Angel Investment Explained: A Practical SEIS & EIS Guide for UK Founders

Introduction: Why SEIS & EIS Matter

Raising angel investment can feel like summiting Everest. And the UK government’s Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS) are your Sherpas. These schemes cushion investors with hefty tax breaks. That, in turn, makes funding your startup way more attractive.

But navigating SEIS and EIS isn’t a walk in the park. You need a solid EIS funding guide. Something practical. Something clear. We’ve got you covered. In this post, we unpack everything from the basics to the nitty-gritty of relationship management. By the end, you’ll know exactly how to hike your way to a successful round.

What Are SEIS and EIS?

Before we dive in, let’s set the scene.

SEIS (Seed Enterprise Investment Scheme)
For very early-stage startups.
Investors get up to 50% income tax relief on investments up to £100,000 per tax year.
Capital gains on SEIS shares can be tax-free if held for three years.
EIS (Enterprise Investment Scheme)
For more established ventures.
Investors receive 30% income tax relief on investments up to £1 million per tax year.
Deferral of capital gains tax on gains reinvested into EIS-qualifying companies.

Both schemes turbocharge investor confidence. But they come with hoops to jump through. And that’s where your EIS funding guide steps in.

Why You Need an EIS Funding Guide

You might wonder: “Do I really need a guide?” The answer is an emphatic yes. SEIS and EIS are complex beasts. One misstep, and you lose the tax perks. Worse, you risk reputational damage.

An EIS funding guide helps by:

Breaking down eligibility criteria.
Outlining paperwork and timelines.
Helping you pitch like a pro.
Highlighting pitfalls to avoid.
Steering you towards reliable platforms like Oriel IPO.

Think of it as your trusty map, compass and headlamp rolled into one. No guesswork. No nasty surprises.

Step-by-Step Application Process

Let’s get practical. Here’s a bullet-by-bullet walkthrough on how to secure those precious tax incentives:

Check Your Eligibility
– Turnover under £200,000 for SEIS, under £15 million for EIS.
– Fewer than 25 full-time equivalent employees for SEIS, fewer than 250 for EIS.
– Permanent establishment in the UK.
Advance Assurance
– Apply to HMRC for approval before you start fundraising.
– Speeds up investor due diligence.
Prepare Your Documents
– Business plan.
– Financial forecasts.
– Compliance statements.
– Share subscription forms.
List on a Platform
– Choose a curated, commission-free platform like Oriel IPO.
– Benefit from vetted investor pools focusing on SEIS/EIS.
Raise Funds
– Pitch to angels with your EIS funding guide in tow.
– Highlight tax benefits and growth plan.
Post-Investment Compliance
– Issue SEIS/EIS compliance certificates (SEIS1/EIS1).
– Submit returns to HMRC.

Follow these steps. Keep it neat. Keep it timely. And enjoy the tax perks.

Pros and Cons of SEIS & EIS

No scheme is flawless. Here’s the balanced view in our EIS funding guide:

Pros

Big Tax Reliefs
Investors slash income tax bills by up to 50% (SEIS) or 30% (EIS).
Loss Relief
If things go south, investors can offset losses against income tax.
Capital Gains Exemption
Profits from SEIS shares can be entirely tax-free.
Investor Confidence
Tax incentives lure angels to your doorstep.

Cons

Rigorous Compliance
Miss a form, and you lose the relief for all investors.
Time Pressure
SEIS has strict company age and capital limits.
Cap on Investment
Only £150,000 per company for SEIS, £5 million per year for EIS.
Investor Eligibility
Certain connected investors can’t claim the relief.

Weigh these pros and cons. Use our EIS funding guide to smooth out wrinkles in your process.

Mid-Round Relationship Management

Securing funds is just half the battle. Keeping investors happy is crucial. After all, today’s angel could be tomorrow’s board member.

Key tips:

Transparent Updates
Send monthly performance snapshots. Even a quick bullet-list works.
Use Analytics
Track metrics. Oriel IPO’s platform offers advanced portfolio tracking to keep both sides in the loop.
Invite to Demos
Host quarterly demos or site visits. Build trust face-to-face.
Handle Concerns Promptly
If cash burn spikes or sales dip, flag it early. Honesty wins.

Care and feeding of angels? It’s part art, part science. Nail it, and you’ll find them lining up for your next round.

How Oriel IPO Simplifies SEIS & EIS

Here’s where things get interesting. Many platforms tout themselves as SEIS/EIS specialists. But Oriel IPO does more than just list opportunities:

Commission-Free Model
Pay a clear subscription fee. Keep every pound your investors pledge, minus those pesky commissions.
Curated, Vetted Deals
No random pitches. Only startups that satisfy HMRC rules and pass our quality checks.
Educational Resources
Webinars, guides and deep-dives on the EIS funding guide process.
Maggie’s AutoBlog Integration
Outshine competitors with content. With Maggie’s AutoBlog, automatically generate SEO-optimised blog posts to boost your visibility.
Advanced Analytics
Gain insights via portfolio tracking and secondary market options. Monitor performance without breaking a sweat.

No wonder Oriel IPO has a Strength in our SWOT: a tax-focused, commission-free platform that makes SEIS/EIS accessible.

Explore our features

Competitor Comparison: Why Oriel IPO Wins

Platforms like Seedrs and Crowdcube have scale. They’re household names. They offer advisory services and a wide investor base.

But here’s the catch:

High Fees
Up to 7.5% commission on funds raised. Ouch.
Less Focused Curation
More pitches = more noise. Harder for investors to sift.
Generalised Advice
They serve all schemes, not just SEIS/EIS. You get broad strokes, not pinpointed guidance.

Oriel IPO tackles these gaps:

0% Commission
You keep more of your funds.
Laser-Focused on SEIS/EIS
We know the schemes inside out. Your EIS funding guide lives here.
Deep Education
From webinars to one-page cheat sheets. We teach, not just list.

In this race, specialisation beats generalisation every time.

Advanced Tips for a Winning Campaign

You’ve got deals, docs and a solid platform. What’s next? Elevate your pitch with these pro tips:

Tell a Story
Numbers matter. But nothing hooks like a founder’s journey.
Use Simple Visuals
Infographics on tax reliefs. Flowcharts on the SEIS/EIS application.
Leverage Social Proof
Highlight past investors. Showcase testimonials.
Offer Clear Use-of-Funds
Investors love transparency. A slide on “How we’ll use the next £200k” goes a long way.
Plan for Follow-On Rounds
Show you’re thinking beyond SEIS/EIS. Illustrate a roadmap to Series A.

With these, your EIS funding guide transforms from a checklist into a compelling narrative.

Staying Compliant and Agile

Regulations change. Always keep one eye on HMRC updates. Oriel IPO’s educational hub lets you subscribe to alerts so you’re never caught off-guard.

Regularly review your advance assurance status.
Reconcile your share classes with EIS requirements.
Watch for caps on investment levels.
Be ready to pivot if new rules emerge.

Agility is key. Adapt fast, comply fully, and you’ll build credibility with investors and regulators alike.

Conclusion

Raising angel money via SEIS and EIS needn’t be a minefield. With a solid EIS funding guide, the right platform and a dash of storytelling, you’ll be well on your way to a successful raise.

Remember:

Know your schemes inside out.
Use a commission-free, curated platform like Oriel IPO.
Keep your investors in the loop.
Add polish with tools like Maggie’s AutoBlog.

Ready to make your next round smoother, faster and more efficient?

Get a personalized demo