Why SEIS financial planning matters for UK startups
You’ve built a nifty prototype. You’ve pitched friends and family. But now you need proper capital. Enter SEIS financial planning.
SEIS (Seed Enterprise Investment Scheme) and EIS (Enterprise Investment Scheme) let investors claim tax relief. In turn, they boost your odds of raising that critical early-stage funding. But you can’t wing this. A sketchy spreadsheet won’t cut it.
With SEIS financial planning, you:
- Quantify funding needs against projected cash flows.
- Show credible growth paths backed by realistic data.
- Win investor confidence by proving you’ve thought through costs, revenues, and risks.
No more guesswork. No more fancy marketing pitches that collapse under scrutiny. Solid SEIS financial planning is your ticket to commission-free funding through Oriel IPO’s platform—plus expert guidance for each step.
Chapter 1: The core of any financial model
A startup without a financial model? That’s like sailing without a compass. You need a model to:
- Test whether your idea can turn a profit.
- Prepare funding rounds under SEIS/EIS rules.
- Track performance versus targets.
Oriel IPO’s platform bundles educational resources, step-by-step templates, and real-time calculators. It beats generic tools because it’s built for UK SEIS financial planning with curated, tax-efficient options. No FCA licensing drama. Just a transparent, subscription-based toolkit.
Chapter 2: Two forecasting approaches
How do you arrive at numbers? Two classic methods:
Top-down forecasting
You start with the big picture (the total market) and zoom in:
- TAM (Total Available Market): How big is the global or UK market?
- SAM (Serviceable Available Market): What slice applies to your niche?
- SOM (Serviceable Obtainable Market): What market share can you realistically snag?
If UK remote-work tools represent a £500 million SAM, targeting 1% SOM means £5 million sales in five years. Easy, right? Except it can be overly optimistic if you ignore real-world constraints.
Bottom-up forecasting
You flip the script. Start small and build up:
- Estimate unit economics. E.g., cost per widget.
- Factor in customer acquisition: ad spend, lead conversion, churn.
- Tie sales to your actual capacity and budgets.
This approach keeps you honest. But it may undershoot the ambition SEIS investors want to see.
Pro tip: Combine both. Use bottom-up for Years 1–2, top-down for Years 3–5. That way you can both defend short-term numbers and dazzle investors with long-term upside.
Chapter 3: Building the essential inputs
A robust SEIS financial planning model has six pillars:
-
Revenues
– List product lines or service tiers.
– Forecast unit sales or subscription numbers.
– Set prices. Check Ubersuggest or similar tools for demand signals. -
Cost of Goods Sold (COGS)
– For a hardware startup: raw materials + factory labour per unit.
– For SaaS: hosting fees, payment‐gateway charges, support costs. -
Operating Expenses (OPEX)
– Marketing campaigns, travel, legal fees.
– Rent, utilities, office supplies.
– Align spend to your go-to-market strategy. -
Personnel
– Direct labour vs sales, R&D, admin teams.
– Include salaries, benefits, payroll taxes.
– Benchmark revenue per employee to peers. -
Capital Expenditure (CapEx)
– Computers, machinery, office fit-out.
– Spread depreciation over useful life to smooth P&L impact. -
Financing
– SEIS/EIS equity injections.
– Loans and interest schedules.
– Subsidies or grants.
Each input feeds the financial statements and gives you clarity on SEIS financial planning, from P&L to cash flow.
Chapter 4: Outputs that investors crave
After inputting your data, your model should spit out:
1. Financial statements
- Profit & Loss: revenue, COGS, OPEX → EBITDA → net profit.
- Balance Sheet: assets, liabilities, equity.
- Cash Flow Statement: operating, investing, financing cash flows.
2. Operational cash flow forecast
A 12-month monthly view of actual cash in and out. This is your early-warning system. You’ll spot a cash pinch months before it sinks you.
3. KPI dashboard
Tailor your key performance indicators:
- Burn rate & runway (vital for SEIS rounds).
- Customer LTV vs CAC (for SaaS).
