Theatreshare is a theatre production company aiming to raise £2m through an enterprise investment scheme (EIS) share offering.
The company will use the capital raised to fund musicals, plays and other productions in London's West End. In its first year it will put on Chitty Chitty Bang Bang, Our House and Bombay Dreams.
Eighty per cent of the funds raised will go towards productions that are most likely to make a profit for investors. The remaining 20 per cent will help new projects get off the ground, including links with the Royal Court and Almeida theatres.
Theatreshare has an agreement with Andrew Lloyd Webber's Really Useful Theatres, which owns and manages 12 West End theatres including the London Palladium and Theatre Royal, Drury Lane. Really Useful Theatres will provide Theatreshare with office space, facilities and management assistance. It will also provide investors with benefits such as complimentary tickets, VIP visits and special previews.
An EIS has the same tax incentives as a venture capital trust, but its capital gains tax (CGT) deferral is unlimited while VCTs limit CGT deferral to £100,000 for each person in each tax year.
Theatreshare may attract investors with an interest in the theatre who may have a high CGT liability as the result of selling a business or other assets. But investing in a single unquoted company is high risk. Investors could end up losing their capital, even if just one production does not pull in the crowds. It may also be difficult for investors to sell their shares.