Experts Comment: What Do UK Startups Need To Know When Looking for Investments?

If it’s your first time raising, it’s important if not critical to build a warm network of key people however you can. It takes way longer than you think it will, if you’re not already well connected in the world of angels, VCs and family offices. Use LinkedIn to research and network as much as you can.

Everyone’s default starting position will be a ‘no’ (and understandably so). Build a thick skin and get used to the word no.

Build human connections first because very few people ever want to be pitched to blind and ensure you are seen as much as possible on LinkedIn for creating credible and thought-provoking content.

Be as prepared as you can be in terms of your business, its plan and trajectory and of course your figures.

It’s a really tough climate in the UK at the moment to raise. Pre-seed requirements moved up one and are now much closer to seed, which makes it really tough to get going for the first time. But don’t let that deter an entrepreneurial spirit. Keep moving forward one step and one day at a time.

Katherine Chan, CEO of Juice

“What do UK startups need to know when looking for investment? 

It’s all about understanding your investor type. Not all investors are created equal and more founders need to understand that a tailored and specific approach must be taken when working with each – some less experienced investors might be looking for quick wins, whereas those more seasoned are likely to be in it for the longhaul. 

Startups would also really benefit from understanding the difference between the funding sources available to them, whether that be from angel investors, VCs, SME lenders, crowdfunding etc. being alert to all of these sources is incredibly beneficial to startups. 

When dealing with VCs and investors it’s essential that a founder be aware of how they make money – but understanding the process is just half the story. Having a killer deck ready (ensuring it is up to date and tailored to each meeting) is hope you make a great impression. Also having your data room and FAQs ready to go is crucial.

What should they be aware of before reaching out to VCs and other potential investors?

When reaching out, founders should start early. Getting used to the funding process early is key to developing a strong rapport with potential investors – you’re not doing yourself any favours by raising with three months runway left, getting started now is vital.

With the market constantly changing and becoming more challenging, securing funding is becoming increasingly difficult – starting early is the best way to secure interest and get ready to go to market.

Is there anything that they should be aware of that’s specific to the UK?

VCs, especially in the UK, tend to be ex-bankers. Ex-bankers tend to be more pragmatic, they put higher weighting on a startups financial model, their assumptions and the numbers game. A startup must stay aware of this. 

Contrastingly, VCs in the US tend to take a more excited approach, leading with the product or service and its impact on the industry, rather than what numbers are on the spreadsheet. With these differences, investors in the UK tend to be less swayed by the founders’ charisma and offering, instead startups must make sure their financial model stacks up as they will come under heavy scrutiny.”

 

Boriana Maurice, Lecturer at The University of Law Business School

 

“To move forward, UK startups must evolve their approach:

1. Rethink capital strategy: blend public grants with private investment from the outset.
2. Align with growth sectors: build solutions that serve cleantech, AI, life sciences, and digital infrastructure.
3. Elevate operational readiness: embed regulatory and compliance thinking into day-one operations.

The stakes are high, but so is the potential. The next generation of UK startups won’t just compete locally – they’ll position themselves as pan-European leaders.”

 

Rebecca Sutherland, the CEO and Founder of HarbarSix

 

“When UK startups look for investment, especially from venture capitalists, it’s rarely just about the idea. In reality, investors are backing you, the founding team, just as much as they’re backing the product. They want clarity of vision, commercial potential, and a believable route to scale. But before you even start having those conversations, there are a few essentials every founder should have in place.

It might sound obvious, but too many founders jump the gun. Being investment-ready means having your house in order, starting with a strong, well-structured pitch deck, reliable financials, a clear business model, and a realistic understanding of your valuation. You’ll also need to show some kind of traction. That might be revenue, user growth, a waitlist, or solid proof that there’s a genuine market need for what you’re building. 

Understand how the game works

One thing many UK founders underestimate is just how relationship-driven the investment world really is. It’s not enough to have a great product and fire off a few cold emails. Warm introductions hold weight, more than most people realise. That’s why tapping into your network, or joining an accelerator that gives you access to investor circles, can be a game-changer.

