A company can raise a maximum of £150,000 in SEIS funding, whilst a maximum of £12 million per company can be raised in EIS funding (but no more than £5m in any 12 month period).
Many UK tech startups also qualify as a ‘Knowledge Intensive Company’ which enables them to raise more.
Knowledge intensive companies have a special status when it comes to SEIS/EIS. They can raise almost double the lifetime funding limit of EIS (£20m total vs. £12m total), and a longer fundraising window (10 years instead of 7 years) as well as a host of other benefits.The kicker is that HMRC just lowered the bar for what qualifies as a knowledge intensive companies, and at SeedLegals we see a lot of tech startups that are eligible – without even knowing about it.
Your company qualifies as a knowledge intensive company by meeting one of these conditions:
a) you spent 15% of your operating costs on innovation, research or development in 1 of the last 3 years. Plus, 10% of your operating costs in each of the 3 preceding years leading up to that year. (If you have employed developers, including contractors, you probably qualify for this condition)
b) Creating or using IP to create products that become the companies main business. This includes any hard science innovations, hardware or tech products including software, website code or even an app. (If you have created IP e.g. a proprietary algorithm, you probably qualify for this condition)
c) At least 20% of your company’s full-time employees hold a higher education qualification and their work with you is directly related to that subject. (If you employ a number of Master / PhD holders you probably qualify for this condition)
Not sure whether you qualify as a knowledge intensive company? Hit the chat bubble to talk to one of our SEIS/EIS experts.
Useful links on SEIS/EIS