Trusted by founders, boards and their solicitors to get growth share structures right the first time
A separate share class that only shares in tomorrow's growth
A growth share is a real share, issued today, that only participates in value created above a set threshold, the hurdle, from the date of issue. Existing shareholders keep the value already built into the business. The growth share holder, typically a founder, director or key employee, only benefits from what happens next.
That structure only works if the hurdle is right. Too low, and you have quietly handed over value that already existed, taxable as employment income. Too high, and the class looks artificial and hard to defend. Getting the number right, and documenting exactly how you got there, is the entire job.
Illustrative only. Real growth share valuations use an option-pricing waterfall model, not a straight-line split.
Try the hurdle split calculator
Enter an illustrative company value and hurdle to see how the split works. This is a simplified straight-line illustration, not a real valuation methodology.
Enter both figures above to see the split.
This tool illustrates the hurdle mechanic only. A real growth share valuation reflects rights, restrictions, timing and volatility using an option-pricing waterfall model. Get a proper valuation →
A weak valuation is usually a paperwork problem before it is a numbers problem
We built this service specifically to close the gaps that turn a routine growth share issue into an HMRC problem years later. For a fuller breakdown of these mistakes, see our growth shares valuation mistakes guide.
A hurdle set on a guess, not evidence
A near-zero valuation is not a free pass if the company already had contracts, recurring revenue or a live exit story. The hurdle has to be grounded in the business as it actually stood on the day.
Restrictions and rights left unpriced
Limited voting rights, no dividend rights, vesting and leaver clauses all genuinely affect what the shares are worth. Ignore them and the number stops telling the truth.
Forecasts that only work on a good day
HMRC and investors both spot an optimistic model quickly. A defensible forecast is tied to trading history and current performance, not a best-case story.
No Section 431 election on file
Miss the election and the tax position stays open to challenge as restrictions lift. It is a fourteen-day window, and it is easy to overlook in the rush to issue the shares.
A file that cannot answer HMRC's questions
HMRC wants the logic, not just the conclusion: the hurdle, the assumptions, the rights, the discounts. A board minute with no substance behind it will not carry the day.
Old numbers in a fast-moving business
A valuation that made sense at one funding round can be stale a year later. If the facts have moved, the pack needs updating before anyone relies on it again.
A complete, defensible growth share valuation
Company valuation as at issue date
A defensible view of total equity value at the date of issue, informed by trading performance, recent funding rounds and comparable transactions.
Hurdle setting and rationale
We work with you to set a hurdle that reflects today's value fairly and ring-fences the growth you want to reward, with the logic fully documented.
Waterfall and option-pricing analysis
Total equity value allocated across every share class according to its rights, then the growth share's participation above the hurdle priced properly, not guessed.
Restriction and rights discount
Voting rights, dividend rights, vesting and leaver provisions each priced with a documented basis, not an arbitrary round number.
Section 431 election support
Guidance on the joint election and its fourteen-day filing window, coordinated with your legal adviser or company secretary.
The full documentation pack
Valuation report, financial model, cap table, share terms and board papers, filed together, ready if HMRC or an investor ever asks the obvious questions.
Growth shares, EMI options and ordinary shares compared
Not every company qualifies for EMI, and not every situation calls for an option rather than an actual share. Need EMI or another HMRC scheme valued instead? See our HMRC Share Valuation service.
| Feature | Growth Shares | EMI Options | Ordinary Shares |
|---|---|---|---|
| What is issued | A real share, immediately | A right to acquire shares later | A real share, immediately |
| HMRC pre-clearance | None available | Formal valuation and notification route | None available |
| Who qualifies | Any UK company | Trading companies meeting EMI conditions | Any UK company |
| Value on issue | Deliberately kept low by the hurdle | Not applicable, no shares issued yet | Full current market value |
| Best suited to | Non-qualifying companies, immediate ownership preferred | Qualifying trading companies wanting tax-efficient options | Founders, early co-founders |
From scoping call to signed report in 5 to 10 days
Step 1
Free scoping call
We confirm the share structure, timing, and who is receiving the shares, then quote a fixed fee.
Step 2
Data and documents
Accounts, forecasts, cap table and proposed share rights, reviewed against a secure checklist.
Step 3
Hurdle and waterfall modelling
We build the valuation, set the hurdle, and price the growth share's participation above it.
Step 4
Signed report and documentation pack
A defensible signed report and the supporting file, ready for Section 431 filing and future scrutiny.
A weak growth share valuation is a paperwork problem before it is a numbers problem. Get the hurdle right, get the file right, and the whole structure just works, years after anyone remembers exactly how it was set up.
Kish Patel ACA
Founder, Consult EFC
Growth share valuation questions answered
What is a growth share?
How is a growth share valued?
Does HMRC pre-approve growth share valuations?
What is the hurdle and how is it set?
What happens if the growth share valuation is wrong?
How is a growth share different from an EMI option?
Do restrictions and rights affect the valuation?
What is a Section 431 election and do I need one?
How much does a growth share valuation cost and how long does it take?
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