Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Growth capital definition

What does Growth capital mean? Growth capital (also called development capital or growth equity) describes minority or non‑control investment used to fund a company’s expansion—such as new products, market entry, acquisitions or working capital—without a change of control. It is a market term, not defined in legislation or case law, and is used consistently across England and Wales, Scotland, Northern Ireland and Ireland. In legal practice, growth capital is typically structured through a subscription for ordinary or preference shares, or occasionally convertible instruments or loan notes, documented by an investment/subscription agreement, updated articles and a shareholders’ agreement. Key features include investor protections suited to a...

UK tax reliefs for individual investors in start-ups and early-stage companies: SEIS, EIS, VCTs, investors’ relief, interest and share loss relief, and IHT business property relief

Published by a LexisNexis Tax expert

Practice notes

This Practice Note outlines the principal UK tax reliefs potentially available to individuals who supply seed or venture finance to unconnected start-up and early-stage companies. These backers typically inject capital across successive funding rounds and often insist that key people active in the business also join those rounds by subscribing for shares in the company. For analysis of the tax consequences linked to shares taken up in this manner, see Practice Notes: Tax and Growth capital—management shareholdings and Tax and growth capital—tax reliefs available to managers.

Seed and Venture capital

Unquoted businesses generally need investment at each phase of their growth, from formation through to the point the enterprise is well established and profitable. Companies frequently seek backing from the private equity and venture capital sector, where external Investors provide finance in exchange for an equity interest in potentially high growth companies. Large private equity funds often choose not to take a bet on start-ups or companies at the earliest stages of development, preferring instead to invest in businesses that have moved beyond the start-up and early phases and are seeking to expand and develop, or in businesses that continue progressing through later stages of growth and development beyond initiation...

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Web page updated on 22/05/2026

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