Stephen Crowe answers
your common ESIC questions
Early Stage Investor
So, we are now getting down to some detail and I’m glad for the question. Founders are potentially eligible as an ESIC investor; however, there are some rules, as you would expect around this stuff.
An ESIC investor, so a person contributing new capital into a company, can’t own more than 30% of that company to qualify for these ESIC benefits. So if you contributed capital and you owned less than 30%, as a founder, that is well and truly considered an eligible investment.
You have raised a very interesting question and that is, what is this ESIC stuff about?
ESIC is a dynamic status. It’s measured at a point in time and that point in time is when you issue shares. So if you guys are thinking about issuing share, you need to be ESIC at each time you issue shares, so it’s not a static status in that sense. It’s all in your circumstance, you would have to be ESIC on 30 June, your company that you’re investing in, and on 1 July. And they could be totally different outcomes. You could be one and not the other, not the one, and then the other. So it’s very much dependent on these circumstances on whether you’re ESIC or not.