Advance Subscription Agreement

An advance subscription agreement (ASA) lets an investor pay money to the company now, in return for shares that the company must issue later – normally when the next priced funding round happens, and in any event by a long-stop date. Unlike a convertible loan, the money is never repayable and earns no interest, so the shares can qualify for SEIS or EIS if the other conditions are met.

• When you need funds before a priced round is ready
• When investors want SEIS or EIS relief (a convertible loan will not qualify)
• For bridging between rounds with a short, clear long-stop date

• Complete the parties, the Schedule 1 investor details and the key commercial terms (Discount, Valuation Cap, Long Stop Valuation)
• Set the Long Stop Date no more than six months after signing
• Ideally apply for HMRC advance assurance before signing
• Use Schedule 2 to check the conversion maths