How to Run a Seed Round
Timeline, Process & Playbook
A step-by-step playbook for UK founders raising angel or seed investment. When to raise, how to build your list, the outreach sequence, legal process, and the deal killers to avoid.
Are You Ready to Raise?
Most founders raise too early. The single biggest predictor of a failed round is insufficient preparation — not lack of investor access, not bad timing, not the market. Before you start outreach, run through this checklist.
You have a clear problem hypothesisRequired
Not just an idea — you can articulate the problem with specificity, name who suffers from it, and explain why existing solutions fail.
You have early customer validationRequired
At minimum: 10+ user interviews, a waiting list, letters of intent, or early revenue. Raising without any validation is raising a prayer, not a round.
You have SEIS/EIS advance assuranceRequired
Most UK angels expect this before writing a cheque. Apply early — HMRC takes 6–8 weeks. Not having it halts conversations with SEIS investors.
You know your use of fundsRequired
Be specific: '£300K for 2 engineers + 18 months runway to hit £50K MRR' beats 'growth and hiring'. Show what the milestone is and why this amount gets you there.
You have a compelling deckRequired
10–15 slides covering: problem, solution, market, model, traction, team, competition, financials (3-year projection), ask, and use of funds.
You can name your ideal investors
Raising blindly into the market is inefficient. Know your top 20 targets, their sector focus, and why they'd be a good fit.
UK Seed Round Timeline: 3–6 Months
Preparation
- —Finalise pitch deck and one-pager
- —Get SEIS/EIS advance assurance (apply 6–8 weeks before you plan to close)
- —Build target investor list (BackerIQ, Crunchbase, referrals)
- —Prepare financial model and data room
- —Brief existing shareholders and advisors
Warm-up outreach
- —Start with warm intros — ask advisors, angels, and founder friends for referrals
- —Book 5–10 'soft' investor conversations to pressure-test your pitch
- —Refine deck based on early feedback
- —Identify who in your network can intro you to your top 10 targets
Active round
- —Run 3–5 investor meetings per week
- —Follow up within 24 hours of every meeting
- —Keep a CRM — track stage, last contact, and next step for each investor
- —Create artificial momentum: 'We have £150K committed and are looking to close the round by [date]'
- —Negotiate and issue terms once you have 2+ verbal commitments
Legal and close
- —Agree heads of terms with lead investor
- —Engage startup solicitor for SHA and subscription agreement
- —Complete due diligence (Companies House, IP, employment contracts)
- —Issue share certificates and update cap table
- —File SH01 at Companies House within one month of allotment
- —Apply for SEIS3/EIS3 certificates from HMRC post-close
Building Your Target Investor List with BackerIQ
The quality of your investor list determines your conversion rate more than almost anything else. A list of 50 angels who have actually invested in your sector will outperform 200 random names every time.
BackerIQ searches Companies House data to find serial angel investors in the UK. You can filter by sector, investment recency, and portfolio size to find the angels most likely to invest in a company like yours.
A good target list has three tiers:
Tier 1: Dream investors (5–10)
Angels or syndicates with a direct track record in your space. You or someone you know has a warm connection. These are the names you prepare tailored, personalised outreach for.
Tier 2: Strong fits (15–20)
Angels with adjacent sector exposure or relevant operator backgrounds. No warm connection, but genuine fit. BackerIQ data helps here — you can identify investors who've backed 3+ companies in your sector even if they don't appear in press.
Tier 3: Broad outreach (20–30)
Active UK angels with a good portfolio who fit your stage and investment size. Personalised but template-based outreach. Expect 10–20% response rate.
The Outreach Sequence: Cold Email to Term Sheet
A structured sequence keeps your pipeline moving. Most deals die from lack of follow-through.
Day 1 — Cold email or intro
2–3 sentences max. Reference their portfolio, state your one-line pitch, mention SEIS/EIS eligibility and round size. Attach a one-pager (not the full deck). Ask for a 20-minute call.
Day 7 — Follow up if no reply
One short nudge. 'Wanted to make sure this didn’t get buried — happy to share a quick summary if helpful.' If no reply to the follow-up, move on.
Call / first meeting
Don’t send the deck before. Walk them through it live so you can answer objections in real time. End with a specific next step — never leave a meeting without an agreed action.
Deck + data room
Send full deck and data room link within 24 hours of the call. Include your financial model. Use a link (not an attachment) so you can see if they’ve opened it.
Follow up — week 2
Chase with a specific update: new customer, another investor committed, MRR growth. Give them a reason to move, not just a reminder to decide.
Verbal commitment
Get a clear yes on amount and instrument. Confirm round closing date. Say you’ll send draft terms.
