Section V of 8
A worked annotated example
Section IV said what a strong application contains. This section shows one.
The pages that follow render a complete SEIS advance assurance application for a representative early-stage company. The covering letter, the application form's free-text answers, the use-of-proceeds breakdown, and the risk-to-capital statement are reproduced in full. Marginal annotations on each page point to the specific test, the substitution principle, or the audit page that explains why each choice was made.
The company in the example is fictional. The structure of the application is not. It mirrors the form most successful SEIS advance assurance applications take in practice, and uses the fitness-platform archetype that has been threading through the earlier sections of this Playbook – so the reader who has followed the example from Section II onwards will recognise the same business showing up here in finished form.
Read the document column first as a real applicant would, top to bottom. Then read the annotations in the margin. The point of the section is the relationship between the two: every clause in the covering letter, every line on the use-of-proceeds table, every sentence of the risk-to-capital statement is doing identifiable work against a specific HMRC test. Strong applications are the ones where every reader of the document – founder, lawyer, caseworker – can identify which clause does which job.
The applicant in this example
Studio Pulse Technologies Ltd.
- Trade
- Develops and licenses a proprietary software platform used by independent fitness studios for class scheduling and membership billing.
- Incorporated
- 14 March 2023, in England and Wales.
- First sale
- 2 November 2023 (first paying customer, £79 monthly subscription).
- Founders
- Two co-founders, each 50% ordinary shareholders. No prior round, no external investors.
- Trading position
- 28 paying studios as of February 2026, monthly recurring revenue approximately £2,400.
- Round being raised
- £250,000 SEIS for engineering hiring, customer acquisition, and market expansion over the next 18 months.
This is a clean case. The trade is qualifying without ambiguity. The use of proceeds is qualifying without carve-outs. The share class is plain ordinary with no preferences. The control position is straightforward. The pages that follow show what the application for this company looks like – and where each piece of it does its work.
i. The covering letter, annotated
Re: Application for advance assurance under the Seed Enterprise Investment Scheme
Dear Sir or Madam,
Studio Pulse Technologies Ltd. (the "Company") develops and licenses a proprietary software platform used by independent fitness studios in the United Kingdom for class scheduling and membership billing.1 The Company seeks advance assurance under the Seed Enterprise Investment Scheme in respect of a proposed share issue of £250,000.2
The Company carries on a qualifying trade. Its sole activity is the development, hosting, and licensing of the Studio Pulse software platform to independent fitness studios on a monthly subscription basis. The Company does not deal in land, commodities, financial instruments, or any other excluded activity. Revenue is generated exclusively through per-studio subscription fees paid by the studio operator; the Company does not intermediate, hold, or take a percentage of any customer payments processed through the platform.3
The proceeds of the proposed issue will be used to fund growth and development of the qualifying trade. Approximately £150,000 will fund the hiring of three engineers to accelerate development of the v3 release of the platform; approximately £75,000 will fund paid customer acquisition through digital channels and an early sales hire in the UK and Ireland; the remaining £25,000 will cover associated operating costs over the eighteen-month deployment window. No part of the proceeds will be used to acquire shares in any other company, to repay loans, to fund the buy-out of any shareholder, or for any other non-qualifying purpose.4
The shares to be issued are ordinary shares of £0.0001 each, fully paid up in cash on issue, ranking pari passu with all existing ordinary shares as to dividend, voting, and return of capital on winding-up. No preferential rights, no rights of redemption, and no arrangements for repurchase or pre-arranged exit attach to the shares.5
The Company is an independent UK-resident company incorporated in England and Wales, with its registered office and operational premises in London. The Company has not at any time been controlled by another company, has no qualifying subsidiaries, and is not party to any arrangement under which control would pass on the share issue.6
The Company's growth and development objective is to become the operating system of choice for independent fitness studios in the UK and Ireland. The proceeds of this round will fund the build-out of the v3 platform release, which adds inventory management and revenue analytics to the existing scheduling and billing functionality, and the acquisition of the first 150 paying studios in the target markets. The investor's capital is at material risk: the platform has limited operating history, with twenty-eight paying studios at the date of this application; the Company has approximately fifteen months of operating runway at planned spend; and the Company will need to raise a further round to reach profitability. The principal risks the Company is managing are slower-than-projected studio adoption in a category that has not yet adopted SaaS at scale, longer enterprise sales cycles than modelled, and the possibility that incumbent point-of-sale providers respond aggressively to entrants.7
The Company is within the relevant scheme limits. It is unquoted, has gross assets of approximately £68,000 immediately before the proposed issue, and has nine full-time equivalent employees. The Company was incorporated on 14 March 2023 and made its first commercial sale on 2 November 2023. No prior SEIS, EIS, or VCT investment has been received.8
The supporting documents enclosed with this application are the Company's current articles of association, the cap table as at the date of this application, the business plan, the financial model, and the pitch deck. We confirm that the version of the articles referenced in this application is the version currently filed at Companies House and that no amendment is pending.9
We should be grateful for HMRC's confirmation that the Company qualifies for the issue of SEIS-eligible shares as described above.
