When I first started Embeddable, the tagline was “supporting founders and businesses to start, scale, and succeed”. Naturally, the business has iterated and adapted over time, and the tagline has adjusted accordingly, but some of the work I still most deeply enjoy is those first conversations with founders at the very beginning of the “start” phase.
The raised ceiling
Every opportunity – even if it’s just the kernel of an idea – has huge potential to the founder(s). Sometimes that potential is realised, sometimes not. What has remained a near constant, particularly here in the North East, is people’s ambition. Without straying into a whole other topic, the power of AI has reshaped what is achievable, in what timescale, with what team, and at what cost and, in my opinion, founders are more ambitious than ever.
However, whilst the ceiling of what is achievable in the early stages has shifted dramatically, seemingly so too has the attitude towards how those first movements are funded.
I’ve been fortunate in recent years to have been involved on both sides of early-stage investment, having worked with businesses throughout their raise, as well as with investors as their technical partner for prospective portfolio companies.
What has become clear in conversations I’ve had with founders, particularly over the last two years or so, is not only an increased awareness of the likes of venture capital, but also an increased, perhaps even self-induced, pressure to secure it in order to achieve their goals or simply enter the market. Likewise, investors I have worked with – angel and institutional – are seeing an increase in the number of pre-product or pre-revenue businesses seeking to raise, often with significantly higher initial funding asks.
More businesses are preparing to raise
In our own research at the turn of the year, which focused on the Tees Valley, just over one in four respondents (27%) indicated that they believed their business would access some form of investment or debt financing in the year ahead.
Provisional data from HM Revenue and Customs (src) indicates a 16% increase in the volume of requests for SEIS Advance Assurance in FY 2024/25 versus the previous year, whilst the number of new company registrations in the same period grew by just 1%.
Recently Published
Tees Valley Digital Innovation Survey 2026
Independent research into the current state of innovation and the needs of the ecosystem in the Tees Valley, North East England.
Featuring insight from venture capitalists, ecosystem builders, technology leaders, and more.
There are, without doubt, a number of factors that could contribute to the increased intent to raise early funding. My non-exhaustive thoughts are:
- There is increased general awareness of investment, particularly (S)EIS and venture capital,
- There is a certain perception around both the requirements for, and ease of, raising,
- The current UK economy makes bootstrapping increasingly unsustainable,
- There is a want – or need – for many businesses to pursue more aggressive early-stage growth in order to gain an advantage, requiring outside capital.
With regards to the perceived requirements, this is potentially linked to activity in the US VC market, where, in 2025, a quarter of “seed” venture capital deals involved businesses raising over $5m. From the outside looking in (or over the pond, so to speak), it can therefore appear that the level of effort required for a UK business to raise one tenth of that amount requires somewhere in the region of one tenth of the traction, right? Wrong, of course – and even then, $500,000 (~£367,000) exceeds the SEIS cap.
Intent does not guarantee results
At this stage, I do feel it’s important to highlight that seeking investment does not necessarily imply a reliance on securing it – raising can be one of several calculated levers to pull.
The data suggests an increasing proportion of new businesses have investment intent, but, critically, that is not to say that more businesses are successful in securing a deal, which is potentially where the real disconnect lies: the expectation of securing investment is very different from the reality.
There are naturally a multitude of reasons why a business doesn’t secure investment rather than a single root cause, and the gap between expectation and reality is only one of them, but is it becoming an increasingly common barrier?
Start a conversation