Terms and legal
Issue the ASA or term sheet. Give a deadline — 7 days to sign is reasonable. Engage your solicitor to prepare final documents.
The Legal Process: Heads of Terms to Completion
Heads of Terms
Non-binding summary of the round terms (valuation, amount, instrument type, key investor rights). Usually 2–4 pages. Agreed before legal work begins.
Due Diligence
Investors review your cap table, IP ownership, employment contracts, SEIS/EIS advance assurance, financial statements, and any material contracts. Typically 2–4 weeks.
Shareholders' Agreement
The main legal document governing investor rights: information rights, anti-dilution (if any), drag-along, tag-along, pre-emption, board composition. Drafted by your solicitor.
Subscription Agreement
The document investors sign to actually invest. Sets out the shares being issued, the price, and warranties given by the company.
Completion
Funds received, shares allotted, Companies House filings made (SH01 within 1 month), share certificates issued.
SEIS/EIS Claims
After completion, apply to HMRC for SEIS3/EIS3 compliance statements. Investors use these to claim tax relief on their returns.
What Kills Deals
Valuation expectation mismatch
Asking for a £5M pre-money valuation with no revenue and a first-time founding team. Angels will pass silently rather than negotiate down.
Fix: Research comparable raises. Ask advisors what's realistic. Price the round to close, then raise your next round at a better price.
Weak or incomplete founding team
A solo technical founder with no commercial co-founder, or vice versa. Missing a critical domain expert for a regulated sector.
Fix: Hire advisors, bring on a co-founder, or at minimum have clear plans for the key hire and allocate part of the raise to making it.
No traction
Raising on slides alone. Even £1K MRR, 500 waitlist sign-ups, or 3 LOIs fundamentally changes the conversation.
Fix: Delay the raise until you have something concrete. Consider a friends-and-family round first to get to a proof point.
Raising too slowly (sequential conversations)
Talking to investors one at a time, waiting for each to decide before approaching the next. This kills momentum and takes 12+ months.
Fix: Run parallel conversations. Target 20+ investors simultaneously. Create urgency by having a round close date.
Unclear use of funds
'Marketing and hiring' tells an investor nothing. They need to know what milestones this money achieves.
Fix: Be specific: headcount, runway months, key metric targets. Model it in a simple spreadsheet and share it.
Missing SEIS/EIS advance assurance
UK angels who use SEIS/EIS (most of them) will pause or walk away if you don't have advance assurance. It's a red flag about how prepared you are.
Fix: Apply before you start outreach. It's free, and HMRC will give you a reference number to share with investors.
Frequently asked questions
How long does a UK seed round take?
Typically 3–6 months from starting outreach to money in the bank. Well-connected founders with strong traction can close in 6–8 weeks. First-time founders without a network should budget 6 months. The legal process alone takes 4–6 weeks once you have verbal commitments — don't assume you can close immediately after getting a yes.
Should I use a lead investor?
Having a lead investor (someone who sets the terms and often does due diligence on behalf of the round) makes everything easier. Other angels often wait to follow a lead before committing. A lead investor gives credibility to the round. You can offer a slight incentive to the lead — e.g. board observer rights or a slightly lower valuation cap on their ASA — in exchange for anchoring the round.
Should I approach VCs at seed stage?
Most UK VCs focus on Series A (£2M+) and above. Exceptions include seed-focused funds like Seedcamp, LocalGlobe, Episode 1, and Forward Partners. If you approach a VC at pre-seed, frame it as a relationship-building conversation rather than an ask. Getting on their radar early — then raising from angels and returning with traction — is often a more effective path than trying to close a VC seed round directly.
Do I need to disclose my other investor conversations?
You are not obliged to disclose specific names, but creating credible (and accurate) social proof is legitimate. 'We have £100K committed from two angels and are looking to close the round in the next 6 weeks' is fair. Fabricating competing offers or misrepresenting investor interest is a misrepresentation and can void the investment agreement.
What should go in my data room?
Core documents: pitch deck, financial model (3-year projection), SEIS/EIS advance assurance letter, cap table, CVs of founders, incorporation documents, any IP assignments, employment contracts for key hires, and your most recent 12 months of bank statements or management accounts. Keep it organised in a shared folder (Google Drive or Notion). Don't gate it — send it freely once you have a meaningful conversation.
How do I build my investor target list?
Start with who you know. Then use BackerIQ to search for angels who have invested in your sector — you can filter by portfolio size, activity recency, and sector concentration. Cross-reference with LinkedIn to find mutual connections. Add angels who have publicly invested in your direct competitors (they understand the market). Target 30–50 names so that you have enough pipeline even if 60–70% don't respond.
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