How do we keep high-potential tech founders headquartered in Britain, instead of watching them drift offshore, taking their growth stories with them? That question was put to the Head of AIM and UK Primary Markets at London Stock Exchange Group (LSEG), and to a panel of tech founders at SCALE Summit in London.

On 23 April at London’s Business Design Centre, Rupert Hargreaves, City AM’s COO, chaired a conversation with Marcus Stuttard, Head of AIM and UK Primary Markets at the London Stock Exchange; Grace Almendras Castillo, founder and chief executive of Gifftid AI; Michael Smith, co-founder of Sagittal AI; and Lewis D’Ambra of Space Forge, the space manufacturer that raised £22.6m in 2025, the largest Series A in UK space tech history.

The issue Hargreaves raised is one he hears from founders regularly: “The biggest criticism is that UK small businesses or scaleups can’t access funding, or they find it difficult to access funding in the same way a startup in America might do,” he said.

Panels on UK scaleup funding often follow a familiar pattern: a polite acknowledgement that Britain is strong at seed-stage support, then a long list of reasons why everything becomes harder after that. Securing the capital needed to compete and internationalise from a UK headquarters remains a common challenge for scaleups, and it often creates pressure to relocate, frequently to the US. The concern is not abstract: Cambridge-born chip designer Arm chose Nasdaq for its 2023 IPO, and building materials giant CRH moved its primary listing from London to New York the same year, high-profile signals that have sharpened the debate about the competitiveness of UK public markets.

Here is what is changing, and what still needs to be done.

The start is not the problem

All four panellists agreed that the UK’s starting conditions are genuinely strong. The ecosystem is not broken.

Smith, whose company builds AI agents for software development teams, said the “talent to cost ratio here is exceptional” and praised the UK’s regulatory approach as “go slow to go fast.”

D’Ambra was similarly positive about the UK’s regulatory pathways. “Even when you submit an application, you can still talk to the regulators, you can still move things forward,” he said, contrasting that with more rigid “submit and wait” systems elsewhere. He also praised access to institutional capital. “Access to grants, funding, and R&D pots of money make it a really really good place to start collaborating with universities, building up that R&D to get your business ready to start scaling rapidly.”

Almendras Castillo, who moved to the UK under the Global Talent visa after building and selling a company in the US, described the ecosystem as “a secret advantage” for founders. “I couldn’t believe that in less than two years I built the product here,” she said. She has since chosen to headquarter Gifftid AI, and hold its IP, in the UK rather than Canada or the US.

She argued that many modern SMEs are “IP rich” and show signs of readiness that go beyond financial metrics. In her view, the UK’s network of universities, accelerators and public funds needs a clearer mechanism for interpreting those signals and matching founders with the right type of capital. Through Gifftid AI, she is working on building that mechanism. “It’s the ability to act on those signals that counts,” she said, “rather than sitting in policy.”

Stuttard, who leads the LSE’s work with private companies around the country, said the UK often undersells what it has. “We have all of the raw ingredients that we need for huge success,” he said, pointing to roughly 40,000 visible scaling businesses in the UK and a package of grants and loans, EIS, R&D tax credits and government-backed support from Innovate UK and the British Business Bank that overseas peers “look at with real envy.”

The gap is in the middle

The UK supports many seed-stage founders well, and it also serves large, established companies. The question is what happens to the businesses in between.

Smith said founders in the UK often end up paying VC-level prices for capital that comes with debt-level caution. “It’s surprising to me how people want to see a million pounds ARR before they give you a million pounds investment,” he said. In the US, by contrast, investors are often more willing to back the vision. “They can see what’s needed, can see that you’ve got enough traction to get going, and that’s enough to get them to throw money at the problem.”

D’Ambra agreed that the earliest stage of funding, through schemes such as SEIS and EIS, is “really, really good in the UK,” and said support also exists at the top end. The problem, he said, is the middle. “How do you jump from a small business that’s just starting out up to a big scaled-up company? That is the question I think we really need to focus on and tackle.”

Most of Space Forge’s private capital comes from outside the UK. Its largest single cheque came from Germany, while the bulk came from the US. D’Ambra said that reflects risk appetite as much as anything else. “They’re more willing to take that risk and jump forward,” he said.

“How do we anchor ourselves properly in the UK? The more UK private capital I can get in, the easier that argument is to make,” D’Ambra said.

Domestic capital, not just global capital

Stuttard argued that the UK’s ability to attract overseas investment is a strength worth keeping, but it should sit alongside domestic capital rather than replace it.

“It’s a structural advantage in the UK that we attract so much overseas investment,” he said. “The point here isn’t to try and limit that. It should be just to make sure that our own domestic investors are cornerstoning and underpinning our domestic businesses.”

He also pointed to changes in pension fund regulation, which are moving away from a pure focus on cost, and said UK attitudes need to continue shifting towards greater risk tolerance. The government’s Mansion House reforms, announced in 2023, secured commitments from major pension providers to allocate up to 5% of assets in default funds to unlisted equities by 2030, an effort to channel more domestic retirement savings into high-growth companies.

“We can’t regulate risk out of the economy because if we do, we’re not going to get growth,” Stuttard said. “For too long pension funds have been regulated just on cost rather than thinking about what’s the long-term return.” He added: “There have been what look like some fairly technical changes that will have a massive impact over the coming years. In the longer term, if we invest in our businesses, as a society, we’ll get a much greater reward.”

As matters stand, he said, “we’re doing all the hard work as individuals and as taxpayers to de-risk businesses for overseas investors to benefit.”

The solutions

The message from the discussion was that the UK has plenty of capital and plenty of support infrastructure, but not enough connecting the two.

Almendras Castillo has built Gifftid AI around that gap. “There are a lot of universities funding advanced learning, a lot of accelerator programs and supportive systems, but to connect capital with that infrastructure there’s got to be a routing mechanism,” she said. The company has developed a tool that matches a business with the right type of capital, whether that is venture funds, impact funds, private capital or programmatic government funding.

D’Ambra also set out a direct request for government, a few months before Jonathan Reynolds was appointed by Andy Burnham as Secretary of State for Business, Innovation, Science and Trade. “When you’re building a startup, it’s like building a car whilst also trying to drive the car,” he said. “What I need the government to do is to build a road in front of me,” including access to infrastructure, funding through public procurement, grants and R&D support, and regulation that keeps pace.

Founders, keep it simple

Stuttard offered founders one main piece of advice: clarity.

“Be able to tell a really clear story – not about your company and its technology – but about the growth opportunity for investors, and keep it really simple,” he said.

For Almendras Castillo, fundraising depends on being “very specific on the signals that align with the investors that you’re speaking with.”

Smith said founders should be willing to walk away from the wrong money. “The faster you can get to a no, the better off you are,” he said. “You can tell in the first ten minutes whether they care about you.”

How can the UK improve access to international markets and capital, and stop offshoring breakthrough ideas? The discussion will continue at SCALE Manchester, where founders dealing with this problem will meet the investors and policymakers who can help address it. Join us on 25 November 2026. Find out more and register here: