How much is the discount if you work at Target?

How do rolling closes work in UK seed rounds?

• In the US, convertible debt is commonly used and the mechanism for rolling close e.g. rounds in which you start taking the money before the total target is committed, is to give early investors a discount proportional to the extra time needed to close. In the UK, seed rounds typically involve ordinary shares so how does this work?

• Answer:

  UK seed rounds involving angels typical issue ordinary shares on which angels get heavy tax-relief. One of the guiding principles of SEIS is no convertible debt. This means you need to price the round up front and you can't offer convertible discounts to early investors to "sweeten the deal". If you're raising more that £150k, say £300k, one thing you can do is to fix the price per share for the round and offer early investors first dibs on the better tax relief e.g. close the first £150k of SEIS-eligible shares first. You would also ask these investors to wave their preemption rights.