How to incorporate an AI startup.
Moonlabs is the operator-led AI Academy in Derby. We run three live companies — Homemove, home.co.uk and homedata.co.uk — and we teach twelve students per cohort to ship a real AI product, sell it to a real customer, and raise on it. Three pillars: Coding, Commercials, Investment. Twelve weeks. £6,000.
Moonlabs is what we are. Two operators — James Freestone and Louis O’Connell-Bristow — who have incorporated, capped, raised and (twice) reorganised Homemove, home.co.uk and homedata.co.uk. We have read more SEIS approval letters than most accountants. The formation-mechanics advice on this page is what we wish someone had given us in 2019.
The Academy is what we do. A twelve-week, in-person, twelve-student cohort in Derby. You build a real AI product. You sign a paid pilot on it. You write a deck and a financial model. You leave with a deployed system, a paying customer reference and a live investor pipeline. Coding, Commercials, Investment — the three pillars taught in equal weight every week. Incorporation work is scheduled in week two so the founder mechanics are out of the way before the round arrives.
Why this page exists. Incorporation is the most over-rated and most under-thought decision in a founder’s first month. The act of pushing the Companies House button is trivial; the things you should have done around the incorporation — founders agreement, IP assignment, SEIS pre-approval, cap-table mechanics, share-class structure — are where real founders lose six months or six figures later. You leave the Academy with a company that is properly formed, properly capped, properly assigned, and SEIS-eligible — before the first investor email goes out.
Coding · the shipped product the company exists to hold
A UK Ltd with no product is a Companies House line; a UK Ltd with a deployed AI product and a paid pilot is a credible cap table. By demo day the company holds a working product, the eval suite is repo-versioned under the company’s GitHub org, and the IP-assignment chain is clean back to first commit. A company that owns something real, by week twelve.
Commercials · the founder mechanics, walked
Limited company, share classes, articles of association, founder shares. A founders agreement with vesting, co-founder dispute clauses and IP assignment — signed week two, not after the first argument. Company bank account, chart of accounts, R&D Tax Credits set up. Done in afternoons, in the right order, by week four.
Investment · SEIS Advance Assurance in hand
SEIS is the single highest-leverage tax wrapper for early UK investors. HMRC takes 4-8 weeks; UK angels ask for the approval letter on the first call. We file your application in week two. Cap table from week two, ten-slide deck, financial model. UK pre-seed funds (Plural, Local Globe, Concrete VC, Pi Labs, EF) expect SEIS to be ready. Approval in hand before pitch meetings start; live investor pipeline by demo day.
Common questions.
Should I incorporate before or after I validate the idea?
Honest answer: usually after the first paid pilot, not before. Incorporation costs money, time, and forces decisions that are easier once you know what you are building. The exception is when SEIS is on the table or a co-founder is being added — those benefit from earlier incorporation.
Limited company, LLP, or sole trader?
Limited company, almost always. UK angels and VCs invest in Ltd companies; SEIS / EIS only apply to Ltd companies; the personal liability protection matters as you grow. LLPs and sole traders have their place but rarely for a fundable AI startup.
Do I need a lawyer for the founders agreement?
For the version you sign with a co-founder, yes — the templates online are not bad for inspiration but the dispute clauses matter when they matter. A £1,500 lawyer bill is the cheapest insurance you will ever buy against a co-founder fallout.
When should I apply for SEIS Advance Assurance?
Right after incorporation. HMRC takes 4-8 weeks; UK angels will ask for it on the first call. Apply early and you have the approval letter in hand when the pitch meetings start.
What about US incorporation (Delaware C-Corp) for AI startups?
Only if you genuinely intend to raise from US investors as your primary path. A Delaware C-Corp closes off SEIS / EIS and adds material US tax filing overhead. Most UK AI founders should incorporate in the UK and reorganise later if a US-led round demands it.
More Academy entry points.
The Academy is one course with many doors. Each of these pages is a different entry point into the same twelve weeks.
How To Pitch An AI Startup
How To Raise For An AI Startup
How To Hire Your First AI Engineer
How To Validate An AI Startup Idea
How To Find A Co Founder UK
How To Price An AI Product
Build it. Sell it. Raise on it. In twelve weeks.
Tell us what you would build and we will walk you through the formation work in week two. James and Louis read every application personally and reply inside the week.
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