SEIS/EIS
How SEIS Can Help You Secure Your First Investors
Introduction
For most startups, securing the first round of investment is one of the hardest challenges. Investors are often hesitant to fund early-stage businesses due to high risk and uncertainty.
This is where the Seed Enterprise Investment Scheme (SEIS) plays a crucial role. The UK government introduced SEIS to de-risk early-stage startup investment by offering significant tax reliefs to investors.
By making startup investing more attractive, SEIS increases the likelihood of securing funding. Many angel investors, venture capital firms, and early-stage funds specifically look for SEIS-eligible startups because of the benefits it provides.
In this guide, we’ll cover:
Why investors hesitate to fund early-stage startups
How SEIS tax reliefs encourage investment
How SEIS-backed startups attract more investors
Practical steps to use SEIS in your fundraising strategy
By the end, you’ll understand why SEIS can be a game-changer for your startup’s fundraising success.
Why Early-Stage Investors Hesitate
Angel investors and early-stage funds are often reluctant to invest in new startups due to the following risks:
High failure rates – Many startups fail within their first few years.
Lack of financial history – Investors prefer businesses with proven traction.
Long exit timelines – Startups take years before delivering returns.
Uncertain market fit – Early-stage companies often pivot or fail to gain traction.
Because of these factors, investors are cautious, making it difficult for startups to secure their first backers.
SEIS directly addresses these concerns by reducing investor risk and increasing potential rewards.
How SEIS De-Risks Startup Investment
SEIS provides significant tax incentives that minimize downside risk and boost returns for investors.
SEIS Tax Benefits for Investors
50% Income Tax Relief – Investors can claim back half of their investment against their tax bill.
Capital Gains Tax (CGT) Exemption – No CGT on shares held for at least 3 years.
Loss Relief – If the investment fails, investors can offset losses against income tax, reducing downside risk.
Inheritance Tax (IHT) Relief – SEIS shares are exempt from IHT after 2 years.
SEIS in Action: Example Investor Scenario
If an investor puts £20,000 into your SEIS-approved startup:
They immediately receive £10,000 back through income tax relief.
If the startup succeeds and they sell their shares for £60,000, they pay no CGT on the £40,000 profit.
If the startup fails, they can claim loss relief, reducing their total tax bill and therefore their financial risk.
This dramatically improves the risk-reward balance, making SEIS-backed startups far more attractive than non-SEIS companies.
How SEIS Makes Your Startup More Attractive to Investors
Startups that qualify for SEIS stand out to investors for several reasons:
Reduced Risk = Increased Investor Confidence
Investors face less risk because of tax reliefs and loss protection.
SEIS allows them to invest more confidently, even in unproven startups.
Bigger Investment Pool = More Funding Opportunities
Many angel investors and funds specifically look for SEIS-eligible startups.
Crowdfunding platforms like Seedrs and Crowdcube favor SEIS campaigns.
Faster Fundraising = Quicker Growth
SEIS incentives speed up investor decision-making.
Startups with SEIS often raise funds faster than those without.
How to Use SEIS in Your Fundraising Strategy
Now that you know why SEIS attracts investors, here’s how to leverage it effectively.
Step 1: Get SEIS Advanced Assurance
SEIS Advanced Assurance is a pre-approval from HMRC, confirming that your startup qualifies.
Most investors will require this before committing funds.
It proves eligibility and makes your startup more credible.
Learn how to apply for SEIS Advanced Assurance.
Step 2: Market Your SEIS Eligibility to Investors
Clearly state that your startup is SEIS-approved in investor materials.
Highlight tax relief benefits in your pitch deck.
List your startup on SEIS-focused investment networks.
Pro Tip: Investors often search specifically for SEIS startups. Making your SEIS status visible can increase inbound interest.
Step 3: Target SEIS Investors & Angel Networks
Some investment groups specialize in SEIS startups, including:
UK Business Angels Association (UKBAA)
Angel Investment Network
SEIS Venture Capital Funds
Crowdfunding platforms like Seedrs & Crowdcube
By focusing on investors who already understand SEIS, you increase your chances of securing funding.
Final Thoughts: SEIS as a Fundraising Game-Changer
SEIS removes major investor concerns, making your startup far more investable.
Lower risk for investors = More funding opportunities.
Bigger investment pool = Easier access to capital.
Faster funding rounds = Quicker startup growth.
