T1 Extension- 3rd party Venture Capital funding

[rayuk]

Anyone relying on 3rd party venture capital funding have got their T1 extension successfully made?
At the time of my initial T1 Entrepreneur application I was required to show £50k in funding either available to invest/ invested. My business has been made offers by venture capital firms.

While applying my T1 in Mar 2013 I had just above £10k in my personal bank account which I showed as available to invest, then invested in Feb'17 as Directors' Loan and £40k that was already invested in past. I am having the business since Jun 2011 (on PSW). Over the past years we have also had above £200k invested in VC funding. Company is profitable with 4 employees. HO had refused my initial application (timeline as below):

Mar 2013: T1 Ent application made
Apr 2013: Application refused by HO
Nov 2013: Successfully appealed the decision
Mar 2014: My second appeal successful
20 Nov 2014: Got my 3 year leave to remain

As I am now applying for extension application, I want to be clear on the rules and any help here is appreciated. I have 2 queries as below:

1. As I have relied on 3rd party VC funding in past is it best to stick to the same (there is a tick box - No evidence needed if you showed the investment having made as part of previous successful application)
2. Or should I loan the Company another £40k as Director loan, will that make the extension application somewhat safer... or could this contradict the basis of 3rd party investment that was successfully appealed before.

The 18 months going through the appeal when I as well the business remained in limbo was extremely detrimental to growing a venture. I wish this wont happen again to anyone! Help if you have suggestions...

[marcnath]

Few questions:
1. When you showed access to funds initially, was it your personal funds or VC funding ? You mention you showed 10K in your personal account - what about the remaining 40K that was already invested - what evidence did you provide ?
2. You have over 200K VC funding - I assume these are invested in their name i.e. shares or loans from the VC. And not in your name - is that correct ?

[rayuk]

1. When you showed access to funds initially, was it your personal funds or VC funding ?
£10K of personal funds and remaining 40K was invested in VC funding evidenced through submission of Accounts and a letter from a Director of the VC fund.

2. You have over 200K VC funding - I assume these are invested in their name-
Correct and in way of share capital in Connect-In ltd. of which I am a Director and majority shareholder.

[marcnath]

1. When you showed access to funds initially, was it your personal funds or VC funding ?
£10K of personal funds and remaining 40K was invested in VC funding evidenced through submission of Accounts and a letter from a Director of the VC fund.

2. You have over 200K VC funding - I assume these are invested in their name-
Correct and in way of share capital in Connect-In ltd. of which I am a Director and majority shareholder.

1. Since your approval was on the basis of VC funds I believe you have to continue and submit evidence on that basis. There have been updates to the documents needed from the VC, so go through the guidelines carefully.
2. The additional investment has no additional contribution to the investment evidence, so there is no need to provide evidence on that. It will help your genuine entrepreneur test, though

[rayuk]

Many thanks for the suggestions here, appreciated!

As this is an extension application the evidence to show money having been invested is in Company accounts though the application form states - No evidence needed if you showed the investment having made as part of previous successful application.

I plan to submit below docs:

Unaudited Financial Managent Reports (Q1-Q3 2017)
The Annual Returns (AR01) 2013-14-15-2016
Business Bank Statements (2013-2017)

[marcnath]

Many thanks for the suggestions here, appreciated!

As this is an extension application the evidence to show money having been invested is in Company accounts though the application form states - No evidence needed if you showed the investment having made as part of previous successful application.

I plan to submit below docs:

Unaudited Financial Managent Reports (Q1-Q3 2017)
The Annual Returns (AR01) 2013-14-15-2016
Business Bank Statements (2013-2017)

- balance of 10K in your personal account is definitely not invested, only access
- the 40K by VC does seem to qualify as money invested (and hence does not need evidence). However, the requirements for VC funding has become more stringent since you applied. And this was one strange change which they made retrospective - so you need to go back and provide some additional documents which were not needed at that time.
- I also notice that you started the company in 2011 but applied for the visa in 2013. Under immigration rules, you "joined" an existing business. It is not a major issue, but the job creation evidence needs some additional evidence.

