Investor ready does not mean having a good pitch deck. It means that when someone decides they want to invest, nothing in the company stops them.
The distinction matters because the second thing is where rounds actually collapse. Founders spend months on the narrative and no time on the structure, and then lose four weeks in diligence to a problem that would have taken an afternoon to fix a year earlier.
Rounds are rarely won on structure and are frequently lost on it.
The cap table
Every share ever issued, to whom, in what class, with what rights, and evidence that it was properly authorised and paid for.
The recurring problems are not exotic. Shares promised in conversation and never issued. Shares issued without a board resolution. A leaver whose shares were never dealt with. An advisor holding equity on terms nobody wrote down. Options promised to employees that do not exist in any document.
Each is straightforward to fix while the company is small and increasingly awkward as it grows. None of them is something you want to be explaining during diligence.
The articles and shareholders' agreement
These decide whether your shares qualify for SEIS and EIS, and most founders have never read them properly.
The specific risk is preference. SEIS and EIS shares must be ordinary and full risk, with no preferential rights to dividends, no liquidation preference and no redemption. Preference is often created inadvertently when a new class with lesser rights is introduced.
Articles taken from a template and amended by someone who does not know the schemes are a common source of this. So are articles drafted by a corporate lawyer who was not told the company intended to raise under SEIS.
Advance assurance
Most experienced angels and every fund will ask for it. It takes about two to three weeks and needs at least one named investor who has agreed to invest, so it sits early in a round rather than at the end.
It also functions as a diagnostic. Preparing the application forces someone to look properly at the trade, the cap table, the articles and the use of funds, which is how structural problems get found while they are still cheap to fix.
The option pool
If you have told anyone they have equity, that promise needs to exist as a document.
EMI is the tax advantaged route and the limits improved considerably from April 2026: gross assets up to £120 million, fewer than 500 employees, £6 million of unexercised options across the company, and a fifteen year exercise window. A number of companies that had outgrown EMI now qualify again.
The gap between telling someone they have options and them holding a valid EMI option is where most schemes go wrong. Investors will ask, and "we have promised about ten per cent to the team" is not an answer that survives diligence.
R&D claims
This cuts both ways in diligence. Unclaimed relief is money left on the table, which an investor will notice. Aggressively claimed relief that would not survive an enquiry is a liability an investor will price in or ask you to indemnify.
First time claimants have six months
A claim notification form must reach HMRC within six months of the end of the period of account. Missing it invalidates the claim entirely, with no discretion to accept it late.
Companies House and statutory records
Filings up to date. Confirmation statement filed. PSC register accurate. Registered office correct. Allotments filed on time.
This sounds trivial and it is, which is exactly why it signals something when it is wrong. It is the cheapest possible way to look competent, and the cheapest possible way not to.
The data room
Assemble it before you need it, not during diligence. Incorporation documents, articles, shareholders' agreement, cap table, board minutes, share certificates and allotment filings, option scheme documents, advance assurance correspondence, key contracts, IP assignments from every founder and contractor, employment contracts, accounts and management information.
The IP assignments deserve particular attention. Work done by a founder before incorporation, or by a contractor without a written assignment, may not belong to the company. This is discovered in diligence with some regularity and is genuinely difficult to fix at that point.
What good looks like
An investor decides to invest, asks for the data room, and finds everything in it. Their lawyer raises three questions rather than thirty. Advance assurance is already in place. The cap table reconciles to the filings. Nobody has to go looking for a document that does not exist.
That is not an impressive achievement. It is the absence of problems, which is precisely the point.
Planning to raise in the next twelve months?
- You have promised equity to people without documenting it
- Your articles have never been reviewed against SEIS or EIS
- You are unsure whether past R&D claims would survive an enquiry
- You have no data room and no idea what should be in it
The work is cheap while the company is small and compounds in difficulty with every round, every hire and every promise made in a conversation rather than a document.
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This article sets out the general position and is not advice on any particular set of facts. Thresholds and rates are those applying at the date of publication.