Raising investment requires more preparation than ever before. Today’s investors are conducting 20+ hour due diligence processes on early-stage companies, with the average time from seed to Series A now stretching over two years.
Most founders focus on perfecting their pitch deck while ignoring the fundamentals that actually matter. They chase meetings with VCs before they’re ready, burning through valuable connections and missing obvious opportunities.
The result? Failed fundraising rounds, damaged relationships, and months of wasted time.
On the other hand, successful founders understand that fundraising preparation begins months before you need the money.
They structure their companies correctly, qualify for SEIS or EIS tax reliefs, and develop systems that demonstrate investor readiness. By the time they’re in the room, most of the work is already done.
Here’s how to prepare properly for raising investment, with the specific legal and tax considerations that many guides miss.
Understanding Investment Tax Incentives: SEIS and EIS
Before you even think about approaching investors, you need to understand some important and lucrative tax incentive schemes.
These aren’t nice-to-have extras – they’re essential for attracting investment. Approximately 90% of angel investors have utilised SEIS or EIS, with 80% of their portfolios comprising these schemes.
SEIS: For Very Early Stage Companies
The Seed Enterprise Investment Scheme is specifically designed for companies in their infancy – those that are less than three years old, have minimal assets, and a small number of employees.
SEIS qualification offers the most generous tax reliefs available to investors, making your startup immensely more attractive than its non-qualifying competitors.
To qualify for SEIS, your company must have fewer than 25 full-time employees and gross assets under £350,000. You must be carrying out a qualifying trade in the UK and cannot have received EIS or VCT funding previously.
SEIS allows you to raise up to £250,000 total, with individual investors able to invest up to £200,000 per tax year. The incentives are strong, as investors get 50% income tax relief, capital gains tax exemption on profits after three years, and loss relief if things go wrong. For investors, this can effectively halve the risk of early-stage investing.
EIS: For More Established Startups
The Enterprise Investment Scheme caters to companies that have moved beyond the initial startup phase but still need growth capital. EIS is perfect for businesses that have outgrown SEIS limits or need larger funding rounds to scale their operations.
Companies can raise up to £5 million per year under EIS, with a lifetime limit of £12 million (or £20 million for Knowledge Intensive Companies). Individual investors can invest up to £1 million per tax year and receive 30% income tax relief on their investment.
The qualifying criteria are less restrictive than SEIS, making it suitable for more established startups with proven traction. EIS can be used alongside other funding sources and doesn’t have the same stringent asset limits as SEIS.
Getting Advance Assurance
One of the biggest mistakes founders make is assuming their company will qualify for tax reliefs without getting official confirmation.
Advance assurance from HMRC removes this uncertainty and gives investors confidence that their tax benefits are secure.
The critical point many founders miss is timing. If you want to use SEIS, you must do it before raising EIS funding.
Once you’ve taken EIS investment, you can’t go back to SEIS. This sequencing is permanent and non-reversible, so plan your funding strategy accordingly.
The advance assurance process takes 4-6 weeks and requires detailed information about your business model and growth plans. While it might seem like bureaucratic overhead, it’s invaluable for investor confidence and can make the difference between a successful and failed fundraising round.
Legal Structure and Corporate Housekeeping
Most investors expect to see a private limited company with a clean corporate structure.
This isn’t just about preference – it’s about avoiding complications during due diligence that can kill deals weeks into the process. Poor legal preparation is one of the fastest ways to derail promising investment discussions.
Essential Corporate Documents
Your corporate foundation needs to be built for investment from day one, not retrofitted when you start fundraising. The standard template documents that work for simple businesses become major obstacles when you need to accommodate investor rights and preferences.
The standard model articles of association won’t work for investment – you need bespoke articles that accommodate preference shares, drag-along rights, and board representation.
Your shareholders’ agreement should outline how the company will be governed, what happens if someone wishes to sell shares, and how decisions are made.
Share registers must be accurate and up-to-date, with proper share certificates issued. Investors will scrutinise your cap table, and any discrepancies will raise red flags about your attention to detail.
Professional legal advisors experienced in startup funding will ensure these documents are properly prepared and avoid common pitfalls.
Common Legal Mistakes That Kill Deals
Even experienced entrepreneurs make legal mistakes that surface during due diligence and torpedo otherwise strong deals. These issues are entirely preventable with proper preparation, but fixing them mid-fundraise is expensive and time-consuming.
Essential legal requirements investors always check:
- Founder vesting schedules properly implemented with shares subject to time-based vesting
- Intellectual property ownership clearly assigned to the company from all employees and consultants
- Employment contracts that protect confidential information and include appropriate restrictive covenants
- Share option schemes properly documented and HMRC approved where applicable
- All regulatory licences and permits current and in good standing
Clean corporate structure demonstrates professionalism and speeds up due diligence, while messy legal affairs can derail promising deals even when the business fundamentals are strong. The investment in proper legal preparation pays dividends throughout the fundraising process.
Financial Preparation and Due Diligence Readiness
Investors will examine your finances in detail, and the due diligence process now typically takes weeks to months.
Having your financial house in order before you start fundraising isn’t just about compliance – it’s about telling a compelling story with numbers that demonstrates your understanding of your business.
Management Accounts and Financial Records
Professional financial reporting distinguishes serious businesses from hobby projects in the minds of investors. Your management accounts need to tell the story of a business that’s tracking toward success, not just recording what happened in the past.