[rayuk]

Thanks for the tips. Yeah the balance £10k was access at time of application and definitely require proof. I will produce my DLA and bank statements. YE accounts show this loan too. Only thing I can think of is this was invested in Mar'14 while my appeal was still ongoing. Possibly do not make a difference.
I see there is a lot of new requirement to VC funding in 41-SD and 46-SD. I had already sent HO a letter from the head fund manager of VC firm tho. was not needed at that time.
As I understand from Table 5 and the Rules no new evidence for the £40k investment evidence need be produced with an Extension application?
Wrt to Job Creation it needs accountants letter I am hoping to get along with payslips, RTIs etc.

[rayuk]

Also, can @marcnath or someone experienced shed some light on the below statement:
I am coping-pasting from sec 41-SD (b)(3)
which should apply in my case as it is a private angel syndicate and an Investment Bank that invested in our venture (not listed):

"If the source of funds was not one or more UK Seed Funding Competitions listed as endorsed on the Department for International Trade pages of the GOV.UK website or one or more UK Government Departments, or Devolved Government Departments in Scotland, Wales or Northern Ireland, this investment can be shown in the accounts as being made in the name of the investing entity, if the accounts are supplemented by a letter from Department for International Trade pages of the GOV.UK confirming that this investment was made on behalf of the applicant'

-> Does this mean the letter must come from the Angel investment fund/DIT/ the accountant following some template format from DIT? ...seems quite confusing

[marcnath]

Page 47 in the guidance includes:
However, if you are claiming points for money previously invested by a venture capital firm, you must supply the additional evidence detailed in the Additional evidence for venture capital funding section.
I believe this applies to you. And that additional evidence is more than a letter.
I have found this requirement quite strange, so it might be worth checking with an immigration expert.
I can't find 41-SD (b)(3) under the latest immigration rules. Are you looking at an earlier version ? The clause is 46-SD (b)(3) in the current version.
I don't think this applies to you. I understood 46-SD(a)(iv) is what applies to you.

[rayuk]

@marcnath you're surely right, that requirement is strange/ confusing one and I will try check that with a lawyer. Also my bad, I meant 46-SD (not 41-SD) in previous post.
I will be checking in more detail but my understanding is 46-SD-a-iv is not applying as:
'...and has not been awarded points in a previous application for having those funds available, he must provide a letter as specified in paragraph 41-SD(c)(iii)' - in my previous application points were already applied for these funds.

These rules are indeed complex! A relief to have such a forum here...

[rayuk]

I have made a Cover Letter to enclose with my application (soon due) and would much appreciate if expert members here can comment if my interpretation of the Rules 6A and requirements Table 5 of Appendix A is correct/ suggestions very welcome.

@marcnath I found a sample CL in one of your post, I cannot thank you enough!
I hope our knowledge of this complex process can help a lot more applicants.

<<<<<Cover Letter>>>>>>>
UK Visas and Immigration
------

Date 15 Nov 2017
Dear Sir/Madam,
Enclosed is the application for my _____________.
I believe this application is straightforward, but I would like to clarify and expand on the application where there was some unclarity about the application.

Section xx - English language
I am claiming exemption from providing evidence, based on the Tier 1 Guidance which states:
“You can also meet the English language requirement, without the need to provide evidence, if you were last given permission to stay in the UK:
- under Tier 1 (General), Tier 1 (Graduate Entrepreneur), Tier 1 (Post-Study Work) or Tier 1 (Entrepreneur) and are applying for an extension of leave to remain;”
As someone with the last permission as a Tier 1 (Entrepreneur), I would like to claim the points for this without providing evidence.

Section xx - Investment of £50,000
I am claiming exemption from providing evidence for part of the funds already invested as part of my previous grant of leave to remain, based on the Tier 1 Guidance which states:
“If you provided evidence of the funds as part of your last successful application you do not need to provide that evidence again” subsequent PBS immigration rules 6A, Table 5 of Appendix A
The applicant has invested, or had invested on his behalf, not less than £200,000 (or £50,000 if, in his last grant of leave, he was awarded points for funds of £50,000) in cash directly into one or more businesses in the UK.

In my case I had £40,000 of my required £50,000 already invested and I enclose the evidence to demonstrate the further investment of £10,000 as a Director’s Loan (incl. bank transaction).

