With one eye on the cell phone before him, Lord Flight launched into a promotion of a subject dear to his heart – investment tax credits as a means of encouraging entrepreneurship.
I had come to his home in Westminster, England to interview him, and he apologized for the distraction. There was a vote in the House of Lords on the Brexit bill, and the Lord was waiting for a summoning message to pop up on his cell phone. But while there was time, he was more than happy to discuss Britain’s Enterprise Investment Scheme, Brexit, and his own investment in a Nova Scotia company.
Howard Flight – who sat in Parliament as a Conservative MP during the Tony Blair government and was granted a peerage in 2011 – was one of the architects of the Enterprise Investment Scheme, or EIS, in 1994. It is now a pillar of the British startup scene and Flight, who is the chairman of the EIS Association, works hard to ensure no government weakens it.
“It has been responsible for raising more than £15 billion since its inception, benefitting some 3,000 companies,” he said, seated at his kitchen table. He lives a 10-minute walk from Parliament, in a row of Georgian houses whose former residents include the actor John Gielgud and soldier T.E Lawrence.
“Aside from all else, it (the EIS) has helped instill an entrepreneurial attitude in an entire generation,” he added.
How did I come to be sitting in a Lord’s kitchen, interviewing him about investment tax schemes? Before politics, Flight spent a career in finance. He is also the chairman of Flight & Partners Recovery Fund, a London-based investment group whose principals include Permjot Valia.
Valia lives in Nova Scotia, where he heads such startup-related projects as MentorCamp and the Spark rural entrepreneurship competition. It was Valia who suggested I interview Flight about his investments and the EIS.
The EIS is similar to investment tax incentives that exist in each of the Atlantic Provinces, though in some respects the British program is more generous. It grants a 35 per cent tax credit for investments of as much as £1 million ($1.7 million) and there is no capital gains tax for investors who hold their investment for more than three years.
Lord Flight says he doubts the scheme has cost the treasury any revenue because the growth of young companies more than offsets the losses suffered by granting the tax credit.
He personally has done well in a career of investments and he and Valia were happy to discuss the performance of Flight & Company, which buys and turns around distressed ventures. The fund originally held £10 million, and Valia said the value has risen 80 per cent in the past five years. The partners are now raising a new fund.
As an individual, Lord Flight has invested in Halifax-based BlueLight Analytics, whose technology ensures dentists are using the right amount of energy when curing resin in tooth fillings. It’s evidence of the diverse sources of capital that Atlantic Canadian entrepreneurs access to finance their businesses. Flight says he invested the equivalent of £100,000 in the company, and after the ups and downs expected in a startup, he is optimistic about BlueLight’s prospects.
He’s also optimistic about the outcome of the subject that has consumed British politics for the past four years – Brexit. Lord Flight was a Leaver and believes British goods and services are good enough to find markets on The Continent, especially if the currency adjusts to offset the effects of new tariffs.
“At the end of the day, they {European Union customers) will still want what we produce and we’ll be able to sell it to them,” Flight said.
After a 30-minute chat, he got the message on his phone. The 71-year-old peer was needed in Parliament. He apologized and moments later he was on his bike, peddling past John Gielgud’s house in the direction of the House of Lords.
Peter Moreira is a principal of Entrevestor, which provides news and data on Atlantic Canadian startups.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
