As attention is on the UK’s innovation economy, the bigger question is not whether the UK can create innovative businesses, but whether it can help more of them scale successfully while maintaining a significant presence in the UK as they grow.
The strength of the UK’s innovation economy is clear, with ongoing investment across high-growth areas such as AI, life sciences and advanced manufacturing, and strong participation from investors, corporates and policymakers. The UK is positioned as one of the world’s leading centres of innovation.
This is echoed across recent industry analysis of the UK’s innovation economy, which values the UK tech sector at around £1.2 trillion[1] and points to continued strength across high-growth areas including AI, life sciences and advanced manufacturing. This analysis underlines the UK’s position as Europe’s leading innovation ecosystem, with strong talent, investment and startup formation. Yet it also sharpens an uncomfortable truth: while the UK is highly effective at creating startups, it is less effective at turning them into scaled, globally competitive businesses.
This is a persistent structural challenge. Founders repeatedly point to the same barriers: access to growth capital, talent constraints, and the difficulty of converting early traction into sustainable commercial scale.
One of the most significant fault lines in this journey is the transition from Series A to Series B. The UK has a strong pipeline of early-stage innovation, but it continues to underperform at this critical point in the scale-up journey. Capital matters, and efforts to strengthen funding availability are important. But finance alone does not determine whether a business scales. Commercial readiness, leadership capability, strategic execution and the quality of support available to founders are equally important if firms are to move from promising startup to growth-stage business.
Drawing on direct experience of supporting ambitious businesses, Stephanie Aldridge, Senior Innovation Growth Specialist at Exemplas, shares her perspective on the challenges facing firms seeking to scale from Series A to Series B, and what needs to change if more UK businesses are to succeed.
A strong start – but a weak conversion
The UK is widely recognised for its ability to produce companies that successfully reach Series A. This is underpinned by its research universities, innovation funding, and early-stage investment ecosystem.
However, when benchmarked internationally, particularly against the United States, the UK performs less well in converting Series A companies into Series B-ready growth businesses. This is a well-recognised structural issue: promising firms secure early funding, but too few build the commercial traction and operational maturity needed for the next stage.
In the US, part of this gap is addressed by the support provided through platform venture capital firms and accelerators. Organisations such as Y Combinator, Andreessen Horowitz and Sequoia Capital provide not only investment, but also intensive operational and strategic support. This kind of embedded scaling capability increases the likelihood that companies can execute effectively against growth milestones.
By contrast, many UK firms do not have access to this same level of structured, hands-on support. The result is that some seek US investors or relocate entirely to access deeper capital markets and stronger scaling infrastructure.
The 18–24-month window
For most companies, Series A marks the beginning of a tightly constrained growth phase. Businesses typically have 18–24 months to demonstrate that they can deploy capital effectively and hit key milestones required to unlock their next round of funding.
During this period:
- They are cash‑rich but time‑poor
- They operate under close scrutiny from institutional investors
- They must deliver on predefined commercial and technical milestones
- They are expected to build scalable organisational structures
Success hinges less on the idea itself and more on execution quality. This includes decisions about market entry, pricing, customer acquisition, team structure, and increasingly the intelligent adoption of relevant technologies, whether that is AI, life sciences innovation or advanced manufacturing techniques.
Without clarity and discipline, this capital can be misallocated, leading to missed milestones and stalled growth.
The hidden challenge: commercial readiness
While some firms face technical or regulatory hurdles, particularly in sectors such as deep tech, life sciences or advanced manufacturing, many of the most significant barriers to scaling are commercial.
These include:
- Weak or insufficiently validated go‑to‑market strategies
- Poor understanding of customer segments and buying processes
- Ineffective routes to market
- Lack of a clear value proposition in international contexts
- Underdeveloped commercial teams and capability
Even where technology is strong, failure to execute commercially often prevents progression to Series B.
This reflects a broader issue identified across the UK economy: firms frequently lack the managerial expertise and strategic clarity required to navigate scaling phases effectively.
