Usually accompanied by one of the most famous adages in investment, “The higher the risk, the higher the return”, Venture Capital has been, and still is, associated with serious risk. Nowadays, however, the story reads differently. With a steady increase in the uptake of alternative investments as an asset class, there exists a multitude of exciting investment opportunities. Some of these assets include private equity, venture capital, gold coins, cryptocurrencies, and so forth. Essentially, any asset not defined as a ‘traditional’ asset classes such as equities, bonds, or fiat currencies.
Section 12J Venture Capital Companies, are a disruptive form of alternative investments. They offer the informed investor an efficient chance to guarantee returns on their capital. Best placed in a diversified portfolio, venture capital is perfect for investors with “risk-on” and “risk-off” mindsets.
The gem of Section 12J Venture Capital Companies is the tax benefit it offers to investors. You, as a Section 12J investor, would enjoy the benefit of being able to write off the amount you have invested in a Venture Capital Companies from your yearly taxable income. Further, the investor only has 55% exposure to the risk of their investment, as 45% of the invested amount is rebated. This model is tax-efficient and reduces, greatly, the risk associated with Venture Capital in general.