Seed Funding: Why The UK Has 0 Real Appetite

As the founder and funder of MyCopyHub, a content automation startup based in London, I’ve spent the past year building, testing with users and growing organically. We’re now preparing to raise our first external seed investment, to drive marketing and scale. But what I’ve encountered so far is not just tough, it’s systemic. The UK’s early-stage funding environment is broken, and it’s killing off innovation long before it has a chance to compete globally.

We don’t talk about this enough. The media loves a unicorn story. Politicians love talking about innovation. But on the ground, in the real world of founders, it’s harder than ever to raise modest capital in Britain. And that has consequences, not just for companies like mine, but for the economy as a whole.

A risk-averse ecosystem

Let’s start with the facts. According to Dealroom, UK startups raised around £16.2 billion in 2024. That might sound healthy, until you realise that US startups attracted over £65 billion in the same period. Silicon Valley firms are raising four times as much as their British counterparts. And the gap isn’t closing, it’s widening.

The problem isn’t lack of talent or ideas. It’s lack of risk capital. British investors, especially at the seed stage, are cautious. They want to see traction, revenue, profitability, even before the first proper cheque is written. I’ve had multiple conversations with early-stage funds who love the idea, like the product, and see the market potential, but won’t invest without “proof”. That might work for a bakery. It doesn’t work for technology.

Contrast this with the US, where founders with half an idea and a pitch deck routinely raise $500k or more. There, ambition is backed. In Britain, it’s interrogated.

Investors want safety, not scale

The dominant mindset here is short-termism. UK VCs ask about payback periods. US VCs ask about market capture. It creates a kind of gravitational drag; founders are forced to build “safe” businesses, not transformative ones.

A founder I know in clean tech was told point-blank by a UK investor: “You’re solving a big problem, but it’s too early for us.” That same founder raised his first $600k round in Boston two months later.

At MyCopyHub, we’re building AI-powered tools to simplify content creation and scheduling for marketers. It’s a fast-growing market. The product works. But every time we pitch in the UK, we get the same response: come back when you’re at £30k MRR. That might be fair if we were asking for £2 million. We’re asking for a few hundred thousand to build the user base and expand marketing. That’s what seed capital is for, or should be.

The great British brain drain

Here’s the bigger issue. This isn’t just about me or my company. It’s about the broader environment we’re operating in. If early-stage founders can’t get funding in the UK, they’ll go elsewhere.

And they are. Founders are registering Delaware C-corps, opening Stripe Atlas accounts, and flying to San Francisco or New York to pitch. Even those who stay in Britain are increasingly looking to raise overseas.

This is an economic problem. We’re training world-class entrepreneurs in this country and pushing them abroad at the very moment they become most valuable. We’re seeding the ideas but harvesting none of the growth.

It also means fewer breakout successes. When capital is tight, only the safest ideas get backed. That means copycat apps and SaaS tools with obvious revenue paths. We don’t get the bold bets. We don’t get the next Spotify, Klarna or DeepMind. We get a cottage industry of cautious companies, many of which never scale.

MyCopyHub: A case in point

MyCopyHub is designed to solve a real problem. Marketers, especially at small firms and agencies, are overwhelmed. AI tools exist, but they’re fragmented. Social scheduling exists, but it’s generic. We combine the two—providing a brand-safe, time-saving way to produce high-quality, on-brand content at scale.

We’ve bootstrapped to this point. Well, I've funded from personal savings. But to grow, we need marketing firepower. We’re seeking seed funding to scale distribution and deepen product integrations. We’re not building a moonshot. We’re building a useful, scalable tool that serves a clear commercial need.

But in today’s UK market, that still isn’t enough. The barriers to early-stage funding are so high, and the hoops so numerous, that many founders give up. Or worse, they waste 12 months chasing funds that never materialise.

What needs to change?

If the UK wants to remain a tech nation, we need to do better. That starts with early-stage capital.

First, investors need to take on more risk, especially at the seed stage. That’s the point of seed funding: to test ideas and help teams reach product-market fit. It’s not meant to be derisked to the point of absurdity.

Second, the government should consider expanding tax relief for investors backing truly early-stage ventures. SEIS and EIS are great, but they skew toward companies with revenue or traction. We need a deeper incentive for backers of raw innovation.

Third, we need more hybrid public-private vehicles that support growth, not just R&D. It’s not enough to fund prototypes. We need to fund go-to-market strategies. Marketing isn’t a luxury, it’s what gets good products into the hands of paying users.

A call to back ambition

Britain has no shortage of entrepreneurs. What it lacks is the capital—and the conviction—to support them early.

We love to celebrate the “scale-ups” and “success stories”. But every scale-up started somewhere. Every unicorn was once a pre-revenue idea. If we don’t fund that stage adequately, we won’t get the rest.

MyCopyHub will find its backers, here or abroad. But not every founder has the time or network to play the long game. And as more talent walks away, we’ll all pay the price: in lost innovation, missed exports, and a startup culture that slowly turns inward.

It’s time we stopped playing it safe. Because safe doesn’t scale. And Britain can’t afford to shrink from its potential.