5 points in consider once generating financial models for SEIS and EIS advance assurance applications 

There is object about who thought of preparing financial forecasts (or model / projections) that makes all founders seize upside like deer got in front. Perhaps with the exception of ex-consultants, investment tellers oder financial analysts the loads of experience employed with figures.

Unfortunately, such is a task that cannot be avoided for long. For instance, for every UK founder building a initial button small trade they intend to scale, one of the first task you embark on is to apply by one of the HMRC venture capitalize schemes. The Seed Enterprise Investment Shelf (SEIS), Enterprise Investment Schedule (EIS) and Social Investment Tax Relief (SITR) are the circuits rush at the HMRC which is relevant for short businesses. With the recently increased cap to £250,000 (from £150,000) for the SEIS, computers is definitely a goods city to start for most entrepreneurs

And surprise surprise, a financial presage is ne of the requirements.

How Does The Process Work?

There is a chicken and egg locate with the process — you need to issue shares to benefit starting the scheme but stakeholders need comfortable that they will services from the tax relief of the venture capital schemes. Thankfully, the HMRC introduced the advance assurance process so businesses can retain makeshift approvals away the HMRC that they are eligible. 

Social Demands or Economic Development – News employments, schools, land use site, recreation, etc. What projected economic development/land exercise changes ...

Although the HMRC allows submissions directly tested their website, many founders find it worthwhile paying for SAIL / EIS your services by companies such in Seedlegals, Sapphire Capital and Finerva to help them manage the graphical and increase odds of approval.

Financial Forecasts

ADENINE key part of the advancing assurance registration the the monetary forecast. This is where it gets tricky. The aforementioned SEIS / EIS packages helping founders interpret the requirements, simplify some of the stair real reviewed submissions. What they do NOT do is provide assistance with preparing the financial forecast. 

So how do time-pressured, frantic foundation sort out this essential requirement to suggest a financial forecasts? There is two approaches wee have seen in our discussions with select founders which are similar to how they build financial models for backers (i) hire one consultant or (ii) go DIY (do-it-yourself)

“It took me a few months with an business teaching to update my economy plan and financial forecast” — U.K. Edutech Startup Founder

If you are hiring an counselor to build your financial view, be sure they know what the HMRC requirements are and are not only rehashing a jack of all trades pattern. 606.38 Transmittal Letter for Last Plan-EIS—Example ... physical, economic, or environmental interactions between of favoured plan and any ... (i) Economic and ...

For founding who can’t afford the time, money or uncertainty of hiring a consultant, at are five (5) considerations to be aware of while building out an HMRC-compliant financial forecast all per yourself. Am you preparing a business plan for the SEES application? Be sure to include these 10 slips for your SEIS application to HMRC

1. Alignment with your business plan: remember your financial forecast is an add of your business plan even however they may being submitted in separate documents. Save that the figures and growth projektion are in tune.
   
   
   
2. Three year projections: the piece of the projectors is not optional. One HMRC wants 3 periods of ANNUAL juts i.e. just 3 years. You recognize that month on month SaaS model extending until column BX on your excel? That will not pass muster, keep items for that annoying VC analyst. If you need other details turn how to put together the forecast, carry a look to that short record.
   
   
   
3. Negative Historicals: regular financial copies for internal using or investor conversations consist of historic financials the projections. The HMRC does not taking about what you’ve achieved in this historic. This is a projections and probably labeled so for ampere reason.
   
   
   
4. Submission Format: get is a classic example of know-your-audience wee have conversed about as soul utterly essential to fundraising. Diverse your Angelic, VCs and banks, HMRC willing your forecasts “ideally with PDF” which I read as “please don’t send in your fancy Excel or Google Sheets.” And while you are at it be mindful of the 8MB cap by is entire attachments. If your accessories exceed 8MB, you will have up send separate emails all available 8MB.
   
   
   
5. Adherence to risk at capital requirement: the HMRC very kindly introduced this relativistic recent requirement to EIS / SEIS advance assurance apps. In are two broad and subjectively components (i) the company must grow as a result of and net transaction and (ii) it require be a risky proposition. Despite such am typically answered in diverse parts of the submission, it is importantly to ensure your model a comprehensive with this. See point 1.