How does Instant Investment work?
Instant Investment allows the company to be agile by getting permission in advance to take additional funding up to an agreed amount without the need for additional permissions from investors and shareholders. Even if you haven’t been given permission in advance, Instant Investment can still work for you and we’ll even help you get your permissions.
Step 1: Select the Instant Investment product
This can be found under Funding (on the left hand side of our platform) > Instant Investment. See image below.
Step 2: Complete your Instant Investment overview
This includes confirming the following: the instant investment amount, the share class, the scheme this falls under (e.g. SEIS), price per share, and a target close date.
Step 3: Filling out your key deal terms
This is a straightforward set of questions which is used to build your Instant Investment Agreement, here you can confirm how much you are raising in total across all Instant Investments and whether investor consent and preemption are needed or if you can use the Express Lane. You will confirm the date of your last Shareholders Agreement, confirm bank details and add any additional items if you need to.
Step 4: Create an investment proposal letter
This is an optional letter to send to your investor to summarise their investment, and is free to create.
NOTE: If you are not using the Express Lane you will need to send out your Investor Consent Notice and Preemption Notice as part of this step if required.
Step 5: Instant investment agreement & Sharing Existing Documents
The Investment Agreement is the document that your investor will need to sign. Please note: if you had a Shareholders Agreement in your last funding round then this document will also need to be signed by a witness, see this article for more.
You then need to share the Shareholders Agreement, Articles of Association and Disclosure Letter from your last round with this new investor.
Step 6: Close your Instant Investment
Here's what to do next now that the Instant Investment Agreement is signed:
1. Fill out the Funds Tracker to confirm when the Investment is received. This will help accurately date the SH01 and Share Certificates
2. Create and Sign your Board Resolution, you will need to commence a board meeting in accordance with your Articles of Association, a Director needs to sign the Board Resolution.
NOTE: If you are not using the Express Lane you will also need to circulate the Shareholder Resolution. Share this with your existing shareholders, it needs to be signed by at least 75% (by number of shares held) of the voting shareholders.
If you specified that you're doing multiple Instant Investments then this will cover the value of all of them, so you'll only need to do this step once.
3. Create and sign your SH01 form
Step 7: Final checks!
- Make sure your Investment Agreement is fully signed and your new investor has seen the Shareholders Agreement, Articles of Association and Disclosure Letter from your previous round
- Check that your Board Resolution and Shareholder Resolution are circulated and signed before you sign the Investment Agreement and receive the funds.
- Check that the date on the SH01 matches the date the funds were received.
Step 8: Post completion
Time to issue the Share Certificate to your Investor and update Companies House!
- Download, print and post the SH01 (and Shareholder Resolution if you have one) to Companies House
- Hit Issue share certificate at the bottom of your Instant Investment page to archive the Instant Investment and create the new Share Certificate
- Sign the new Share Certificate by going to Cap table > Share Certificates. Here is an article on how to issue share certificates.