Raising from angels in the UK is a different game to raising from institutional VCs. Angel investors are typically putting in their own money – not managing a fund – which means their relationship with risk is deeply personal. That’s precisely why SEIS and EIS matter so much when you’re pitching to them.

These two government-backed schemes don’t just make your startup eligible for investment – they actively change the risk-reward equation for the person writing the cheque. Understanding how to use them well can be the difference between a warm reception and a polite pass.

Why angels care so much about SEIS and EIS

UK angel investors who invest through SEIS or EIS receive significant tax relief on their investment. Under SEIS, an investor can claim back 50% of their investment as income tax relief. Under EIS, that figure is 30%. In both cases, any gains on the shares are exempt from Capital Gains Tax after three years, and if the investment fails, investors can claim loss relief against their income or capital gains.

Put simply: SEIS and EIS reduce the effective cost of investing in your startup. A £20,000 SEIS investment effectively costs the investor £10,000 after tax relief. That fundamentally changes what a reasonable risk looks like – and it means the threshold for a “yes” is lower than it would be without the scheme.

SEIS or EIS – which one applies to you?

If your startup is less than three years old, has fewer than 25 employees and holds gross assets under £350,000, you’re likely in SEIS territory. SEIS lets you raise up to £250,000 under the scheme and is specifically designed for very early-stage companies.

Once you’ve grown past those thresholds – or used up your SEIS allowance – EIS is the natural next step, covering raises of up to £5 million per year with broader eligibility criteria.

It’s common for startups to use both schemes across different raise stages. Many founders raise SEIS first, then return to the same (or new) investors with an EIS round as the business develops.

Getting Advance Assurance before you pitch

One of the most practical things you can do before your angel round is apply for HMRC Advance Assurance. This is HMRC’s pre-approval confirming that your company and the proposed investment structure qualify for SEIS or EIS relief.

Most experienced angels will ask about it before committing. Having Advance Assurance in place tells investors the tax benefits they’re counting on are confirmed – removing a significant source of uncertainty from the conversation. Without it, you’re asking investors to take your word for something HMRC hasn’t signed off on yet.

The application isn’t complicated, but it does take time – often several weeks – so apply before you start serious investor conversations, not during them.

How to use SEIS and EIS in your pitch narrative

SEIS and EIS eligibility should be featured explicitly in your investor materials. Don’t bury it in the appendices. When pitching to angel investors, make it clear early on whether you have (or are applying for) Advance Assurance, which scheme applies and what the tax relief looks like for a typical investment size, and whether there’s still headroom under the scheme or whether it’s close to being used.

Experienced angels know this information and will ask for it. First-time or less experienced angels may not – but framing it clearly signals that you know how the ecosystem works and that you’ve made it easy for them to say yes.

Using SEIS and EIS alongside other fundraising tools

SEIS and EIS don’t have to stand alone. Many early UK raises use Advanced Subscription Agreements (ASAs) or Convertible Loan Notes (CLNs) as the vehicle through which the investment is made – with SEIS or EIS relief applying to the converted shares once the next priced round completes.

Getting the structure right from the outset matters. A poorly structured SEIS raise – where shares are issued incorrectly or compliance paperwork isn’t completed – can result in HMRC rejecting the relief claim, which is something no angel investor wants to hear six months after writing a cheque.

Make it easy for investors to say yes

The UK angel investment community is active and well-organised. There’s genuine appetite to back early-stage startups – particularly those raising through SEIS, where the tax incentives are strongest. Founders who turn up prepared, with Advance Assurance in hand and a clean structure ready to go, make the process significantly easier for everyone involved.