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HMRC internal manual

Employment Related Securities Manual

HM Revenue & Customs
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University Spin-outs

Later funding partner admitted – reorganisation of share capital

External funding may only be sought or available when a spin-out has been running for some time. Such a later funding partner may take an equity stake. There may be a reorganisation of share capital with additional shares issued to both the Research Institution and the researchers, as well as the new investor.

Such funding coming in later will be a normal commercial transaction. If additional shares are issued these will be pro-rata to existing holdings, so any benefit to existing shareholders will be balanced by their reduction in value of additional shares already held.