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How the Enterprise Investment Scheme (EIS) Can HelpTo Raise Money For Your Company

We’ve met some great businesses with genuine innovations, who have lost out on previous applications

Find out if your company’s proposal to raise money meets the conditions of EIS and how to apply.

How the scheme works

EIS is designed so that your company can raise money to help grow your business.

So how does the scheme do this?

EIS tax relief is offered to individual investors who buy new shares in your company.

Under EIS, you can raise up to £5 million each year, and a maximum of £12 million in your company’s lifetime. Your company must receive investment under a venture capital scheme within 7 years of its first commercial sale.

You must follow the scheme rules so that your investors can claim and keep EIS tax reliefs relating to their shares. Tax reliefs will be withheld or withdrawn from your investors if you do not follow the rules for at least 3 years after the investment is made.

There are different rules for knowledge-intensive companies that carry out a significant amount of research, development or innovation, and either:

  • want to raise more than £12 million in the company’s lifetime
  • did not receive investment under a venture capital scheme within 7 years of their first commercial sale

How do I apply/claimor EIS (Enterprise Investment Scheme)?

Meeting the requirements of  EIS to make your startup / business most attractive to investors can be tricky. Small mistakes can have big consequences. Businesses seeking to raise funds via either investment scheme should engage a professional service to guide them through the process.

Register with Innovationly to discuss either of this scheme and the many other options for raising capital for your new business.

 

    At Innovationly, we implement successful strategies to ensure your business is ready to apply for Grant Fudning.

    Are SEIS and EIS the same thing?

    No. Although both schemes aim to draw investment into high-growth potential, smaller and younger UK companies, there are significant differences between the programmes. Additionally, entrepreneurs and investors should understand that neither SEIS nor EIS are a source of venture capital. They are incentives. The Government does not provide cash in either programme. Instead, SEIS and EIS provide tax relief to investors who buy shares in qualifying businesses. This should make it easier for those companies to attract the investment they need.

    The key difference between SEIS and EIS is that SEIS is explicitly targeted at start-ups and early-stage businesses, whereas EIS can be used by larger companies.

    • Seed Enterprise Investment Scheme; SEIS targets investment for early-stage companies – those with less than two years trading history and 25 employees. Individual investors (no companies) can invest up to £100,000 in an SEIS business per tax year. SEIS companies can accept no more than £150,000 SEIS funding total
    • Enterprise Investment Scheme: EIS supports larger and more established businesses – those with up to seven years trading history and 250 employees. Individual or corporate investors can invest up to £1 million per tax year. The company can accept up to £5 million per tax year and no more than £12 million EIS funding total. Corporate investors in EIS do not receive tax relief on their investment.  

    EIS has different criteria for Knowledge Intensive Companies (KIC) – which are typically those with high research/development costs and requirements. These companies can accept EIS funding within ten years of trading and may have up to 500 employees. They can also accept up to £10 million per tax year and up to £20 million EIS funding total. 

      The Process OF A Succesful EIS Application Is Never As Straight Forward As They Say!

      Strategy

      Creating a strategy for raising funds through the Enterprise Investment Scheme (EIS) involves multiple steps. The team at Innovationly are here to help companies to  develop a comprehensive strategy for raising funds through EIS that positions it to be more attractive to potential investors and increase the chances of securing the funding it needs to grow and succeed.

      Creativity

      Creating a strategy for raising funds through the Enterprise Investment Scheme (EIS) involves multiple steps. The team at Innovationly are here to help companies to  develop a comprehensive strategy for raising funds through EIS that positions it to be more attractive to potential investors and increase the chances of securing the funding it needs to grow and succeed.

      What is the criteria for applying for the Enterprise Investment Scheme (EIS)?

      EIS:

      • Be new or trading for less than seven years, (ten for KIC)
      • Be a qualifying trade or business (see more here)
      • Be established in the UK
      • Not trading on a recognised stock exchangeat the time of the share issue
      • Not be preparing to become a quoted company or a subsidiary of one at the time of the share issue
      • Not be in control of another company unless that company is a qualifying subsidiary
      • Not be controlled by another company or does not have more than 50% of its shares controlled by another company
      • Not have gross assets over £15 million when the shares are issued
      • Have less than 250 full-time equivalent employees in total when the shares are issued (500 employees for KIC).

