Introduction

Raising investment is a crucial step for early-stage startups, and the Seed Enterprise Investment Scheme (SEIS) is one of the most attractive funding options available. Designed to encourage investors to back startups, SEIS offers generous tax reliefs—but there are strict funding limits per company and per investor that founders must understand.

This guide explains how much you can raise through SEIS, breaking down the limits for companies and individual investors. Whether you're preparing your first funding round or planning your next steps, understanding these caps will help you structure your investment strategy effectively.

SEIS Funding Limits for Companies

How Much Can a Company Raise Under SEIS?

A single company can raise up to £250,000 in SEIS funding. This is a lifetime cap, meaning that once a startup has received £250,000 through SEIS, it cannot raise additional funds under this scheme.

Key points about the SEIS company limit:

• The £250,000 cap includes all SEIS funding received over time, not per round.

• This limit applies before transitioning to EIS funding (if applicable).

• The funds must be used for qualifying business activities, such as:

  • Product development

  • Hiring employees

  • Marketing and business growth

Example:

If a startup raises £150,000 in its first funding round and then secures £100,000 in a second round, it has reached its SEIS limit and can no longer raise further SEIS-backed investment.

Transitioning from SEIS to EIS

Once the £250,000 SEIS cap is reached, startups can still raise funds under the Enterprise Investment Scheme (EIS). The EIS funding cap is £12 million (or up to £20 million for Knowledge Intensive Companies ("KICs")), but different rules apply.

SEIS Investment Limits for Individual Investors

How Much Can an Investor Invest in SEIS?

Each individual investor can invest up to £200,000 per tax year in SEIS-eligible businesses.

Key points about the SEIS investor limit:

• The £200,000 limit is per tax year, meaning investors can continue investing in SEIS startups annually.

• Investors can split their £200,000 investment across multiple SEIS startups.

• To qualify for SEIS tax relief, investors must hold their shares for at least three years.

Example:

An angel investor could invest £50,000 in one startup, £100,000 in another, and £50,000 in a third—as long as the total remains under £200,000 in a single tax year.

Common Questions About SEIS Funding Limits

What Happens If a Startup Exceeds the SEIS Funding Limit?

If a company raises more than £250,000 through SEIS, any excess investment will not qualify for SEIS tax relief. However, the startup may still be eligible for EIS funding.

Can a Startup Raise SEIS and EIS Funding in the Same Round?

Yes, but SEIS shares must be issued first before EIS shares. This ensures that investors can claim the correct tax relief under each scheme.

Do Convertible Loan Notes Count Towards the SEIS Limit?

Yes, if the loan note converts into equity, it may count towards the SEIS cap, depending on the structure of the agreement.

Conclusion & Next Steps

SEIS provides a fantastic opportunity for startups to raise early-stage investment with attractive tax reliefs for investors. However, strict funding caps apply:

• Companies can raise up to £250,000 total under SEIS.

• Individual investors can invest up to £200,000 per tax year.

• SEIS funds must be used for growth-focused business activities.

If you're preparing to raise SEIS investment, ensuring compliance with these limits is crucial.