Ask the Collective
The questions independent drinks founders ask most — answered. Distilled from years of community knowledge so the good stuff never disappears in the feed again.
What legal documentation and compliance process should we follow for seed funding, including SEIS/EIS approval?
Members strongly recommend using **Seed Legal** for the documentation side—multiple members cited it as saving "so much fucking time, hassle and money." If you're in a co-founder situation, it's worth having someone review the model articles to protect both founders. For the investment process itself, members have taken two main approaches: - **DIY with professional support**: Handle the investment process in-house (issuing share application forms, applying for SEIS/EIS approval with HMRC), then engage your local accountant for the company secretarial work. You'll need a business plan, UTR, and financials to submit to HMRC. Your accountant can then issue shares, prepare board minutes, file with Companies House, and complete the follow-up SEIS/EIS paperwork with HMRC. Members report this is "quite a cheap approach." - **Startup lawyer route**: Some members use a dedicated startup lawyer for templates and guidance, though this is typically more expensive than the accountant-led approach. **Key requirements for SEIS/EIS approval**: Business plan, UTR (Unique Taxpayer Reference), and financial projections. The HMRC follow-up paperwork is noted as tedious—delegating this to your accountant is strongly recommended. Consider having legal eyes on co-founder protections via articles of association, even if using Seed Legal for the main documentation.
Do founders need to disclose personal directors' loans when raising SEIS or EIS funding?
Yes, personal directors' loans must be disclosed when raising SEIS or EIS funding. This is both a legal and practical requirement. **How disclosure happens:** - **SeedLegals** — directors' loans and their conditions appear as part of the formal disclosures letter required during the fundraising process - **Balance sheet** — the loans are shown in your company's financial statements, which investors will review - **Seedrs** — when you drill into the detailed information on Seedrs (a common platform for these rounds), personal investment details are visible **Legal basis:** Directors have a fiducial duty to disclose any loans they have made to the company and the terms attached to them. This is a formal obligation, not optional. **Why this matters:** Members noted that disclosure can highlight disparities between founder skin-in-the-game and investor cash contributions, which investors will factor into their decision-making. One member reflected on the difficulty of equating years of unpaid work against cash investment, but the consensus was that transparency is required regardless.