Annotations
- 1
The trade, in plain English.
Opening with the qualifying activity rather than the "journey" or the mission. The caseworker has the trade locked before they reach the next sentence.
- 2
Scheme and amount named immediately.
No hedging, no "approximately", no "around". The application is for SEIS, for £250,000, on a specific date. Cross-references implicitly to Tests VI (age), VII (size), and IX (prior funding).
- 3
Excluded activities pre-emptively named and rejected.
Listing the categories the trade is not in is more powerful than asserting the trade is qualifying. The last sentence closes the marketplace-ambiguity trap without using the trigger phrase "take a percentage". The positive framing – does not intermediate, hold, or take a percentage – is the substitution-table replacement for the avoided drift toward transactional language.
- 4
Use of proceeds: three line items, time horizon, exclusions.
Specific cost categories tied to growth activity. The final sentence ringfences against the non-qualifying-purpose failure modes by name.
- 5
Share class spec, verbatim.
This sentence appears identically in the application form and is consistent with the articles filed at Companies House. Three "no" clauses cover liquidation preference, redemption, and pre-arranged exit.
- 6
Independence and UK nexus.
Covers Tests V and VIII in one paragraph. The "has not at any time" phrasing is deliberate: HMRC reads independence from incorporation onwards, not just the present position.
- 7
The risk-to-capital paragraph.
Notice the structure: growth objective first, risk-to-capital second. The risks are specific to this company (twenty-eight paying studios, fifteen months runway at post-issue team size, named competitive threats) not generic. The phrase "at material risk" is deliberate; HMRC reads for it on the substance test.
- 8
Polish tests, in one paragraph.
Unquoted, gross assets, FTE count, age, prior funding – Tests V, VI, VII, IX. Where each is well within the limit, naming the actual number rather than just "within limits" gives the caseworker something concrete to verify against.
- 9
The supporting document list, plus the Companies House confirmation.
Naming the documents enclosed is administrative. The second sentence is the substantive one – pre-empting the articles-vs-filing mismatch failure mode named in Section IV's "practical step worth taking". This is not a polite extra; it is the recommended habit, and the place to do it is in the covering letter itself.
ii. The application form, annotated
Free-text answers · SEIS advance assurance form
Studio Pulse develops and licenses a proprietary software platform used by independent fitness studios in the United Kingdom for class scheduling and membership billing. Revenue is generated through monthly per-studio subscription fees paid by the studio operator. The Company does not intermediate payments, hold client funds, or earn revenue from any source other than software subscriptions.10
Approximately £150,000 to fund hiring of three engineers to accelerate v3 platform development. Approximately £75,000 to fund paid customer acquisition and an early sales hire in the UK and Ireland. Approximately £25,000 for associated operating costs over the 18-month deployment window. No part of the proceeds will fund acquisitions, debt repayment, secondary share purchases, or any other non-qualifying purpose.11
Ordinary shares of £0.0001 each, fully paid up in cash on issue, ranking pari passu with all existing ordinary shares as to dividend, voting, and return of capital on winding-up. No preferential rights. No rights of redemption. No arrangements for repurchase.12
2 November 2023.13
Annotations
- 10
Trade description: substantively identical to the covering letter.
Same nouns, same structure. The third sentence is the consistency anchor – it preempts the marketplace/payments drift specifically, in language that aligns with both Test I and the substitution table. The repetition is deliberate. Founders should not feel obliged to rewrite in fresh words for the form; verbatim consistency is the discipline, not a failure of effort.
- 11
Use of proceeds: also identical to the covering letter.
The three line items in the form match the three line items in the letter, in the same order, with the same proportions. The ringfence sentence appears in both.
- 12
Share class: identical wording to articles and covering letter.
This is the field where most inconsistency creeps in. Drafting once and copying verbatim into the form, the letter, and the articles is the only reliable way to keep all three aligned.
- 13
First commercial sale: a single date, verifiable.
Not "late 2023", not "around November". The date is corroborated by the financial statements and the business plan, which both reference the same first paying customer. Three-document consistency check passes.
iii. The use of proceeds breakdown, annotated
| Line item | Amount | % of raise |
|---|---|---|
| Senior backend engineer, 18 months | £58,000 | 23.2% |
| Mid-level backend engineer, 16 months | £48,000 | 19.2% |
| Frontend engineer, 14 months | £44,000 | 17.6% |
| Engineering subtotal14 | £150,000 | 60.0% |
| Commercial lead (first sales hire), 14 months | £38,000 | 15.2% |
| Paid digital channels, UK & Ireland | £22,000 | 8.8% |
| Events, partnerships, content | £15,000 | 6.0% |
| Customer acquisition subtotal15 | £75,000 | 30.0% |
| Cloud, tooling, insurance, professional fees | £25,000 | 10.0% |
| Operating costs subtotal16 | £25,000 | 10.0% |
| Total SEIS proceeds | £250,000 | 100.0% |
No part of the proceeds is allocated to acquisitions, secondary share purchases, debt repayment, capital expenditure on tangible assets other than operational tooling, or any other non-qualifying purpose. All proceeds will be deployed within the 18-month window above, satisfying the three-year SEIS deployment requirement.17
Annotations
- 14
Engineering at 60%: clearly growth spend.
