Preparing a business to raise money

This section will help you to prepare your business to secure funding from investors or lenders. It will help you to write a business plan, work out whether tax relief may be available for investors, and consider what approvals you need. During fundraising you will need to protect your business information and make sure you and your colleagues have time to complete the process properly. You may also decide to instruct a professional adviser and this section will help you to do so.

How to prepare in advance of raising money

  1. 1.What do I need to think about before looking to raise money for my business?

Business plan

  1. 2.Why is a business plan so important if I am looking to raise finance?
  2. 3.How do I go about preparing a business plan?
  3. 4.How else can a business plan help me to raise money?

SEIS, EIS and VCT tax reliefs for share investors

  1. 5.What are the HMRC schemes which offer tax relief on share investments in small and medium-size companies?
  2. 6.How do the HMRC schemes work?
  3. 7.Will my company be eligible to issue shares under one of the HMRC schemes?

How to decide if shares issued by a company qualify for SEIS, EIS or VCT tax reliefs

  1. 8.How do I decide which HMRC scheme is suitable for my company?
  2. 9.Will I be able to issue shares under the SEIS scheme and what tax reliefs will this offer to investors?
  3. 10.Will I be able to issue shares under the EIS scheme and what tax reliefs will this offer to investors?
  4. 11.Will I be able to issue shares under the VCT scheme?

Applying to HMRC for tax reliefs on a company's shares

  1. 12.How do I apply to HMRC to ensure my shares qualify for SEIS or EIS tax relief?
  2. 13.What is advance assurance in relation to SEIS or EIS?
  3. 14.How do I apply for advance assurance under SEIS or EIS?
  4. 15.How do I submit a compliance statement so that shares my company issues qualify for SEIS or EIS tax reliefs?
  5. 16.When will my company receive authorisation from HMRC that shares it has issued qualify for SEIS or EIS tax reliefs?

Approvals needed to raise money

  1. 17.How do I find out what approvals I need to raise money?
  2. 18.What board approvals will I need to raise money and how do I get them?
  3. 19.What shareholders' approvals will I need to raise money and how do I get them?
  4. 20.What contractual approvals will I need to raise money and how do I get them?
  5. 21.What happens if I do not obtain the approvals I need before my company raises money?

Protecting confidential information and NDAs

  1. 22.What information do I need to protect when raising finance and how do I do this?
  2. 23.How do I put in place a non-disclosure agreement (NDA)?
  3. 24.What does someone who receives business information from me agree to do in signing an NDA?
  4. 25.How will an NDA help me?
  5. 26.What should I do if someone to whom I wish to provide information on my business refuses to sign a NDA?

Protecting business names

  1. 27.What steps should I take if my business trades under a name which is different from my company's?

Protecting intellectual property rights

  1. 28.How do I protect my business's intellectual property rights when approaching potential share investors or lenders?

Information for potential investors and lenders

  1. 29.What information do I need to prepare for potential share investors or lenders?
  2. 30.What information will share investors focus on?
  3. 31.What information will lenders focus on?
  4. 32.How should I organise information I make available to share investors or lenders?
  5. 33.What happens if any information I provide to a share investor or lender is not accurate?
  6. 34.What restrictions are there on how and to whom I disclose information for the purposes of issuing shares?

How much time management will need to spend on a fund-raising

  1. 35.How long will I and other management need to spend on the fund-raising and how do we find the time?

Instructing advisers

  1. 36.Which advisers should I think about instructing if I want to raise money for my business?
  2. 37.Why might I need legal advice?
  3. 38.Why might I need accounting or financial advice?
  4. 39.Why might I need tax advice?
  5. 40.Why might I need corporate finance advice?
  6. 41.How do I decide which particular adviser to instruct?
  7. 42.How do I go about negotiating an adviser's fee?
  8. 43.Should I check an adviser's terms and conditions?

Business plan checklist

Use this business plan checklist to help you create a strong business plan that you can show potential investors to raise funds for your business. A carefully thought out, well presented and persuasive business plan is an important part of any money-raising strategy for your business. It is important that your business plan is comprehensive too. Professional investors will expect it to include information about a variety of things specific to your business: not just your vision, but details of the market, the people involved alongside you and financial details. Download this easy to use business plan checklist to make sure you don’t miss anything important and give your business the best chance of impressing investors and securing funding.
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Financing non-disclosure agreement

Use this template financing non-disclosure agreement (also called an NDA) if you are thinking of disclosing information to a potential investor in your business. You should ask them to sign this agreement before you disclose any confidential information. By using this financing non-disclosure agreement, you protect your confidential information and business. Having this type of agreement in place makes it easier to take a legal claim against the person you disclosed information to if they use it in an unauthorised way. Most of the undertakings in this financing non-disclosure agreement are given by the funder although both of you agree not to disclose details of your discussions. You should be aware that some funders, such as founders of start-ups and early-stage businesses, and crowdfunding platforms, will usually not agree to sign NDAs.
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