And remember, not all money is equal. There’s no point pitching a seed-stage idea to a Series A fund. Make sure the VCs you’re approaching invest at your stage and in your sector. Do the research, check their portfolio, and be honest about your fit. 

Don’t ignore the UK-specific advantages

We’re lucky in the UK to have things like the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) generous tax relief programmes that make early-stage startups far more attractive to angel investors. If your company is eligible and properly structured to qualify, it opens up doors to capital that might otherwise be hard to reach. It’s something every founder should be thinking about before they start raising. 

Expect a more cautious tone than the US

It’s also worth managing expectations. UK investors tend to be more conservative than their American counterparts. They often want more proof points upfront and will likely ask tough questions around your unit economics, burn rate, and path to profitability earlier in the process. That doesn’t mean you shouldn’t be ambitious—but you will need to show fiscal discipline and a thoughtful, grounded growth plan. 

Look beyond the money

This part often gets missed, especially by first-time founders. But the investor you choose to partner with is just as important as the money they’re bringing in. You want someone who understands your vision, adds value through experience or networks, and is genuinely aligned with your long-term goals.

Don’t just ask, “Will they invest?” Ask, “Do I want them in my corner for the next five years?

Raising capital in the UK startup ecosystem takes more than ambition—it takes strategy, self-awareness, and the ability to build meaningful relationships. If you’ve nailed the fundamentals and take the time to understand how the landscape works, you’ll put yourself in a much stronger position to attract the right investors—and build the kind of business that’s built to last.”

 

Carrie Osman, CEO and Founder of Cruxy

 

 

“When UK startups begin the fundraising journey, precision is an essential ingredient for success. Founders often underestimate how specific they need to be when targeting potential investors. It’s not enough to just look for a VC. You need to go to the right VC, with the right specialism and a track record that aligns with your business model and stage. There’s no point approaching a deep-tech AI fund that specialises in Cambridge spinouts if you’re building a customer experience platform. Look closely at their existing portfolio, understand what deals they’ve done recently, and whether those companies resemble yours in sector, size, and growth stage.

It’s not uncommon for VCs to overstate their available capital. Founders should be actively interrogating what ‘dry powder’ they actually have. Are they still signing term sheets? How many deals have they closed in the last quarter? Can they invest in your geography or with your company structure? These are crucial questions that often go unasked and unanswered until it’s too late.

The current UK and European funding environment is more cautious than ever. Investors are increasingly seeking evidence of traction, commercial viability, and even early profitability, particularly in markets seen as less stable or capital-intensive. If you’re building something like a robotics business that requires significant upfront hardware investment, you must be even more laser-focused in your investor targeting. Go after those who are comfortable with pre-revenue hardware checks, otherwise, you’re just burning time.

Fundraising is a chance for founders to show how they operate. Their targeting, rigour and research should reflect the way they run their company. If they want investors to believe in their ability to scale, they should start by proving they know how to run a sharp, focused process.”

 

Charlotte Jones, Founder, Business Scale Academy

What should they be aware of before reaching out to VCs and other potential investors?

– Be strategic about who you approach – not every investor is the right fit. Take time to understand the type of investor you need, whether that’s a VC, angel investor, family office, or joint venture. When I raised over £1 million, it was by identifying people who were actively looking to invest in our space and building real relationships from there.

– Financial clarity is non-negotiable – If you can’t explain your numbers, it’s a no. UK investors want to see that you understand your current financial position, have realistic projections (backed by data), and know your margins, burn rate, and cash flow.

– You must know your market – Investors expect you to demonstrate deep customer and market insight. That includes identifying who your ideal customer is, what specific problem you solve, and why your solution is the best in the space. You should be able to talk confidently about market size, growth potential, the competitive landscape, and any risks or trends that may affect your sector.

– Your business model must be scalable – can you scale without breaking? Investors want to see a path to expansion that doesn’t compromise quality or performance. What does scaling look like in practice? Can your operations and delivery systems keep pace? Are you building a business that can grow beyond you?

Is there anything that they should be aware of that’s specific to the UK?

Don’t overlook legal support. UK investors expect startups to be legally prepared. That means using someone who understands how this works and can draft solid agreements and align with legal requirements. Cutting corners here can lead to delays or deal-breakers down the line.