There’s been an update to the rules since this post, please go here afterwards.
If your company is eligible for the Seed Enterprise Investment Scheme, the scheme allows you to raise a maximum of £150k.
If you want to raise more than 150k, you can use the Enterprise Investment Scheme as well. Using both schemes, you can raise up to £5m. (More info on these caps here.)
You must use SEIS before using EIS; you can’t do it the other way around.
You can raise the total funds you need in one go, providing that:
1. You take care on how you hold the cash and the timing of the share issues
You must have spent at least 70% of the SEIS funds before issuing the EIS shares and using EIS funds.
You must be able to demonstrate this – consider holding the SEIS funds in a separate account, so they do not get confused with other company money or revenues.
2. You carefully document receipt of the EIS funds
You may not be able to use the EIS funds for a number of months due to the 70% rule. There is a risk that the money would therefore be considered a loan. In such circumstances, the investor would not be eligible for tax relief under EIS.
You should have a subscription document that clearly states the terms under which the money is being invested.
For info on when the company and its shareholders can claim EIS & SEIS after raising investment, go here.