S/EIS Pitch Deck/ Business plan
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Common mistakes to look out for in your business plan

Things to avoid in your business plan for SEIS and EIS Advance Assurance and Compliance

The business plan (also referred to as the pitch deck/investor plan) is a required part of your SEIS/EIS Advance Assurance Application to HMRC and ensuring your business plan meets all of HMRC’s requirements is therefore an important part of your overall application. We have a guide on what to include in your business plan for an SEIS/EIS Advance Assurance Application, this article will cover 6 common mistakes to look out for in your business plan, to ensure the best chance of success with HMRC:

Add a clear product description

This may appear obvious but is often overlooked by founders. It is easy to jump from a problem to a solution without a clear demonstration of what the product is, and what role it plays in fixing the solution. This is crucial as part of HMRC’s requirements relates to the activities carried out by the company. HMRC has a list of “excluded activities” which are exempt from SEIS/EIS relief - this includes banking, insurance, money-lending, debt-factoring, hire-purchase financing or other financial activities. A clear description of the company’s activities is necessary to indicate whether they, or any substantial part of the company’s activities falls within these restrictions. If you're Company does appear to fall into one of these categories without directly being involved in the restricted activity then make sure you address this point in the business plan. For example, if you are a financial technology platform that does not handle people's money and is an intermediary between the consumer and the money handler then you need to clearly state so in the description of your Company activities.

Leasing, lending and licensing companies are also excluded from SEIS and EIS relief. It is worth always specifying how your company does not fall into these categories if it is unclear for HMRC.

Add a SWOT analysis to identify your Risk to Capital

Please see this article here on what is the SEIS/EIS Risk to Capital Condition. This is often overlooked in business plans, as identifying areas of risk within your business or the wider market is typically not something founders will want to focus on.

However, it is worth noting that the business plan you send to HMRC is not the same one you need to show to potential investors, so identifying risks will not deter any potential future funding. We recommend including risks in the form of a Strengths, Threats, Opportunities and Weaknesses analysis (SWOT).

An additional slide in your business plan covering some key bullet points under each of these headings is sufficient.

Have a look at this article here on how to address the SEIS/EIS Risk to Capital requirement in your business plan - a slide template.

Include a breakdown of how you intend to use the investment

A breakdown of what you intend to use the investment for, including details of which work will be outsourced. This is also an important way of ensuring that the amount on the application matches the amount on your business plan. More often than not, the “ask” and details of the intended use of investment are not included in the business plan. It is also worth pointing out that the way the company intends to spend the investment is also part of the risk to capital consideration - if the money is spent on a disqualifying trade, this will invalidate the risk element for investors. For example, if 80% of the money invested is spent on acquiring new property, this will eliminate the element of risk in the application.

Don’t mention any exit strategy

This is something founders will naturally tend to include to make their company more attractive to investors, however it can invalidate your Advance Assurance application as HMRC will see it as de-risking the investment. Exit strategies, buy outs, and potential acquisitions should all be removed from the business plan you send to HMRC.

Don’t mention that you are SEIS/EIS eligible

It is not necessary to mention SEIS/EIS approval on your business plan, however if you do choose to include this, it is essential to note that this is pending approval. HMRC do not like seeing applications that say they are SEIS/EIS approved before they have had the chance to do so. Approval from HMRC can take up to 6-8 weeks, so it is not worth including this and potentially raising queries from potential investors who may wish to see the approval even though it has not yet been approved.

Include your Financial Projections

A chart outlining the projected profit and loss over the next 3 years is required from HMRC. This is also a good indication that the company is financially healthy - however it is also ok to include a negative net profit for the first few years, as HMRC are aware that this is a natural part of a company’s financial growth in its early years. The financial projections can be included as a separate Excel, or within the business plan.


For other articles to help with your business plan and Advance Assurance application, please see below: