10 Finance, Accounting & Tax Tips Every Tech Founder Should Know (Seed–Series C)

This is for UK tech founders from Seed to Series C who want to avoid common finance, accounting, tax and fundraising mistakes as they scale. Many of the issues you’re dealing with right now are ones we see repeatedly and advise on every day.

Martin Brennan, Founder and CEO
Onside Accounting

I’m 10 years into working with tech startups and have supported 300+ founders, typically from Seed to Series C. Over that time, I’ve seen how much easier fundraising, tax planning and due diligence become when finance decisions are made early and in the right order - and how often avoidable issues can be sidestepped with the right approach.

If any of the following apply, this will be an interesting read:

• you’re fundraising in the next 12 months
• you’re thinking about your first finance hire
• you’re attracting investors using SEIS or EIS
• you’ve got meaningful cash sitting in the bank
• you want due diligence to feel effortless
• you’re building something genuinely technical and seeking an advance in science or technology (i.e. R&D qualifying)

1. Raise at the right time, not when you need to

If you only fundraise when you need cash, you’re fundraising from weakness. That’s when valuations compress, terms get less founder-friendly, and you burn months trying to “save” a round.

The best companies raise when:

• the partner is right
• the terms are good
• the business has momentum
• they still have real runway

A few recent learnings I’ve picked up from some of the best founders I’ve worked with:

• saying yes to an exceptional term sheet can be rational even if you don’t “need” the money today
• oversizing a round can force premature hiring and messy spend/poor capital allocation
• cash strength buys optionality, speed, and credibility, not survival
• being unquestionably liquid makes hiring and strategic matters easier to execute

Two mistakes I see a lot:

• overestimating what you’ll raise - be conservative until term sheets are signed and do not spend until the money hits
• assuming VCs will fund pre-revenue “potential” – the landscape has changed. Today they typically want traction, revenue, or a clear and credible pathway to revenue and/or profit

If you’re planning a raise, treat investor-readiness like an ongoing programme, not a last-minute sprint.

2. Your first finance hire should rarely be a full-time CFO

Hiring a full-time CFO too early is one of the most expensive mistakes I see. Not because CFOs aren’t valuable, but because there often isn’t enough true CFO-level work to justify the cost. A full-time CFO should lead the finance function, not be the finance function.

The opposite mistake is hiring a junior finance person with no oversight. That’s how weak reporting and poor controls quietly creep in, and probably a demotivated staff member lacking a mentor.

For many Seed to Series B companies, the best first hire in my experience is a Financial Controller-type:

• qualified and strong on reporting
• solid across AP, payroll, and the day-to-day
• experienced enough to handle investors and board expectations

One reason founders like working with Onside is flexibility. You can access different levels of finance expertise as you scale, and if you need CFO-level support, we can layer in Fractional CFO input without prematurely hiring a full-time CFO.

3. SEIS and EIS can blow up if you get the order wrong

SEIS and EIS are powerful tools. But founders underestimate how easy it is to lose eligibility, especially once money starts moving quickly. The repeat issue we see is sequencing mistakes that breach conditions such as the gross assets test, which can disqualify SEIS.

As a rule of thumb:

• SEIS first
• then EIS
• then larger or institutional funding later

If angels are expecting SEIS relief and you lose eligibility, it’s a painful conversation that could have been avoided with planning and the right advice.

To understand more about why EIS, SEIS and EMI matter for UK startup founders and investors, click here for our article "Helping shape the future of UK entrepreneur tax reliefs" which also has a useful download.

4. Treasury – Don’t leave all cash in one place

Remember the SVB panic? If you’ve raised money and all your cash sits in one bank, you’re creating a single point of failure. Practical moves:

• diversify across banks
• consider treasury tools where appropriate to reduce risk and improve returns

Bonus point - compliance can materially improve cash. Many tech startups are eligible for VAT refunds and R&D tax credits, and filing early can make a meaningful difference.

5. Company secretarial mistakes are due diligence killers

Companies House filings are not to be experimented with. If your Companies House filings don’t match your cap table, share option exercises, and documents like shareholder or investors agreements, due diligence gets slow and awkward very quickly.

Everything filed sits on the public record and carries legal weight. Fixes are rarely “quick”, and errors can take serious time and cost to untangle. Some even require a court order!  The most common issues we see are:

• Companies House filings not reflecting the real cap table
• option grants and allotments not properly documented
• share classes and shareholder agreements misaligned
• paperwork that doesn’t match the accounting records

Clean company secretarial makes diligence smooth. That’s what you want.

Working through any of these right now?

We support tech founders from Seed to Series C across fundraising prep, SEIS/EIS, R&D, and finance leadership.

→ Speak to Onside today or check out our client testimonials page here

6. Payroll: accuracy over innovation

There are exciting new tools, but early-stage providers often get to “great” by learning on their early customers. Payroll is too important for that.

Look for:

• reliability
• clean pension integration
• good finance system integration
• proven compliance

If you’re going to switch payroll, April is the cleanest time. Mid-year moves create avoidable complexity.

7. Tell your advisors early and life gets easier (and cheaper)

The best founders build an ongoing advisory relationship, not a last-minute rescue call.

Typical examples:

When advisors hear late, we often see:

• messy clean-up work under time pressure
• opportunities missed
• preventable red flags in due diligence
• rushed explanations to investor questions
• higher professional fees than necessary

The earlier we know, the more we can help you move faster and reduce risk.

8. R&D is valuable, but it’s full of nuance

R&D relief can be hugely valuable for technical companies, but the detail matters. Low-quality providers and cheap services often miss nuance, which can lead to underclaiming or unnecessary risk.

A simple example - some travel costs can qualify in specific circumstances when incurred personally and reimbursed, but only if correctly structured and evidenced.

If you’re R&D qualifying, it’s worth treating R&D as an ongoing workstream. At Onside we encourage founders to stay close to our R&D tax team during the year, documenting R&D projects as they go along, so the claim is both maximised and defensible rather than trying to fix everything at year-end.

The scrutiny landscape has tightened, so poorly evidenced claims can result in enquiries, creating distraction and friction in due diligence. Working with an experienced team helps maximise value while keeping the claim robust and defensible.

9. You can outsource finance, but you can’t outsource understanding it

You don’t need to be an accountant, but you do need a working understanding of:

• profit and loss
• balance sheet
• cash flow

The best business decisions come from founders who have an accurate understanding of their business finances. They spot problems early, allocate resources confidently, and move the business forward based on facts rather than estimation or guesswork.

Be curious. If your understanding of the business doesn’t match what the numbers show, dig in early. If something feels off, talk to us.

10. Profit or loss and cash are different metrics and both matter

One of the most important finance concepts for founders is that profit and cash are not the same thing. Your bank balance tells you what cash you have today, but your accounts are prepared under accrual accounting, which is the reporting standard we’re required to account under.

Accrual accounting matches income and costs to the period they relate to, not simply when cash moves. That’s why you’ll see items that affect profit but not cash, and vice versa. Depreciation reduces profit but doesn’t reduce cash. Annual software subscriptions or insurance might be paid in one month but are typically spread over 12 months. When you recognise revenue, it will often differ from when cash is collected.

That’s why founders need to track both in parallel. Cash burn and runway show how long your funds will last, while profit or loss indicates whether the business is genuinely making money and whether the model is sustainable.

If you’re fundraising, planning SEIS/EIS, thinking about a finance hire, or want a sanity check on any of the above, get in touch!

Author: Martin Brennan, Founder and CEO, Onside Accounting

You will find Martin Brennan on LinkedIn where he regularly posts useful insights for founders, startups and scale-ups.