Britain produces world-class research, but too often, the world’s winners are built elsewhere. Fewer than one in 10 British startups secure Series A funding, with some estimates as low as 4–5% within two years of founding. By contrast, in the U.S., deeper pools of growth capital and a higher share of late-stage investment significantly improve progression.

It seems that the U.K. can attract brilliant scientists, fund bold ideas, and seed world-leading labs, but without product and commercial leaders, who know how to transform a breakthrough into a global business, the country continues to fall short of its scale-up ambitions, particularly in the field of AI.

Commercial, financial and product leadership are key to scaling success

Scaling requires a transition from innovation-led ventures to structured companies with robust reporting, governance, and a clear path to commercialization. Rising costs and more complex regulatory and tax pressures are just a few of the barriers founders face. However, without strong product, commercial, and financial leadership, even the most innovative AI ventures risk stalling before reaching global impact.

Why does this gap persist? According to a recent GOV.UK report on Global Talent Visa Holders, most talent ends up in academia (67%), with only 14% in business and commerce. Recent budget announcements, consultations on attracting entrepreneurs, and reforms to VCT and EIS, while welcomed, only address the symptoms, not the root cause.

All too often in the U.K., technical founders are left to navigate product-market fit, go-to-market strategy, and scaling challenges without the experienced guidance they need, explains Jake Brocklesby, founder of Simba Investments, who works hand-in-hand with founders, combining investment with strategy, networks, and execution support.

He says: “In contrast, ecosystems like those in the U.S. benefit from a deeper pool of repeat operators who embed themselves early and help shape companies from inception through to global expansion. In AI, particularly, where speed to market and real-world application are everything, this operator-led model is essential.”

Struggling in the ‘messy middle’

Gary Brotman, CEO of Secondmind, a Cambridge-based deep tech scale-up, describes the chasm between breakthrough and scale as the ‘messy middle’, where most startups falter.

He says: “There’s a honeymoon period, when you get funded, the research is world-class, and everyone believes the trajectory goes up and to the right, but it doesn’t. What follows is an erratic heartbeat; up, down, pivot, fail, repeat. That period is hard, and most people who could help either don’t understand it, don’t have the risk tolerance, or the stomach for it.”

The companies doing the real work, he says, are in the middle stage, post-revenue, but not yet at a £10 million ‘escape velocity’ ARR (annual recurring revenue), or not at unicorn status. The problems they are solving may not be headline-grabbing, but with the right support, these businesses could make a real global impact.

He also points out that the capital gap is real and tangible, and a key reason why so many U.K. scale-ups end up leaving for the U.S. or Europe and flourishing there. “Some of the most significant opportunities and inquiries that have come our way – for partnership, investment, M&A – have not come from U.K. entities,” adds Brotman. “They’ve all come from the U.S. and Western Europe.”

Developing an AI ecosystem that lets the scaling experts in

Cien Solon, CEO of LaunchLemonade, insists that those seasoned operators are already here, running compliance teams at banks, leading product at insurance firms, and managing operations across healthcare providers. The problem, she says, is that the AI ecosystem has no real pathway to bring them in.

“Warm intros, operator-in-residence programmes, investors who actively recruit from industry; in the UK, that infrastructure barely exists,” says Solon. “A senior compliance lead at a City firm who wants to join an AI startup has no obvious route in. The opportunities are vague, and the networks are closed. The operators who understand compliance, procurement and enterprise sales are sitting in corporates, curious about AI but locked out of the ecosystem that needs them most.”

Slow and steady is another route to scaling up

There are alternative approaches to business growth. Location technology company Crowd Connected stayed lean and did not attempt to scale until it had found genuine product-market fit. CEO James Cobb describes it as ‘patient growth’.

“The VC model assumes you can throw money at growth and it’ll come,” he says. “With technology like ours, you can’t. The product has to work in the real world first, in hospitals, at festivals with 100,000 people, and in buildings with complex radio environments. That takes time, and time is the one thing the VC model doesn’t give you.”

Launched in 2014, Crowd Connected has been profitable since 2023 and has grown 258% over two years. Its success was achieved with around £650,000 in total funding, with no VC and no Series A. And as Cobb points out, they found the U.K. a good place to do it. “The talent is here. The customers are here, and if you’re not burning through someone else’s cash, the cost base matters less than people think.”

Where the U.K. falls short, he argues, is in how scaling success is celebrated, with a narrative only focused on funding rounds and valuations. “It’s not that founders can’t scale here, but that the ecosystem only celebrates one version of what scaling looks like, and it’s a version we’ve largely imported from the U.S., where they do it best.”

Experienced operators are the engine of scale‑up success

Cobb’s experience illustrates a broader point: even when funding isn’t the barrier, the presence – or absence – of an ecosystem of experienced operators and strong networks can determine whether a startup truly scales. As Steven Drost, cofounder and executive vice chairman at CodeBase, puts it, the real engine of scale-up success lies in these operators.

He says: “Silicon Valley doesn’t succeed simply because its chequebooks are larger, but because founders are embedded in a supportive ecosystem of operators who have scaled global companies before them; people who can open doors, spot avoidable mistakes, course-correct, and help a young business land its first transformative customer. Until founder support is treated as infrastructure, in the form of operator expertise, commercial pathways and national networks, the U.K. will continue to create world-class ideas that too often become someone else’s success story.”

Making commercialisation, not just the research, the goal

Others have questioned whether the U.K. is too comfortable celebrating research success without demanding commercial outcomes. Brotman thinks it is. He says: “Ground-breaking research is what we do well, but the research is often the goal rather than the commercial outcome. Many startups that spin out of universities do so with an exit predetermined, often before a commercial product has materialized.”

Organizations like Innovate Cambridge are seeking to change the narrative of research innovation to innovation being measured by commercial success and global impact. But that still leaves a shortage of people or investors with the desire or will to support the incredibly hard work of scaling to something bigger.

Investment in people is needed just as much as in technology

“We need more AstraZenecas. We need more ARMs” says Brotman. “There are countless companies that could form a stronger backbone of the U.K. economy, but most will be lost to offshore acquisitions before they reach their full commercial potential. The long tail of businesses that will never reach unicorn status but are fully capable of making a material impact on the economy is where more focus is needed.”

As Brocklesby points out, Britain can attract brilliant minds and fund bold ideas. But turning AI breakthroughs into globally competitive companies will require investing as much in people, the seasoned operators, as in technology. He says: “The U.K.’s path to scaling AI startups lies not in pouring capital, but in building an ecosystem that connects research, operators, mentors, and industry, allowing world-class ideas to become world-class companies.”