SEIS: A Smart Way to Raise Early-Stage Investment in the UK

Raising investment as an early-stage startup can be challenging, but the Seed Enterprise Investment Scheme (SEIS) makes it easier. Designed to support UK startups, SEIS offers significant tax incentives to investors, making your business more attractive to potential backers.

At Canopy Community, we help founders connect with the right investors and navigate funding opportunities, including SEIS-backed investment. Whether you are a UK entrepreneur or a non-UK domiciled founder looking to establish a presence in the UK, this article will explain why SEIS is a valuable tool and how you can access it.

What is SEIS?

The Seed Enterprise Investment Scheme (SEIS) is a UK government initiative designed to encourage private investment in early-stage businesses. It provides generous tax reliefs to investors, reducing their financial risk and making it easier for startups to secure funding.

Under SEIS, startups can raise up to £250,000 in their first two years, and investors can benefit from:

• 50% income tax relief on their investment.
• Capital Gains Tax (CGT) exemption on profits from SEIS shares held for at least three years.
• Loss relief, allowing investors to offset potential losses against other income.

For startups, SEIS funding is a low-risk, high-value way to attract early investors and build momentum.

Three Reasons to Use SEIS as a UK-Based Entrepreneur

1. SEIS Attracts More Investors

Early-stage investors are often hesitant to fund startups due to the high risks involved. SEIS reduces this risk by allowing investors to claim 50% of their investment back as tax relief. This means that if an investor puts £50,000 into your business, they can immediately reclaim £25,000 in tax savings.

Additionally, if your business does not succeed, SEIS provides loss relief, further reducing investor exposure. These benefits make SEIS-backed startups more appealing to angel investors and early-stage venture capitalists.

2. SEIS Funding is Quick and Efficient

Raising capital can take months or even years, but SEIS is designed to be fast and founder-friendly. With the right preparation, startups can secure funding within three to six months, allowing them to focus on product development, hiring, and market entry instead of prolonged fundraising.

At Canopy Community, we have seen many founders successfully close SEIS rounds within a short time frame, ensuring they have the capital needed to execute their early-stage plans effectively.

We strongly recommend using the SEEDLEGALS platform to speed up this process too.  They handle a huge amount of the SEIS funding rounds in the UK and their platform helps speed up the process significantly.

3. SEIS and EIS Can Be Combined for Larger Rounds

SEIS is just the starting point. Once your startup exceeds the £250,000 SEIS cap, you can raise additional funds through the Enterprise Investment Scheme (EIS), which allows startups to secure up to £5 million per year while offering investors 30% tax relief.

By structuring your fundraising strategy to first leverage SEIS and then transition into EIS, you can create a long-term capital-raising strategy, making your startup more attractive to investors at every stage of growth.

Note: Many investment funds that deal in both SEIS and EIS funding will want to have been directly involved in the earlier round before including you in their EIS round.

Can Non-UK Resident Startups Access SEIS?

Yes! If you are a non-UK resident startup, you can still qualify for SEIS investment. However, your business must meet specific UK residency and operational requirements.

Steps to Qualify for SEIS as a Non-UK Founder

1. Incorporate a UK Limited Company – Your business must be legally registered in the UK and maintain tax residency. Most international founders do this by setting up a UK Ltd (Limited) company.
2. Establish a UK Operational Presence – Your startup should have some business activities in the UK, such as an office, employees, or commercial operations.
3. Apply for SEIS Advance Assurance – Before raising investment, submit an SEIS Advance Assurance application to HMRC. This official confirmation reassures investors that your company qualifies for SEIS tax relief.

Many international startups establish a UK entity specifically to access SEIS investment, as it provides an excellent gateway into the UK’s investor community and market opportunities.

If this is something that you'd like to explore, book a session with the Canopy In Residence team today and we can help you begin the process.

Recommended SEIS Funds for Founders

To successfully raise SEIS funding, consider approaching the following investment firms.  We see them as the front runners in the UK when it comes to being fair and Founder friendly:

1. SFC Capital – One of the most active early-stage investors in the UK, offering SEIS and EIS investment across multiple industries.
2. Haatch – A hands-on investor specialising in digital and tech-enabled businesses.
3. Fuel Ventures – A leading SEIS investor focusing on scalable tech startups, including SaaS, e-commerce, and digital platforms.
4. Sapphire Capital – A well-established fund manager offering SEIS and EIS investment solutions with strong compliance support.
5. Jenson Funding Partners – A highly experienced SEIS and EIS investor that backs early-stage businesses across various industries.

These funds have a strong track record of supporting startups and can be a great starting point when raising investment.

Final Thoughts: Why You Should Leverage SEIS

If you are an early-stage founder in the UK, utilising SEIS should be a top priority. The scheme helps you:

• Attract more investors with tax-efficient incentives.
• Raise capital quickly to fuel early growth.
• Create a long-term funding strategy by transitioning into EIS.

For non-UK founders, setting up a UK entity and qualifying for SEIS is a straightforward process and can open doors to investment, market access, and scaling opportunities in the UK startup ecosystem.

At Canopy Community, we help founders navigate the SEIS process, connect with investors, and build sustainable, investable businesses. If you are looking to raise your first round of investment, get in touch with us today.  You can book a session with one of the IN RESIDENCE team to start your journey, or try this course to get yourself up to speed with SEIS and how to become investment ready 

In 2025 Canopy is exploring the idea of raising an SEIS fund for the community.  Read more and get involved with the journey here ----> The Canopy Fund

If you'd like to talk with Rachel or any of the In Residence team at Canopy go to THIS LINK