Understand each part before considering the whole.
Start with your circumstances
Consider the amount of capital you can afford to lose, your existing investments and the time you can leave money invested. Early-stage investing should be considered within a wider financial plan.
Look beyond one business
Exposure to a range of companies, sectors and funding years may spread risk. Diversification does not guarantee a return or prevent losses. Correlated risks can still affect many businesses at once.
Understand deployment and fees
A subscription date may differ from the dates money is invested in underlying shares. Charges can apply at investor, fund or company level. Ask how fees affect the capital invested and the value of relief.
Plan for uncertainty
Exits are uncertain and irregular. Further funding, changes in strategy and company failure are common risks. Understand how reporting, corporate actions and follow-on investment decisions will be handled.
Keep records and review
Retain subscription documents, tax certificates and updates. Monitor the business and your exposure, while recognising that a review may not create an ability to sell. Use professional advice for tax and financial planning.
Write down your research framework
Use a consistent set of questions for each business: customer demand, revenue model, operating costs, management, financing and share terms. Record uncertainties as well as strengths. A written framework makes it easier to distinguish evidence from enthusiasm. Consistency is useful even when the businesses are very different.
Plan how you will follow progress
Think about which updates would help you understand the company after investment. Revenue, cash runway, customer concentration and delivery milestones may be useful, depending on the business. Review what has changed from the original assumptions rather than relying on valuation headlines. Monitoring creates understanding; it does not guarantee an ability to sell.
Go to the official source.
Use HMRC’s guidance for current eligibility requirements, reliefs and claim procedures.
Read the HMRC guidance ↗︎Your next useful question.
Which part of the business, investment structure or tax position do you still need to understand? Record that question before seeking further information.
Keep a research checklist ↗︎A question about Building an EIS portfolio?
Tell us what you would like explained. Your details and question are recorded for the team to review.
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What is EIS?
Start here if the Enterprise Investment Scheme is new to you. Follow the journey from subscribing for shares to understanding why both business quality and tax conditions matter.
Inside this guide
- How a share investment works
- Company and investor conditions
- The documents to keep
SEIS explained
A closer look at the earliest stages of enterprise. Understand the different uncertainties of seed-stage businesses and the conditions behind the scheme’s headline relief.
Inside this guide
- What seed-stage funding supports
- Runway and future funding
- Conditional relief and holding periods