leaders that have the “vision and conviction” to succeed on a global stage.
In line with the company’s long-term investment philosophy, it will focus on opportunities across all funding stages, from seed through to IPO.
“The tech, the talent and the growth trajectories are an order of magnitude greater than a decade ago,” Northzone partner Jessica Schultz said.
“Raising €1bn recognises the enormous ambition of European founders and the capital they need to create world-beating businesses.”
With an equal gender split in its investment team, Northzone emphasises the need to build diverse teams, both internally and in its portfolio companies.
Since launching its $500m Fund IX in 2019, the company has expanded its offer to founders, with new hires across sustainability, marketing, talent and business development.
Historical Performance And IFISA Process Guide
That figure is the result of over £24 million of loans facilitated on the site, as we bring individuals looking for a good return on capital together with carefully vetted small companies seeking funds for growth. Bear in mind that lenders’ capital is at risk. Read warnings on site before committing capital.
All loans on site are eligible to be held in a Money&Co. Innovative Finance Individual Savings Account (IFISA), up to the annual ISA limit of £20,000. Such loans offer lenders tax-free income. Our offering is an Innovative Finance ISA (IFISA) that can hold the peer-to-peer (P2P) business loans that Money&Co. facilitates. For the purposes of this article, the terms ISA and IFISA are interchangeable.
So here’s our guide to the process:
The ISA allowance for 2020/21 is unchanged from last tax year at £20,000, allowing a married couple to put £40,000 into a tax-free environment. Over three years, an investment of this scale in two Money&Co. Innovative Finance ISAs would generate £8,400 of income completely free of tax. We’re assuming a 7 per cent return, net of charges and free of tax here.
Once you have made your initial commitment, you might then consider diversifying – buying a spread of loans. To do this, you can go into the “loans for sale” market. All loans bought in this market also qualify for IFISA tax benefits.
Risk: Security, Access, Yield
Do consider not just the return, but the security and the ease of access to your investment. We write regularly about these three key factors. Here’s one of several earlier articles on security, access and yield.