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Venture Capital Funding: UK Startups Trail Silicon Valley Counterparts
New data reveals a significant disparity in startup funding, with British ventures securing considerably less investment compared to their Silicon Valley counterparts. According to Dealroom figures, cited by the Financial Times, UK startups garnered £16.2 billion in the past year. This sum pales in comparison to the over £65 billion raised by Silicon Valley based startups during the same period. The United States is increasingly dominating the global landscape of venture capital funding, capturing 57% of worldwide VC investment in 2024, marking the first time in over a decade that its share has surpassed 50%, as per Dealroom.
Growing Funding Discrepancy Prompts UK Founders to Consider Relocation
This expanding divide is not a new phenomenon; it reflects an ongoing trend that UK founders have observed over several years, the FT reports. This widening gap is leading many of these entrepreneurs to contemplate moving their operations overseas in pursuit of greater funding opportunities.
American Investment Structure Attracts UK Startups
Mati Staniszewski, co-founder of ElevenLabs, a London-based artificial intelligence firm, explained the strategic decision to incorporate in Delaware. In an interview with the FT, Staniszewski stated, “Recognizing that the majority of venture funding originates from the U.S., we established ourselves as a Delaware corporation, a structure that is both favored and familiar to American investors.”
“No Capital in the UK”: Founders Voice Concerns
Barney Hussey-Yeo, founder and CEO of AI startup Cleo, shared his perspective with the FT, indicating that he already spends a substantial amount of time in San Francisco – four months annually – and is seriously evaluating a permanent relocation. He emphasized the critical issue, stating, “You reach a certain scale where there is simply no capital available in the UK. And the issue is intensifying.” Hussey-Yeo added a stark warning about the future prospects for UK startups if the funding challenges are not addressed.