We have EMI options granted to Employees and are considering accepting funding from a venture capital firm. The proposed funding would be for a minority equity stake in the business but would increase the implied valuation of the firm significantly.
Referring back to our advisor's notes at the time the EMI options were granted I note that a disqualifying event occurs if there is any alteration to the share capital of the issuing company which affects the value of the shares under EMI options or results in a conversion of shares under option where the market value of the shares increases.
Would VC funding therefore result in a disqualifying event? I'm not sure it's relevant but the funding amount would not cause the new implied valuation of the EMI shares to exceed the £250k EMI grant limit.
Thanks in advance