In our last column, we touched on Scaling smarter in 2025: Lessons from successful scaleups. Here we cover how to ensure your business is the 1 in 10 seed-funded businesses that will attract VC funding this year.
Drawing from common pitfalls, and specifically from weekly conversations and deal making with VCs at VenturePath, here are 5 key considerations to secure your VC backing in 2025.
£1bn. Sounds like a big number, right? Unless it’s the total annual amount of ‘Series A’ VC funding, split between 250 companies, averaging £4m each, and represents the total “budget” to move from a scrappy startup, to a graceful scaleup.
So, what can you do to improve your chances of raising scaleup capital, securing your first big VC cheque? The UK, especially media coverage, can be negative about VC funding by default. But for the companies that are successful in raising VC funding, VC backing can be a game changer. Your business becomes better resourced, faster moving, more international, and for the founders themselves; their vision is realised, markets are seized, exceptional teams are built.
Having raised VC funding into my own business, I know the reality of this, and I’ve since helped 80 or so scaleups to secure their growth funding. It’s worth persevering. Tap into the playbook of other successful VC fundraises and the current thinking of UK VCs (we have weekly contact with £10bn of them) to shortcut the process.
With 9 out of 10 seed-funded businesses not securing VC funding in 2024, the stakes are high. To succeed, this process requires proper attention: plan the campaign to win the outcome. There is no room for “VC tourists”, easy money doesn’t exist, and you should be clear on what will make the difference in securing your VC funding.
Five key tips for 2025:
Get Ready – Evaluate key functions of the business and optimise for scale. Proactively solve problems before inviting VCs to study your business. Ensure you have a plan to grow competency in every key area, especially team, sales, finance, operations, investment readiness. Free tools like ScaleUp Score will give you a VC-style evaluation of how you are performing and how you could improve.
Think Big – Your market is (usually) international. Whilst the UK is currently in low/slow/no growth mode, other markets are growing much faster. Can this funding round unlock these geographies? Starting to build proof points, interest, demand from other territories, will highlight to a VC your future growth potential, and global ambition.
VC Toolkit – Prepare the toolkit you will use for your successful VC campaign. Don’t be disregarded, or stay in the market too long, due to not having your investor documents ready (business plan, financial model, pitch deck and data room). These are entry level documents. Make sure your investor proposition includes the ask amount, the valuation, the revenue multiple and the implied return for your VC.
VC Communication – Your excited vision needs to move from your head, to your documents, and into the compelling story you want them to get behind. This takes practice, feedback loops, and commitment. Excitement alone won’t survive an investment committee decision.
VC CRM – Be strategic in who you target, why you want them, how you fit the sector, stage and risk profile of their fund. Illustrate how they can win. There are 1,300 UK/European VCs, corporates, family offices, who can write you a £2-20m cheque, and you are in a market for one (unless a syndicate of 2 – 3 VCs). Get support to leverage pre-existing relationships (like VenturePath’s) across the VC landscape to improve your odds of finding your VC.