The line items map to identifiable hires by role and deployment length. HMRC can verify the headcount against the financial model's hiring plan. Reads as growth and development of the qualifying trade unambiguously.
- 15
Customer acquisition at 30%: also clearly growth.
Three identifiable channels rather than a single "marketing" line. Specific markets named. The category total is well within the bounds of what HMRC reads as legitimate acquisition spend for a growth-stage trade.
- 16
Operating costs at 10%, all software-related.
Cloud, tooling, insurance, professional fees – no tangible capital assets. The asset-spend cap concern (Section II, Test II) is well clear; nothing on this list could be read as a recoverable asset that defeats risk-to-capital. The asset-light shape of the spend reinforces both Test II and Test IV in a way that an asset-heavy round would not.
- 17
The ringfence and the deployment-window confirmation.
Two sentences doing distinct work. First, the non-qualifying-purposes list is named explicitly and rejected. Second, the deployment window is confirmed against the three-year SEIS rule. Both pre-empt the most common Test II failure modes.
iv. The risk-to-capital statement, annotated
The Company's growth and development objective is to become the operating system of choice for independent fitness studios in the UK and Ireland, reaching 150 paying studios by month 18 from this round and 600 by month 36, supported by the v3 platform release and a paid acquisition programme in the named markets.18
The investor's capital is at material risk of partial or total loss. The Company has limited operating history, with twenty-eight paying studios at the date of this application generating approximately £2,400 in monthly recurring revenue. The Company is not profitable and has approximately fifteen months of operating runway at the planned deployment rate on the post-issue team size. The Company will require a further round of investment before reaching profitability, and the terms and availability of that round are not assured.19
The principal commercial risks the Company is managing are: slower-than-projected adoption of SaaS platforms by independent fitness studios in a category that has not historically used software at scale; longer studio sales cycles than the financial model assumes; competitive response from incumbent point-of-sale providers as the Company gains traction; and the dependence of the v3 release timeline on the engineering hires being made on the planned schedule.20
The Company is managing these risks through: a direct-sales-led acquisition model designed to compress the studio decision cycle; competitive differentiation on integration with the studio's existing class scheduling habits rather than displacement; a hiring plan that begins recruitment immediately on issue; and a financial model that has been stress-tested at 60% of projected monthly studio adds without breaching runway.21
Annotations
- 18
Growth-and-development objective with numbers.
Not "we plan to grow significantly". A specific target (150 studios by month 18, 600 by month 36) with the activities that drive it named.
- 19
"At material risk" – the phrase the test reads for.
Followed by three specific factors (limited history, runway position, dependence on a future round) that ground the claim. No hedging.
- 20
Four named principal risks.
Each specific to this company in this market at this stage. Generic risk language ("market conditions", "competition") would defeat the substance test. The named risks are the ones a thoughtful investor would also raise.
- 21
Risk management without overclaim.
The reframe from Section II in action: four specific actions, none of which claim to eliminate the risk. The "60% stress-tested" model is the kind of concrete number that lands as substance rather than boilerplate. Notice what is absent: no de-risked, no recession-proof, no capital-protected. The robustness is in the actions named, not in the adjectives applied to them.
What this whole example demonstrates
The application above will be approved on the merits of the underlying business, but it will be approved quickly because the documents do not give the caseworker anything to reconstruct. Every test has a paragraph. Every paragraph has a verifiable claim. Every claim is consistent across every document. The covering letter, the form, the use-of-proceeds table, and the risk-to-capital statement read as four projections of the same underlying truth.
This is the standard the rest of this Playbook has been pointing at. It is not unreachable. It is the result of building the application in the order Section IV specified, running the language audit from Section III, and answering each of the nine tests from Section II in turn. A founder who works through this process will produce something that looks substantively like the example above, fitted to their own company.
One caveat. Studio Pulse is a deliberately clean case: a single qualifying trade, no excluded-activity side streams, no group structure, no prior funding to reconcile. Most real applications carry at least one complication. The right way to use this example is as the baseline shape; where a real case differs – a minor excluded side stream, a ringfenced non-qualifying spend, a prior SAFE to disclose – that complication is addressed explicitly in the covering letter and the form, rather than glossed. Section VI covers those edge cases in more detail.
The strongest applications are the ones where every clause does identifiable work, and every claim is verifiable against the document next to it.