UK start-ups consider switching to the US for funding

Ross McNaughton adds his thoughts on UK start-ups considering switching to the US for funding:

• This is definitely a trend that we are seeing. More and more UK companies we work with have been moving to a DE topco structure.
• Corporate structure in many ways should be irrelevant. Having a US topco does not stop a start-up / growth company creating UK jobs. Equally, having a DE topco is not the panacea to unlocking US investor interest.
• On the whole US investors are perfectly comfortable investing in UK company structures. The US and UK venture market and terms have been converging over the years; you can see that reflected in the current BVCA forms.

What's more interesting are the flows of capital. For example, within life sciences the (excellent) 2024 BioIndustry Association (BIA) report (link in comments below) noted that this year only 54% of seed investment was taken up by UK investors; down from 76% in 2023 (this also drops to 29% by Series B+). There's definitely something going on there, and increasingly we are seeing both an international outlook within our entrepreneurial client base and a hugely positive outlook for the UK within our international investor community.

Overall, it doesn't matter where the investment comes from. The key is that the UK continues to retain its outsized position as a market-leading centre of innovation and highly skilled talent pool.