          What are the Negatives of applying for EIS?

          While it can be a valuable source of funding for eligible companies, there are also some potential drawbacks to applying for EIS funding:

          • The application process can be Complex for EIS funding and time-consuming, requiring a significant amount of documentation and compliance with various regulations.
          • Make sure you are aware of the funding limits before applying: The amount of funding available through EIS is typically limited, and companies may not be able to raise as much money as they need through this program alone.
          • Only certain types of companies and investments qualify for EIS funding, and companies may not be eligible if they don’t meet the requirements.
          • There is a Risk of share dilution as issuing new shares to raise funds, may dilute the ownership of existing shareholders.
          • Investors who participate in EIS rounds may have certain rights and control over the company, which may result in limited control for the management team.
          • exit opportunities for EIS investments are limited and might not be as attractive as other forms of investments.

          It is also important to seek professional advice to understand the full implications of EIS on the company and the investor.

              How can Innovationly help you apply for EIS (Enterprise Advanced Assurance)

              Innovationly is a company that helps entrepreneurs and startups to raise funding through the Enterprise Investment Scheme (EIS). They can help companies in the following ways:

              • Eligibility assessment: Innovationly can help to assess a company’s eligibility for EIS funding and provide guidance on how to meet the requirements.

              • Business plan development: Innovationly can help companies to develop a solid business plan that clearly outlines the company’s goals, strategies, and projected financial performance, which is important for attracting potential investors.

              • Pitch deck development: Innovationly can help to create a visually appealing and well-structured pitch deck that highlights the key elements of the company’s value proposition and financial projections.

              • Investor relations: Innovationly can help companies to build a strong investor relations plan, including preparing for and managing investor communications.

              • Networking and marketing: Innovationly can help companies to network and market themselves to potential investors, including attending events, reaching out to potential investors, and leveraging social media and other online platforms.

              • Legal and compliance: Innovationly can provide guidance on legal and compliance requirements for EIS fundraising and assist in the preparation of all necessary documentation.

              • Expertise: Innovationly have an experienced team of experts who can provide guidance on all aspects of EIS fundraising, including market analysis, financial projections, and legal and compliance requirements.

              • Referral Program: Innovationly can also help to create referral programs for companies to encourage existing investors to refer their

              We’re Living In A Innovative World. Investors Are Hungry for Disruptive Companies. Are you one?

              At Innovationly, we set out to do something different. We’re a digital marketing agency that works, without the empty promises. In a world guided by the internet, we’ve become the ultimate connoisseurs in understanding its depth and its intricacies.

              Business Plan Preparation

              Innovationly can help in preparing your business plan for EIS funding. The team can assist with Market Analysis, Product/Service Description, Sales and Marketing Plan, Operations Plan, Risk Factors, etc. 

              Pitch Deck Design & Creation

              When designing a pitch deck for an EIS  funding round, it’s important to make sure the pitch deck is visually appealing and easy to understand, and that the information is presented in a logical and coherent way. Keep in mind the audience, tailor the pitch deck to the specific investors you are trying to attract.

              Expert hands-On Pitch Coaching

              Innovationlys expert hands-on pitch coaching for an EIS (Enterprise Investment Scheme) funding round can help a company to refine its pitch and increase its chances of success. A pitch coach can provide guidance on how to effectively communicate the company’s value proposition, market opportunity, and financial projections. 

              Networking and Marketing

              Innovationly can help companies to network and market themselves to potential investors, including attending events, reaching out to potential investors, and leveraging social media and other online platforms.

              Referal Program

              Innovationly has an abundance of industry relations with VC, Angle Investment, and Family funds. Innovationly also has relations with government organisations who also host Investor days and are looking for the next ground breaking business.

              Legal and Compliance

              Innovationly can provide guidance on legal and compliance requirements for EIS fundraising and assist in the preparation of all necessary documentation.

              We prefer to work with companies that want to embrace innovation, and the times.

              Here are a few of our most recent case studies. We aim to update this every three months with some of our very best work to show you exactly what you can expect when you innovate with us.

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