Introduction
For most startups, securing the first round of investment is one of the hardest challenges. Investors are often hesitant to fund early-stage businesses due to high risk and uncertainty.
This is where the Seed Enterprise Investment Scheme (SEIS) plays a crucial role. The UK government introduced SEIS to de-risk early-stage startup investment by offering significant tax reliefs to investors.
By making startup investing more attractive, SEIS increases the likelihood of securing funding. Many angel investors, venture capital firms, and early-stage funds specifically look for SEIS-eligible startups because of the benefits it provides.
In this guide, we’ll cover:
Why investors hesitate to fund early-stage startups
How SEIS tax reliefs encourage investment
How SEIS-backed startups attract more investors
Practical steps to use SEIS in your fundraising strategy
By the end, you’ll understand why SEIS can be a game-changer for your startup’s fundraising success.
Why Early-Stage Investors Hesitate
Angel investors and early-stage funds are often reluctant to invest in new startups due to the following risks:
High failure rates – Many startups fail within their first few years.
Lack of financial history – Investors prefer businesses with proven traction.
Long exit timelines – Startups take years before delivering returns.
Uncertain market fit – Early-stage companies often pivot or fail to gain traction.
Because of these factors, investors are cautious, making it difficult for startups to secure their first backers.
SEIS directly addresses these concerns by reducing investor risk and increasing potential rewards.
How SEIS De-Risks Startup Investment
SEIS provides significant tax incentives that minimize downside risk and boost returns for investors.
SEIS Tax Benefits for Investors
50% Income Tax Relief – Investors can claim back half of their investment against their tax bill.
Capital Gains Tax (CGT) Exemption – No CGT on shares held for at least 3 years.
Loss Relief – If the investment fails, investors can offset losses against income tax, reducing downside risk.
Inheritance Tax (IHT) Relief – SEIS shares are exempt from IHT after 2 years.
SEIS in Action: Example Investor Scenario
If an investor puts £20,000 into your SEIS-approved startup:
They immediately receive £10,000 back through income tax relief.
If the startup succeeds and they sell their shares for £60,000, they pay no CGT on the £40,000 profit.
If the startup fails, they can claim loss relief, reducing their total tax bill and therefore their financial risk.
This dramatically improves the risk-reward balance, making SEIS-backed startups far more attractive than non-SEIS companies.
How SEIS Makes Your Startup More Attractive to Investors
Startups that qualify for SEIS stand out to investors for several reasons:
Reduced Risk = Increased Investor Confidence
Investors face less risk because of tax reliefs and loss protection.
SEIS allows them to invest more confidently, even in unproven startups.
Bigger Investment Pool = More Funding Opportunities
Many angel investors and funds specifically look for SEIS-eligible startups.
Crowdfunding platforms like Seedrs and Crowdcube favor SEIS campaigns.
Faster Fundraising = Quicker Growth
SEIS incentives speed up investor decision-making.
Startups with SEIS often raise funds faster than those without.
How to Use SEIS in Your Fundraising Strategy
Now that you know why SEIS attracts investors, here’s how to leverage it effectively.
Step 1: Get SEIS Advanced Assurance
SEIS Advanced Assurance is a pre-approval from HMRC, confirming that your startup qualifies.
Most investors will require this before committing funds.
It proves eligibility and makes your startup more credible.
Learn how to apply for SEIS Advanced Assurance.
Step 2: Market Your SEIS Eligibility to Investors
Clearly state that your startup is SEIS-approved in investor materials.
Highlight tax relief benefits in your pitch deck.
List your startup on SEIS-focused investment networks.
Pro Tip: Investors often search specifically for SEIS startups. Making your SEIS status visible can increase inbound interest.
Step 3: Target SEIS Investors & Angel Networks
Some investment groups specialize in SEIS startups, including:
UK Business Angels Association (UKBAA)
Angel Investment Network
SEIS Venture Capital Funds
Crowdfunding platforms like Seedrs & Crowdcube
By focusing on investors who already understand SEIS, you increase your chances of securing funding.
Final Thoughts: SEIS as a Fundraising Game-Changer
SEIS removes major investor concerns, making your startup far more investable.
Lower risk for investors = More funding opportunities.
Bigger investment pool = Easier access to capital.
Faster funding rounds = Quicker startup growth.
Use SEIS to make your startup more attractive to investors.
SEIS can be a game-changer for raising investment—if you structure it correctly. Get expert guidance today and give investors the tax benefits they want.