Raising Venture Capital funding

What it really takes for True Venture Entrepreneurs to access equity funding

Venture Capital (VC) provides lifeblood capital that helps potentially great businesses scale. When deployed at a meaningful quantum, it is typically administered through a fund. These funds have a mandate to invest in the traditionally perceived illiquid, risky, space of equity positions in unquoted (often loss-making) businesses.

This fuels innovation, jobs and technology to society. When successful, fund managers, investors, founders and their teams can make very healthy returns that can transform lives. Equity funding into these types of businesses is a critical part of moving an economy forward.

Our latest True Venture funding report

Price Bailey has been involved in VC funding for many years and has observed that, in some ways, the challenge of raising capital from VCs is getting profoundly harder for certain entrepreneurs.

In May 2021, Price Bailey released its first report analysing the venture capital market in the UK for what we coined ‘True Venture’ businesses. To be a ‘True Venture’ business, companies must meet the following criteria:

  • An unquoted business (e.g. limited company)
  • Aggregate equity funding of less than £1.5m, followed by,
  • An equity funding round of at least £2m.

Essentially, these businesses have developed from humble roots, but are no longer in a start-up phase.

In this second and latest report, using Companies House and Beauhurst data, we analyse 1,563 fundraisings between FY 2021 Q1 and FY 2023 Q2 that meet this definition. We assess the continued trends in the True Venture market and look retrospectively at those True Venture businesses in our previous report to identify whether any premium businesses in our 2017-2021 contingent have had continued, sustained success.

We begin by revealing the challenges for True Venture companies in the current landscape, supported by data analysis from our research. Our data analysis focuses largely on, deal volume, cheque sizes, ordinal numbers of fundraising, mean to median funding gap, employee numbers, investors, and exited companies. These factors form the foundation of the report’s conclusion, aimed at providing valuable insights for True Venture businesses seeking to raise meaningful investment in the current True Venture capital market.

Finally, we identify how businesses from the previous report are performing and what advice we would provide would-be True Venture businesses currently looking to raise venture capital funding. The culmination of our research from 2021 alongside our most recent analysis has produced our comprehensive, expert advisory guide for all True Venture entrepreneurs.

If you have any questions regarding content within our guide, or would like to discuss any of the content with one of our experts, please use the form below to contact one of our team.

Download your copy of our eBook here

We always recommend that you seek advice from a suitably qualified adviser before taking any action. The information in this article only serves as a guide and no responsibility for loss occasioned by any person acting or refraining from action as a result of this material can be accepted by the authors or the firm.

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