How do I prepare my business for a funding round?

Where should you begin?

The first step when seeking EIS is to get ‘advance approval’ from HMRC.

This certificate allows you to show potential investors that your proposed investment qualifies for EIS.

This makes your business a far more attractive proposition as

investors know they will be eligible for the tax benefits that come with EIS.

To receive advance approval you’ll need to provide:

Your business plan and financial forecasts
A copy of your latest accounts
An explanation of how you meet the risk to capital condition
A list of the amounts, dates and venture capital schemes under which you’ve previously received investment.

You need clear strategies that are backed up by relevant, realistic numbers and predictions.

A successful funding application will hinge on your business plan and forecasts.

Learn more: how do you value a company?

Building the right foundations

Clear and accurate management information will be the foundation for your business plan, it provides valuable insights that can offer peace of mind to potential investors that you are on top of your numbers.

Your management information should be:

Reliable – you need to be sure that the information is correct and gives a true reflection of the business’s performance through robust data capture.
Relevant – your data should focus on the parts that matter, distilling key areas in a clear and easily understandable way.
Easily accessible – information that is slow to gather can make it difficult to dig into any questions your investors may have and can cause delays in the process.

Having a solid plan for exactly what your business needs, where the investment will be spent and accurate milestones to measure success will make the process far smoother and increase your chances of being approved for EIS.