Investor tax offset
Give your investors an immediate 20% non-refundable tax offset on their qualifying investment.
ESIC Status
Turn innovation into an investor magnet
We help qualifying Australian startups secure Early Stage Innovation Company status.
Capital gains exemption
Qualifying shares attract a complete capital gains tax exemption for your investors.
Competitive advantage
ESIC status transforms your cap raise from a pitch into a tax-advantaged proposition.
Bulletproof compliance
We build the contemporaneous documentation and governance framework.
The Core Problem
The hidden cost of raising capital without ESIC
Early-stage founders competing for investor capital without ESIC status are leaving leverage on the table.
Undifferentiated deal flow
Without ESIC status, your investment proposition looks identical to every other early-stage deal on an investor’s desk. You are competing on narrative alone, without the structural tax advantage that moves serious capital.
Investor Friction
Self-assessment risk
ESIC is a self-assessment regime. Many founders claim eligibility without rigorous documentation, only to expose their investors to significant ATO risk when the claim is reviewed years later during a CGT event.
Compliance Exposure
Misunderstood eligibility
The interaction between the early stage test, the 100-point innovation test, and the principles-based innovation test is nuanced. Founders frequently misjudge their eligibility, either missing a valid claim entirely or proceeding on a flawed basis.
Lost Opportunity
The Sentinel Difference
ESIC as a strategic capital instrument
We don’t just confirm your eligibility. We engineer your ESIC position to become a powerful, defensible tool in your capital raising arsenal.
Rigorous eligibility assessment
We conduct a forensic review of your business against both the 100-point innovation test and the principles-based innovation test, identifying the strongest pathway to qualification and closing any gaps before you go to market.
Precision
Institutional-grade documentation
We prepare the contemporaneous evidence pack that your investors and their advisors require. Every claim is supported by detailed records designed to withstand ATO scrutiny, even a decade after the investment.
Governance
Investor confidence materials
We provide you with a professional ESIC assessment letter that you can share directly with prospective investors and their tax advisors, giving them absolute confidence in the validity of your ESIC status.
Credibility
Integrated capital strategy
ESIC status does not exist in isolation. We align your ESIC position with your broader corporate structure, R&D Tax Incentive claims, and capital raising roadmap to maximise the commercial impact of every incentive available to you.
Strategic Alignment
Strategic Triggers
Is your company ESIC-eligible?
These are the critical signals that indicate your business should be exploring ESIC status immediately.
Preparing to raise capital
You are approaching a seed round, angel investment, or Series A and want to offer investors a materially stronger proposition than your competitors.
Actively developing new technology
Your company is building genuinely novel products, processes, or services with the potential for high growth across a broader-than-local market.
Early stage with limited revenue
Your company was incorporated within the last three to six income years, with assessable income under $200,000 and total expenses under $1 million in the previous financial year.
Existing R&D or IP assets
You hold enforceable patent rights, have registered for the R&D Tax Incentive, or have participated in an eligible accelerator program, all of which contribute to qualifying under the 100-point innovation test.
Your Growth Pathway
From eligibility to investor-ready
A structured engagement designed to confirm, document, and commercialise your ESIC status.
- 01
The Diagnostic
Determining your eligibility.Deliverables- Early stage test review
- Innovation test assessment
- Principles-based test evaluation
- Gap analysis and eligibility roadmap
- 02
Documentation
Building the evidence base.Deliverables- ESIC evidence pack
- Innovation test documentation
- Investor ESIC assessment letter
- ATO private ruling support
- 03
Capital Activation
Deploying ESIC into your raise.Deliverables- Integration into investor materials
- Investor tax briefing documentation
- Ongoing share issuance compliance
- Continuous ESIC status monitoring
Our Philosophy
The Sentinel Flywheel
We integrate innovation strategy, financial architecture, and restructuring insight into a compounding system.
Your R&D is a strategic asset, not just an expense
Every business solves problems. The difference is whether those problems are being captured, documented, and structured as eligible innovation. We identify the R&D activities already happening inside your business — product development, technical experimentation, process engineering, and software builds — and ensure they are recognised as a source of strategic value.
Innovation
Converting eligible activity into non-dilutive capital
Your innovation unlocks real funding. Through the R&D Tax Incentive, government grants, and ESIC investor incentives, qualifying technical work is converted into capital that flows directly back into the business. For eligible companies under $20m turnover, the R&D Tax Incentive alone can deliver a refundable cash offset on eligible expenditure every financial year.
Strategic Liquidity
A stronger balance sheet on your own terms
Non-dilutive capital changes the dynamics of your business. It strengthens your balance sheet, improves working capital, and reduces your dependence on external equity at unfavourable terms. With strategic liquidity flowing consistently, you gain the financial breathing room to invest in growth on your own timeline rather than being forced into premature fundraising.
Financial Strength
Growth without the structural debt
Financial strength creates the foundation for disciplined growth. We engineer tax-efficient corporate structures, implement real-time financial reporting, isolate and protect your intellectual property, and build the governance frameworks that institutional stakeholders expect. The result is a business that scales without accumulating the hidden liabilities that derail companies at exactly the wrong moment.
Structured Scaling
Positioned for investment, acquisition, or long-term scale
A structurally sound, innovation-led business commands premium valuations. When your balance sheet is clean, your tax position is optimised, your IP is protected, and your governance is institutional-grade, you negotiate from strength. And the enterprise value you create feeds directly back into further innovation — compounding the cycle.
Enterprise Value
FAQs
Frequently Asked Questions
ESIC eligibility involves complex, interacting tests. Here is how we bring certainty to the process.
What exactly is an Early Stage Innovation Company?
An ESIC is an Australian company that meets strict ATO criteria for being both early-stage and genuinely innovative. Qualifying as an ESIC unlocks powerful tax incentives for your investors, including a 20% tax offset on their investment and a capital gains tax exemption on qualifying shares held between 12 months and 10 years. The status is designed to make early-stage innovation investment materially more attractive.
How do I know if my company qualifies?
Your company must pass two tests. The early stage test requires that you were incorporated within the last three to six income years, with assessable income under $200,000 and total expenses under $1 million in the previous financial year. You must then also pass either the 100-point innovation test or the principles-based innovation test, both of which assess whether your business is developing genuinely novel products, processes, or services.
What is the difference between the 100-point test and the principles-based test?
The 100-point test is an objective, self-assessed checklist. You accumulate points for criteria such as holding enforceable patent rights, claiming the R&D Tax Incentive, receiving government grants, or completing an eligible accelerator program. The principles-based test is more subjective and assesses whether your company is genuinely developing a new or significantly improved innovation with high-growth potential. Many companies seek an ATO private ruling under the principles-based test for additional certainty.
When should we secure ESIC status relative to our capital raise?
Before you issue shares. ESIC eligibility is tested at the precise moment new shares are issued to an investor. If your company does not qualify at that exact point in time, the investor cannot access the tax incentives. We strongly recommend completing your ESIC assessment and documentation well in advance of any capital raise to ensure your eligibility is rock-solid before investor discussions begin.
Why do investors care about independent ESIC documentation?
Because the tax risk sits with them. If the ATO later determines that your company was not a qualifying ESIC at the time shares were issued, it is the investor who must amend their tax return and repay the offset. Sophisticated investors and their advisors increasingly demand independent, professionally prepared ESIC evidence packs before they will commit capital. Our documentation gives them that confidence.