Why UK Startups Are Looking to the US for Growth and Capital

For tech and life sciences startups in the UK, the US often becomes a key part of their global growth strategy. With a stable regulatory environment, attractive tax incentives, top-tier universities and a collaborative innovation culture, the UK offers a strong launchpad.

Founders benefit from an ecosystem that prioritises capital efficiency, technical strength and sustainable models. However, as startups mature, domestic support often wanes—prompting many to explore opportunities abroad.

The US stands out due to its dominant venture capital market, which distributes over ten times more VC funding than the UK. This reflects a broader difference in investor risk appetite, making the US a natural choice for companies seeking large-scale funding or preparing for IPOs.

Market size is another major factor. The US economy, valued at $30.51 trillion, dwarfs the UK's $3.81 trillion, offering a significantly larger customer base. For globally ambitious founders, this scale is not just attractive, it's often necessary.

As companies prepare to scale—whether through international expansion, Series B funding or public listings—the US becomes increasingly hard to overlook. The question for many is no longer if they should expand to the US, but when and how.

The US VC Edge

In 2024, US startups secured 57% of global VC funding, totaling over $190 billion. With six of the world's top ten tech hubs—including the Bay Area, New York and Boston—the US offers not just capital, but access to elite networks, talent and global infrastructure.

UK startups raised $16.2 billion in the same year, maintaining their lead in Europe. While the UK has a robust early-stage ecosystem, many startups look to the US for growth-stage funding. In 2024, US investors participated in 42% of UK tech deals and led 58% of late stage rounds over $100 million. This dynamic positions the UK as a strong starting point, with the US as the natural next step for scaling.

UK's Growing Momentum

Despite the US pull, the UK's startup scene is gaining traction. In Q1 2025, UK startups raised $4.9 billion—a 44% increase from the previous quarter and 26% year-on-year. Seed funding hit $1 billion, tripling from Q4 2024, while late-stage rounds reached $3 billion, reflecting rising investor confidence.

Government initiatives like SEIS and EIS have been instrumental, raising over £1.8 billion in the 2023–2024 tax year—a 51% increase from the previous year. Meanwhile, UK venture funds are preparing for future growth, with $11 billion in dry powder ready to invest.

The US Growth Mindset

While the UK ecosystem is strengthening, the US operates on a different scale and philosophy. In Q1 2025 alone, US startups raised $85.5 billion—compared to the UK's $4.9 billion. In the US, failure is often seen as a learning opportunity, and founders are encouraged to pursue rapid growth and market dominance. UK entrepreneurs, in contrast, often prioritise sustainable growth and cautious risk-taking.

This difference is also reflected in investor behavior. US VCs are more inclined to back high-risk, high-reward ventures, while UK funding rounds tend to be more conservative. For UK founders, entering the US market often requires a mindset shift as much as a strategic one.

Mastering a New Market - What Founders Need to Know

Further challenges are presented when expanding into the US Founders must navigate complex legal, tax and employment frameworks that vary by state. The pace of business is faster, requiring quicker decisions and a higher tolerance for risk.

Sector alignment is also key. The US leads in biotech, AI and enterprise SaaS, supported by deep capital and specialised talent. The UK excels in fintech, life sciences and climate tech, but often needs US expansion to fully commercialise innovations.

Exit strategies differ too. US markets offer more IPO opportunities and higher valuations, while UK startups often exit earlier via acquisition. Talent dynamics add complexity: US teams offer scale and specialisation—at a higher cost—while UK teams are leaner and more cost-effective.

Ultimately, success in the US hinges on adopting a mindset focused on speed, scale and bold ambition. Founders who thrive are those who view setbacks as growth opportunities and resilience as a core strength.

Choosing the Right Path

Is the US the logical next step—or a leap too far? That depends on your business model, growth goals and leadership approach. For some, the US offers the scale and capital to go global. For others, the UK provides the depth to build something lasting. The most successful founders are those who understand where their business can truly thrive.

By Malcolm Joy

Managing Partner, Frazier & Deeter UK

About Frazier & Deeter UK

Frazier & Deeter UK (FD UK) is a leading transatlantic tax and business advisory firm, uniquely operating as a single, integrated entity across the UK and US. Since 2021, FD UK has supported over 400 venture-backed startups and scaleups—primarily in the tech and life sciences sectors—with their US expansion journeys. Our agile, entrepreneurial team, drawn from Big 4 and Top 10 firms, delivers tailored, fixed-fee solutions across the entire business lifecycle. With billions raised by our clients, FD UK empowers innovators to scale confidently and successfully across borders.