Angels, VCs, corporate VCs and private equity, and the UK schemes that matter.

Not all investors want the same thing. Picking the right type for your stage and ambition matters as much as picking the right person. Our post on business angels, VCs and PE covers the history; this is the short version.

Types of investor

SEIS and EIS

The Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS) give UK taxpayers income tax relief for investing in qualifying young companies. They are a big reason UK angels invest early, so many angels will only invest if your company qualifies.

• SEIS. For the very earliest rounds. Investors get 50% income tax relief. A company can raise up to £250,000 under SEIS, and must be less than three years into trading, with gross assets of no more than £350,000 and fewer than 25 employees.
• EIS. For later early-stage rounds. Investors get 30% income tax relief, and gains on the shares can be free of Capital Gains Tax if held for at least three years. There are annual and lifetime limits on how much a company can raise, higher for knowledge-intensive companies.
• Advance assurance. Apply to HMRC before you raise so investors know the company should qualify. It is not a guarantee, but most angels expect it.
• Watch the details. Some trades are excluded, and the way the money is used and how the shares are structured matter. Take advice before agreeing terms such as preferences.

Rules and limits change. Check the current guidance on GOV.UK and with an accountant before you rely on them.

Government-backed investment

The British Business Bank does not usually invest in companies directly. It backs funds that do, including regional funds such as the Northern Powerhouse Investment Fund in the North of England, and commitments to venture funds through British Patient Capital. For tech founders outside London these regional funds are often among the first institutional money available. Our ecosystem maps list the funds and networks active in each area, and our post on where Manchester fits into UK and European funding markets gives the wider picture.

Choosing the right investor

• Match their stage and cheque size to your round.
• Match their return model to your likely exit. See the power law.
• Check what else they bring: customers, hiring, sector knowledge, follow-on money.
• Speak to tech founders they have backed.

General information, not financial, legal or tax advice. Figures marked as rules of thumb vary by fund, sector and market conditions.