Section xx - Job Creation
My company has had the following employees for at least 1 year or above (5 employees)
I am providing evidence for the most recent period (Oct’16 - Oct’17) for 2 employees:
1. Accountant's Letter (if available)
2. Employee Hours
3. RTIs (Last 12 Months)
4. Employees Payslips (Last 12 Months)
5. P60's
6. P45's For Leavers
7. P11
8. P32

Genuine Entrepreneur Test – I believe the documentation included is sufficient to pass this test. But, here are a few additional points that support the same.
Most recent Purchase Order for £55,000 (dated Oct’17) from one of my key clients along with signed Distribution Agreement made with the customer (an industry leader in our trade)
Signed agreement/ term sheet of first investment made in my Company in 2013: £40k
Signed agreement/ term sheet of second investment made in my Company in 2014: £40k
Offer letter/ agreement of Innovate UK grant awarded to my Company in 2014: £60k
Multiple other funding offers/ investments made incl. by Scottish Investment Bank into my Company between 2014- 2017: above ca. £200k
Previous year Corporation Tax return showing corporation tax paid £xxxx.00 on declared profits of the Company
Business bank statements showing continued business activities (2014- 17)
Press releases related to business awards (2014- 17)
My trade partners customer and suppliers are located in USA, China, in Europe & Switzerland and I am required to travel to these locations on business with short notice (evidence of contracts in place is attached).

I trust the application is complete in all respects and look forward to an early decision on the same as my work requires me to travel frequently.
I may be contacted at nnnnnnn or xxx@yyy.com for any further information/clarification.

[marcnath]

Looks good.

As I mentioned before, it appears you "joined" an existing business for T1E purposes. So, in addition to accountant's letter, you are expected to provide employment records for 12 months before you "joined". Not sure how you can produce it, so it is best to cover that off in the cover letter to show that you are aware of this rather senseless requirement (I am sure you can use better language ). Anyway, I expect you have created two new jobs since your visa grant, so you can use that date as your before and after.

[rayuk]

Thanks, I have now checked this rule and updated to somewhat different wording:

Based upon the guidance notes, it may appear I have joined an existing business and you are expected to provide employment records for 12 months before I "joined". However, as I am founder and first Director of the Company this evidence is not feasible as jobs could not have existed before a business exits'.

Yes, I am showing required details of the created two new jobs latest 2016-17 since visa grant. Thanks, though: this senseless requirement you mention seems as more correct wording

[rayuk]

To keep posted on the Timeline:

16 Nov 2017: T1E Extension Application Submitted
21 Nov 2017: Fee deducted
26 Nov 2017: Biometrics completed
16 Dec 2017: Complex letter dated rec. 22 Dec (Xmas present!)

Obviously disappointed to receive this letter, still hopeful I will hear something in Jan.
I have an Urgent travel meeting business customer at an industry congress out of UK in Feb'18 where I am due to present. Is there a way to ask to expedite with UKVI. Fingers crossed.

Anyone else with complex letter managed to get anything with 2-3 months?

Thanks!

[BK14]

RAYUK,

I had a similar case of you the only difference was, it was a new Business.

I did not include the venture capital funding evidence since I had already claimed the points in my previous application (VC funds available to invest in initial application), but the CW still picked that up furthermore he could not see the CAR attached to my accounts and the last was the 3 months RTI missing because of my accountants software issues though an explanation letter was sent and records could be cross-checked with payslips etc.

The case was still rejected, nevermind I had to send an AR so let's see what happens now but what I have learned from all the cases is 'it depends which idiot CW you get'.

I saw a post earlier that someone wishes to travel to see his ailing mother and his application is in process, who on earth has created this law to restrict someone to meet his immediate family especially when someone is that serious. If they put themselves in our shoes they can probably see what one has to go through on a daily basis because of their incompetence.

Anyways, I wish someone should take a stand and sue the Home Office for such idiotic decisions. Though I wish you good luck and I very much hope you hear from them soon.

[rayuk]

BK14,

I hope your case will progress correctly from here on, very much hope for you. We should not let this affect our business adversely. Imp. to not lose that hope.

We are indeed stuck in a system, quite a tough place (I think only people who go through it knows). Fighting it legally is tough. See it more of a social reform aspect than legal battle alone.
It will take some lobbying, I am all ears if someone here has ideas.

Let any of us not complain/ rant however, but think what is practical and feasible. Reforms happen when genuine people stand together.