Investment regulations work to protect all parties involved. The EIS (Enterprise Investment Scheme) and SEIS (Seed Enterprise Investment Scheme) allow angel investors generous tax breaks on their investments. This makes investing less risky, thus protecting you as an investor and encouraging growth for the business by facilitating investment. Under the EIS, angel investors are not entitled to take more than a 30% share of a business, keeping the entrepreneurs in control of their business, incentivised and passionate, making the company easier for you to work with.
UK startups and investments are regulated by the Financial Conduct Authority (FCA). The Financial Services and Markets Act 2000 states that angel investors should self-certify as having a high net worth or being sophisticated investors, meaning that they are knowledgeable and financially stable enough to receive business plans and invest in startups. This helps the entrepreneurs feel that they can rely on your advice and can lead to a stronger level of professional trust, making work smoother.