SEIS offers startups and business entrepreneurs an ideal route to sourcing vital early-stage funding. As an entrepreneur seeking investment through SEIS, you must be prepared to hand over equity in exchange for capital funding. It is not a scheme involved in peer-to-peer lending or debt finance.
The benefits of becoming SEIS compliant are:
Access to Capital
Finding a UK bank willing to provide a startup loan to a small business post-2008 is difficult. Finding a loan with an interest that won’t potentially cripple the business within its first two years is virtually impossible. SEIS offers pure capital investment based on equity exchange, so no need to deal with banks.
In the Shop Window
As a high profile scheme endorsed by many of the top UK crowdfunding sites, an SEIS-compliant business will find itself and its services/products placed in front of a huge audience with a vested interest not just in investment, but in innovation.
Investor ExpertiseSEIS has also linked up new businesses with investors that have contacts and expertise in the sector in which they operate. While this particular benefit isn’t officially part of the scheme, often investors will look for services they can personally add value to, and the startup will usually benefit accordingly.