Management accounts for at least the last 12-18 months should be professionally prepared and show clear revenue trends, cash flow patterns, and key performance metrics. These aren’t just for investors – good management accounts help you understand your business better and make better decisions.
Financial projections for the next 3-5 years require detailed assumptions that investors can thoroughly examine. The hockey stick growth curve without supporting logic is an immediate red flag.
Instead, build bottom-up forecasts that show how you’ll acquire customers, what they’ll pay, and when you’ll reach profitability.
Key Metrics Investors Always Examine
Having the right metrics tracked and ready is essential for fundraising preparation. Investors want to see that you understand your business fundamentals and can demonstrate sustainable growth potential through concrete numbers, not just projections.
Financial metrics you’ll most likely need to track and present:
- Monthly recurring revenue (MRR) growth and churn rates for SaaS businesses
- Customer acquisition cost (CAC) and lifetime value (LTV) ratios with payback periods
- Monthly burn rate and runway calculations with scenario planning
- Unit economics showing gross margins and contribution margins per customer
- Cash conversion cycles and working capital requirements
Start tracking these metrics at least six months before fundraising. Maintaining consistent month-over-month tracking in your management accounts demonstrates that you run a data-driven business, one that’s ready for growth capital.
Preparing Your Investment Materials
Your pitch deck is important, but it’s not the only material investors need. The most successful fundraising processes provide comprehensive materials that tell your story clearly and anticipate investor questions.
Different investors require varying levels of detail, so having a comprehensive suite of materials ready demonstrates professionalism.
The Essential Pitch Deck
Your main presentation should be concise but comprehensive, telling your story in a logical sequence that builds toward the investment opportunity. Most investors see dozens of decks weekly, so clarity and brevity are essential.
Here’s an example structure:
| Slide | Content | What Investors Want to See |
| 1-2 | Problem & Solution | Clear evidence of real market pain and your unique solution |
| 3-4 | Market Size & Opportunity | Total Addressable Market (TAM) – the entire market size if you captured 100%. Serviceable Addressable Market (SAM) – the portion you can realistically target. Use bottom-up calculations, not generic market research figures |
| 5-6 | Business Model | How you make money today, your pricing strategy, and clear path to profitability |
| 7-8 | Traction & Validation | Concrete metrics showing customer demand – revenue, users, partnerships, pilot customers |
| 9-10 | Team & Experience | Relevant track record showing you’ve solved similar problems before |
| 11-12 | Financial Projections | Revenue forecasts built from customer acquisition assumptions, not hockey stick guesses |
| 13-15 | Funding Requirements | Specific use of funds (£X for sales, £Y for product) and what milestones you’ll hit |
Keep each slide focused on one key message. Investors should understand your opportunity within the first few slides and see clear evidence you can execute on it by the end. Avoid using industry jargon and ensure that a smart person outside your sector can follow your logic.
Supporting Investment Documents
Beyond your core presentation, prepare additional materials that provide depth for investors who wish to delve further. Having these ready shows you’ve thought through the investment comprehensively.
Additional materials that strengthen your case:
- Executive summary covering the key points in 2-3 pages
- Detailed financial model that investors can interrogate and stress-test
- Product demonstrations or technical documentation if relevant
- Customer references and case studies showing product-market fit
- Term sheet outline showing the type of investment you’re seeking
The goal isn’t to overwhelm investors with information, but to provide everything they need to make an informed decision at whatever level of detail they require.
Your Fundraising Success Checklist
Getting ready for fundraising isn’t just about creating a pitch deck – it’s about having every aspect of your business investor-ready months before you need the money.
Use this checklist to make sure you haven’t missed anything critical that could slow down or derail your funding round:
| Category | Task | Timeline | Why It Matters |
|---|---|---|---|
| Tax & Legal | SEIS/EIS advance assurance from HMRC | 4-6 weeks before fundraising | Essential for investor tax relief |
| Articles of association updated for investment | 2-3 weeks | Standard model articles won’t work | |
| Shareholders’ agreement drafted | 1-2 weeks | Defines governance and investor rights | |
| Founder vesting schedules implemented | Before fundraising starts | Investors expect founder commitment | |
| IP ownership assigned to company | Before fundraising starts | Prevents deal-killing issues | |
| Financial | Management accounts (12-18 months) | Ongoing monthly | Shows business trends and health |
| Financial projections (3-5 years) | 2-3 weeks to prepare | Must have defensible assumptions | |
| Cap table current and accurate | Always up-to-date | Investors scrutinise ownership | |
| Key metrics tracking | 6+ months history | Proves you understand your business | |
| Materials | All documents organised and accessible | 1-2 weeks | Shows operational competence |
| Pitch deck (12-15 slides) | 2-3 weeks to perfect | First impression with investors | |
| Executive summary (2-3 pages) | 1 week | For busy investors | |
| Customer references prepared | Ongoing | Validates product-market fit |
Raise Investment With Help From Double Point
At Double Point, we can help startups prepare for successful fundraising.
From securing SEIS and EIS advance assurance to implementing professional management accounts and structuring investor-ready corporate documents, we help founders build the foundations that attract investment.
Our clients understand that proper preparation isn’t just about compliance – it’s about demonstrating the professionalism and attention to detail that investors expect from scalable businesses.
Book a consultation with us today to discuss how we can help prepare your business for successful fundraising.
