SeedLegals helps CurveBlock claim back thousands from the R&D Tax Credits scheme
Read about how real estate fintech CurveBlock leveraged the R&D tax credits scheme to boost company cash flow and reach...
There is a national health crisis, costing the UK economy £105 billion a year. Mental health. Speaking with Thalamos Founder Arden Tomison, you recognise an immediate sense of urgency, professionalism, and of clear purpose; his resolve to fixing this problem, or at least a major part of it, which includes a paper-based medical system that could, in short, destroy your life. It costs the national health service (taxpayers) hundreds of £millions to muddle-on. His father’s work as a psychiatrist – looking after people with extreme problems – exposed Arden to the scandal of how acute mental health cases are dealt with, on a granular level, and at scale. Conventional systems for doctors and health trusts are all too often, counter-productive, inhumane, and dangerously slow. You might say, sociopathic.
Medical professionals with the very best of intentions are struggling to share critical information with one another, and to manage their day-to-day workload, while people with serious needs are at the mercy of a paper-based system that isn’t fit for purpose. Productivity is painfully inefficient. The system doesn’t care, it doesn’t scale, and it doesn’t cope. The consequences are both shameful and ugly. The view of the medical professionals is that this arcane and labour-intensive system, “barely works – at best”. They need help. The patients deserve much better.
Designing with insider help, Arden, who’s background is in Private Equity Executive Search, sees an opportunity to turn this creaking system around with a raft of digital innovations; “Thalamos is like Xero, for mental health professionals”, providing a cloud-based platform for medics, and a suite of tools to help take mental healthcare into the 21st century. It needs to work for patients, and for the health service on a macro scale, while giving power to clinicians to do their job efficiently, and lawfully. Currently, doctors feel like they are walking through a legal minefield; they need help to navigate, or better still, they need a system that eliminates risk altogether. If a patient doesn’t get the right medication because information isn’t shared between doctors, and then ends up killing themselves, or killing someone else because of this basic error, the doctors can face a career crash, and face liability claims of £millions. Nobody wants this.
“The first part of solving a problem is recognising you have one” notes Arden. “While there has been a phenomenal change in profile of mental health, this remains a hugely underfunded area. 25% of NHS time is spent on mental health, but just 10% of the budget.” The UK government pledged an extra £2billion per year funding boost to mental health services in 2019, so it is also a very big problem. That’s a total NHS spend of £13 billion per year, and still, there is no provider of cloud-based software to help the medics do their job. Patients can be detained for life on the back of these forms, and are frequently given cocktails of powerful drugs, so it is a serious business too.
“A staggering 50% of mental health treatments don’t work, and we don’t know why! All the acute admission, intervention and prescription data is fragmented, sitting in filing cabinets up and down the country. No one is able to access it, understand it, or manage this.” The opportunity to have impact at scale is tremendous.
Thalamos’ mission is to digitise the end-to-end care process, so that there’s an opportunity to manage it, and to humanise it. Imagine what could be done just by analysing national health data, and co-ordinating resources around treatments that work. Billions could be saved. The solution is a powerful combination of data analytics, and productivity tech that empowers the users first. Digitising the assessment and admission process at the front end, in turn streamlines the legal process; for police, courts, hospitals, nurses and psychiatrists to all be on the same page at the same time.
It is universally recognised that lawyers are painfully expensive, even though much of the work they do for start-ups is repetitive and administratively predictable. “Accountancy didn’t work for small businesses, and before SeedLegals, law didn’t work for start-ups”, notes Arden. He’s a big fan of any technology that cuts through on efficiency… “Like Thalamos, SeedLegals is fixing a regulated paper-based problem, recognising that this isn’t working for the people who need it. “
Arden is a solo Founder, with a serious team around him, as he plans for Series A funding in 2020. His career to date specialised in Private Equity Executive Search; bringing expert teams together to solve big problems for investors, so he’s been motivated to reward the Thalamos team with EMI equity options at the early stages of the business. SeedLegals guides Founders like Arden through the process of creating an EMI option pool, step-by-step, with experts on chat/call to help where needed. It automates the admin, and automatically checks compliance, sidestepping the need for an expensive accountant or a lawyer to do it for you. Start-ups can save thousands of pounds, and get the job done in a fraction of the time, with full transparency on the process.
“It really is a no brainer product. SeedLegals is one of the very few products as a Founder that I evangelise about, alongside Xero. Everything else is pretty exploitative – at best”.
It is common for Founders to delay and dither on creating EMI options because it is regarded as a legal quagmire and very expensive – involving lots of heavy lifting, legal fees, and technical jargon. The risk of not doing it is that you miss an enormous incentive for employees. If you delay, you may miss out on top talent, or loose good people who don’t sense they are being fully valued. Getting this wrong too means that senior employees won’t get their expected tax break, or even, the whole EMI scheme breaks. Discovering this kind of problem later could be a disaster for a company raising future funding, or hoping to IPO. You could spend tens of thousands in legal fees to correct it, diverting energy and cash away from growing the business.
SeedLegals has automated the EMI Option process, synchronising forms and contracts and official submission documents. Thalamos is one of the hundreds of start-ups now using it. You can even plan forwards, running scenarios through the system to model option changes ahead of time. When it is ready to execute Your EMI draft will automatically update the Shareholder Agreement, your Employment Contracts, and automatically update your Cap Table. “If you go to a law firm to do this, it costs hundreds per hour. You are paying somebody an awful lot of money to be the pedant that you aren’t.” Technology can do the hard work much more efficiently. Anecdotally, at lease, SeedLegals appear to be saving founders like Arden a cool £15,000 on legal fees for EMI options alone.
It can be tempting for some Founders to explore DIY-ing some of their legal work, given the high cost of law firms. “I am one of those people that likes to understand the full process.” Arden was tempted at first to try EMI registration himself, discovering the manual process to be, “like the infamous bureaucracy in The Hitchhiker’s Guide To The Galaxy”. “The language that HMRC uses to explain is very difficult to get your head around, and everything is caveated.”
“Aside from the cost savings, SeedLegals gives me mental headspace. I do not want to be sitting there as a Founder, trying to work out a slightly opaque admin process. It was a few clicks to fill out the paperwork because they are already holding all the data. There’s a lot of very niggly things that you have to get right – share price, for example. It’s not hard maths, but it is very important, as if you get it wrong you get into a lot of admin pain.” This is true for funding rounds, just as much as Option Pools. Having a digital Cap Table seems to make a huge difference.
It is interesting to see the parallels between Thalamos’ innovative new software for medical professionals, which empowers the Doctors, and how Arden sees SeedLegals as doing the exact same for Founders. Admin and compliance are unavoidable – essential – no matter how time poor you are. With digital transformation, entrepreneurs and doctors alike are finding they suddenly have the time and headspace to focus on the things that really matter; getting the main job done, as robots begin to take over the maths and the repetitive micro-tasks. It should give us all a little encouragement and hope of a better future, where boring tasks are done by AI and Founders can focus on building brilliant businesses.