- Gross margin %, EBITDA margin %, net margin %.
- Industry-specific metrics: churn, ARPU, deposit timings.
By presenting these outputs clearly, you nail your SEIS financial planning obligations and keep stakeholders in the loop.
Midpoint CTA
Chapter 5: Supporting elements and sanity checks
No model is complete without:
Working Capital
Current assets vs current liabilities.
Payment terms on invoices can make or break you. Imagine delivering £100k of goods and waiting 90 days to get paid. Ouch.
Depreciation
Smooth CapEx impact by spreading costs over asset lifetimes. A £20k machinery purchase might hit your P&L at £5k/year for four years.
Taxes & SEIS/EIS relief
Use a tax scheme to model carryforwards of early losses. Factor in reduced investor tax bills under SEIS/EIS—another selling point.
Scenario analysis
- Base case — your main plan.
- Best case — what if you nail every KPI?
- Worst case — what if sales lag or costs double?
These scenarios help you pitch confidently, showing both upside and downside.
Chapter 6: Why Oriel IPO beats generic tools
Sure, EY Finance Navigator and other giants offer broad financial modeling suites. They’ve supported a thousand startups. But there’s a catch:
- They charge for licences per seat.
- They’re not focused on UK SEIS/EIS intricacies.
- Their advice is broad—not curated for SEIS tax incentives.
Oriel IPO stands out because:
- Commission-free marketplace. You keep more of what you raise.
- Curated, tax-efficient SEIS/EIS options only. No noise.
- Educational guides, webinars, and on-platform calculators.
- Subscription model—predictable cost, unlimited access.
- Integration with Maggie’s AutoBlog for SEO-optimised, tax-focused content on the fly.
With Oriel IPO, you don’t just build a model. You get a tailored SEIS financial planning ecosystem that grows with you.
Chapter 7: Step-by-step with Oriel IPO
Ready to get going? Here’s how to kick off:
- Sign up for your free trial.
- Create a new project and select SEIS/EIS mode.
- Enter base inputs: existing cash, target runway, planned hiring.
- Use the guided templates to fill revenues, COGS, OPEX.
- Run the calculator to see VAT, tax relief allowances, and shortfalls.
- Tweak assumptions—launch delay, ad-spend shifts, pricing changes.
- Generate investor-ready outputs: P&L, cash flow, KPIs, scenario comparisons.
- Download charts or share a link with potential investors.
No more wrestling with tangled spreadsheets. Oriel IPO’s interface is built for founders—clear, concise, actionable.
Chapter 8: Choosing your funding path
Beyond SEIS/EIS, consider:
- Debt: Bank loans or convertible notes. Interest rates bite, but you retain control.
- Equity: Angel or VC rounds. Dilution hurt, but they bring expertise—and SEIS/EIS eases the tax sting.
- Grants & Subsidies: Government funds. Non-dilutive but competitive.
Oriel IPO’s platform flags suitable grant schemes and matches you with investors who love SEIS-eligible deals.
Chapter 9: Final tips and traps to avoid
Before you hit “Send” on your pitch deck:
- Align your financial model with your business plan—no mismatches.
- Substantiate every assumption: market reports, supplier quotes, web data.
- Don’t shoehorn every cost into CapEx just to smooth your P&L.
- Keep your scenarios realistic—no pie-in-the-sky revenue projections.
- Monitor working capital religiously; invoices and supplier terms matter.
Do this, and your SEIS financial planning will look tight. Investors will nod. Term sheets will flow.
Conclusion
SEIS financial planning isn’t a chore. It’s your blueprint to sustainable growth. By combining top-down ambition with bottom-up realism, you craft a model that speaks to both your team and your backers.
Generic tools like EY Finance Navigator have their place—but they’re not laser-focused on UK startups seeking SEIS/EIS relief. Oriel IPO gives you the commission-free marketplace, curated SEIS/EIS deals, and integrated planning tools (plus Maggie’s AutoBlog for seamless content creation).
Ready to build a model investors can’t ignore?
