The UK Wants More High

Britain has long liked to think of itself as one of Europe’s best places to build a startup. It has the universities, the talent, the financial sector and, at least on paper, a government that wants the UK to become a global technology and innovation hub.

But new research from London-based VC and accelerator Unrest suggests that confidence among the people actually building these companies is beginning to tell a rather different story. According to a survey of 165 early-stage founders, 34% are actively exploring moving their business abroad, while a further 13% are already in the process of doing so.

Those numbers are staggering, meaning that almost half of the founders surveyed are either considering leaving the UK or have already started making plans to do it. And that should probably concern more than just the startup community, because if early-stage founders don’t want to stay in the UK, that’s most likely a symptom of a far bigger and more serious issue.

The UK Has a Startup Funding Problem

Unrest’s research found that 70% of founders believe that there simply isn’t enough early-stage capital available to the startups in the country, while 63% say the government isn’t doing enough to support startups. And the wider funding numbers appear to back up the underlying sentiment of scarcity.

According to Dealroom data cited by the Unrest report, UK pre-seed investment fell from £357 million in 2021 to $211 million in 2025. Seed funding also dropped, from £1.5 billion to £592 million over the same period. Needless to say, for a founder trying to build a company, these aren’t just abstract figures, and these aren’t small changes either.

Early-stage startups are often operating with limited revenue (it’s kind of part of the deal), high costs and a business model that hasn’t yet been proven. Thus, plenty of risk. If investors become more cautious, moving from an idea to the next stage of growth becomes considerably harder. Not just a whole lot harder, but in many respects, it’s the hardest part of the startup growth process.

In fact, 38% of founders currently raising investment said they started their fundraising with less than six months of runway left, and that’s not exactly an environment conducive to taking big risks.

Political Uncertainty Is Adding Fuel To the Fire

Another massive issue at the centre of the debate is confidence. Or rather, a lack thereof. The UK has gone through seven prime ministers in around a decade, alongside Brexit, significant policy changes and a difficult economic backdrop.

So it’s not totally surprising that Unrest says 43% of founders who participated in the survey believe general risk aversion is now influencing the fundraising environment, with investors waiting for someone else to move first. And who could blame them?

For investors, waiting might be a sensible strategy, because it’s safer to wait and see than make a dangerous bet in an unstable situation. But for a startup with five months of cash left in the bank, it definitely isn’t. As Orr Vinegold, co-founder of Unrest, puts it, founders aren’t necessarily looking abroad because they’ve lost faith in British startups. They’re looking abroad because the UK has become unpredictable at a point when businesses need confidence, patience and long-term capital.

And so the question isn’t necessarily whether Britain has stopped producing ambitious founders, nor is the issue that investors don’t want to invest in UK companies because of their inherent qualities. In fact, that seems to be, very clearly, not the case (and I don’t think many people would’ve believed that). The issue is really whether Britain is creating an environment where those founders can actually afford to stay, and not only stay, but grow and flourish. And whether the UK is stable enough for investors to want to put their money where their mouths are.

An Issue About More Than Just Startups

While some are likely to view this as just another example of the startup sector complaining about the difficulties involved in fundraising, the truth is that there’s actually a far bigger economic and social situation at hand here.

The founders surveyed aren’t exclusively building consumer apps or the next social media platform. They’re not just building flashy, fun tech startups we see in movies or all over Insta. They’re also operating in important and often essential industries like healthtech, life sciences, AI, climate tech, consumer impact and deeptech. Not that the more “flashy”, newsworthy startups aren’t important, but the point is that companies operating in the most essential industries are experiencing very similar challenges. And these are precisely the areas policymakers regularly identify as important to Britain’s future economy. So if they’re so important, why isn’t more being done to keep them in the country?

Naturally, it follows that if those companies grow, they can create jobs, develop intellectual property, attract investment and eventually contribute significant tax revenues. But if they don’t grow in Britain, someone else gets those benefits, and they contribute to another country’s economy, competing with UK-based businesses.

And if startups are forced to relocate because they can’t access the capital they need, the UK could end up doing the expensive part – like educating talent, funding important research and developing innovative ideas – while another country captures the companies and economic growth that come afterwards.

It’s like a country spending large sums of money (and a great deal of time) helping students study to become doctors and nurses, only for them to immigrate due to job scarcity in their home country.

As Pan Demetriou, Unrest’s co-founder, puts it, the risk is that the UK is going to start selecting “safer companies, not better ones”. And if that happens, that’s potentially a much more serious problem than simply having fewer startups. It means that the country has lost it’s hunger for innovation and risk, two things that are intrinsic to growth.

What Does That Mean for the Founders Themselves?

The human cost is often the one that’s given the least attention, but according to the paper, more than half of founders surveyed said they regularly sacrifice time with their families. 45% said they have lost regular sleep, 38% said fundraising has damaged relationships or friendships, and another 36% said fundraising has harmed their mental health.

And financial pressure introduces a whole other dimension. More than one in five founders have used personal savings to keep their company alive, 18% have reduced or stopped paying themselves and 12% have taken on personal debt. Most shockingly, 28% said they have hidden serious financial pressure from family members, co-founders or their teams.

We don’t live in a time in which we believe sweeping feelings under the rug is the best thing for everybody. We know that “hustle culture” is damaging to our overall mental health and it’s actually healthier (and can make us more successful) to take time off and sleep properly. Financial pressure and stress can have detrimental effects on our overall health and hiding these things from loved ones is not good for interpersonal relationships and, as a result, overall mental health.

And these are all things that tend to be symptoms of a struggling startup founder. It’s someone lying awake at night wondering whether they’ll be able to make payroll; a founder putting their own savings into a company because the next funding round isn’t coming through; or a business owner wondering whether they should move their entire company to another country simply because that’s where the money is.

I’ve seen it in somebody very close to me, and his stress as a founder so desperately and adamantly doing everything he could to make the company a success was all-consuming. Luckily, they managed to make it to the other side (something that most aren’t able to say), and the company is now a roaring success with significant funding and support. But if that’s how founders of a successful startup struggled both personally and professionally, I can’t begin to imagine what it would be like for those who aren’t as successful (or take even longer to achieve that success).

Naturally, if they had the opportunity to operate a startup and go through these difficulties in an environment that might make things even just a little bit easier, plenty of them are almost certainly going to do just that.

Does Britain Still Want These Companies?

None of this means that the UK is suddenly a terrible place to build a startup, nor does it mean the government doesn’t actually want startups to continue to build at home. There are still huge advantages to being here, from world-class universities and research to established financial and professional services industries.

But the research does raise a question about what happens when the people building Britain’s next generation of high-growth companies stop believing that Britain is the best place to build them. Only 39% of founders surveyed said they would recommend the UK as a place to build a startup, compared with 41% who said they wouldn’t. And that’s dangerously close to a 50/50 split.

For a country trying to position itself as a technology and innovation powerhouse, that should be a warning sign, because at the very least, the country needs to convince its own founders and startups that it’s a good place to be.

Startups don’t just need brilliant ideas; they need capital, stability, support and enough breathing room to survive the inevitable uncertainty that comes with building something new. And the tough reality of the startup landscape is that if Britain can’t provide those things, founders may increasingly look elsewhere, because other countries will.