Britain keeps building world-class companies. It also keeps losing them. DeepMind, now the engine of Google’s Gemini, was British. Revolut and Monzo, two of the UK’s most valuable fintech unicorns, have both signaled they may pursue U.S. listings rather than London ones. A House of Lords committee warned earlier this year that the UK risks becoming a country where innovative firms develop transformative products before selling out or moving abroad, leaving other nations to reap the economic benefits.
“The U.K. has the potential to be a powerhouse of growth for AI and creative tech companies,” said the committee’s chair. “However, we are at real risk of becoming an incubator economy instead, where U.K. start-ups develop innovative products and services before selling out or moving abroad, so other countries derive the economic benefit. Too often it’s a case of U.K. begins, other countries cash-in. That has to change.”
“Founders build real value in their equity position, but the financing system often treats that as invisible,” says Al Christy Jr., founder and CEO of specialty finance firm EquitiesFirst Holdings. “The U.K. has the assets, but it needs to establish the architecture to put them to work.”
A Financing System Built for the Wrong Economy
The U.K.’s banking system has been retreating from productive lending for two decades. Lending has shifted toward collateral-backed structures, primarily real estate, while the economy has moved in the opposite direction, with the service sector now accounting for over 80% of GDP. Most modern businesses have software, intellectual property, and customer bases, assets that are valuable but not necessarily factored in mainstream credit assessments.
SME loan rejection rates in the U.K. have risen from 5–10% historically to around 40% today. The U.K. now has the lowest SME finance application rate in the OECD. Allica Bank estimates a £65 billion credit gap accumulated over 25 years.
The Venture Capital Gap
The standard response to any discussion of U.K. business finance is to point at London’s venture capital scene, which is genuinely deep by European standards. But venture capital is not a one-size-fits-all solution to Britain’s capital problem; it addresses a narrow slice of it.
A 2025 DWF group report found that late-stage funding accounted for just 20% of total U.K. venture investment in 2024, compared to 35% in the United States. Over 60% of U.K. late-stage funding now originates from overseas investors, with 42% coming from the U.S. alone, meaning the rewards from British innovation flow disproportionately offshore.
“The VC conversation is real, but it misses a large portion of the market,” says Christy. “There’s a huge class of founders and shareholders sitting on listed equity who need liquidity to reinvest or grow.”
Christy’s firm offers one potential solution. Founded in 2002, EquitiesFirst provides financing against publicly traded shares, giving founders, entrepreneurs, and shareholders access to capital without forcing premature equity sales.
The Next Five Years
The U.K. government has acknowledged parts of the problem. The FCA’s new prospectus rules, which came into force in January 2026, raised the threshold at which listed companies must publish a prospectus for secondary share issuances from 20% to 75%, reducing friction for companies seeking growth capital.
But the government’s access-to-finance review conceded that mainstream lending remains largely unable to account for intellectual property as collateral. The U.K. has the lowest business investment rate in the G7 and productivity still trails the United States by around 20%.
For founders holding listed equity, EquitiesFirst’s structure offers one mechanism to access that value without surrendering ownership, enabling reinvestment in growth while maintaining long-term positions. Whether that model scales to address a £65 billion credit gap is a different question.
Britain has the assets. It has deep equity markets, a well-regulated financial sector, and the sixth-highest number of dollar millionaires in the world. However, it needs to connect those assets to the businesses that need capital — and in a form that doesn’t require founders to choose between growth and ownership.