Strategy is not enough – execution is everything
A defining characteristic of successful scale‑ups is the presence of a clear, structured plan linking capital deployment directly to milestone achievement.
Yet in many UK firms, strategy remains implicit or fragmented. Leadership teams may understand the direction of travel, but lack a structured, shared “operating spine” guiding decision‑making across the organisation.
An effective scaling plan must:
- Define the company’s current position and capability gaps
- Set clear commercial, technical and operational milestones
- Align resources and investment with these priorities
- Provide a roadmap for the 18–24-month journey to Series B
- Be owned not only by advisers, but by the leadership team and board
Without this clarity, execution becomes reactive rather than strategic, significantly reducing the likelihood of successful scale.
The organisational dimension of scaling
Scaling is not only about markets and capital; it is fundamentally about people and organisation.
Companies emerging from Series A often face rapid shifts in organisational complexity:
- Founders transition into leaders of larger teams
- New senior hires must be integrated effectively
- Culture and decision‑making structures must evolve
- Financial and operational discipline must increase
This creates pressure points around hiring, leadership capability, and organisational design. In many cases, firms require highly specialised expertise, yet struggle to access it quickly or appropriately.
The need for more flexible models, such as fractional senior leadership or targeted advisory support, is increasingly evident, particularly where sector‑specific expertise is critical.
Ecosystem fragmentation and missed opportunity
A further challenge lies in the structure of the UK support ecosystem itself.
While there are numerous programmes, initiatives and sources of advice, they are often:
- Fragmented
- Difficult to navigate
- Poorly co‑ordinated
- Not tailored to firms’ stage or sector
As a result, many scaling businesses either underuse the support available or fail to engage with it at all. This widens the gap between capital availability and effective execution.
The retention challenge
The consequences of these structural weaknesses extend beyond individual firms.
Many high‑potential UK companies:
- Seek US investors
- Shift headquarters abroad
- Relocate talent and R&D functions
The pull of the US is not only about deeper capital markets. It is simply a much bigger market, and US investors often expect follow-on funding to come with a commitment to establish a presence there in order to tackle that scale of opportunity.
This represents a loss not only of economic value, but of innovation capacity within the UK. Strengthening the domestic scaling ecosystem is therefore as much about retention as it is about growth.
What needs to change
Addressing the Series A to Series B gap in England requires a broader shift in focus from funding alone to capability, execution and connectivity.
Key priorities include:
1. Embedding strategic execution capability
Firms need structured support that goes beyond advice – helping them define and deliver against a clear, milestone‑driven plan.
2. Strengthening commercial readiness
Greater emphasis must be placed on go‑to‑market strategy, customer acquisition, and revenue scaling, not just product development.
3. Providing targeted, stage‑specific support
Interventions should be tailored to businesses at the post‑Series A stage, recognising their unique pressures and timelines.
4. Improving access to sector-relevant expertise
Mechanisms such as fractional C‑suite roles and specialist advisers can help firms access the skills they need at the right time. This is especially critical when scaling into specialist domains such as life sciences, deep tech or advanced manufacturing, where generic commercial support is not enough and sector-specific know-how can determine whether milestones are hit or missed.
5. Enhancing ecosystem coordination
Simplifying and connecting the support landscape will improve awareness, uptake, and effectiveness.
6. Facilitating strategic connections
Access to corporates, partners and customers, through structured interactions and curated networks can accelerate commercial progress and strengthen investor narratives.
Conclusion
The UK’s pipeline of ideas, talent and entrepreneurial drive is not the constraint. What determines whether this translates into lasting economic value is whether more businesses can convert early promise into scaled, globally competitive operations built from Britain, rather than moving on from it.
Reaching Series A at all is itself no small achievement[2], and strategically supporting more businesses through that first stage remains a substantial challenge in its own right. But the transition from Series A to Series B is where the challenge to scale becomes most visible. It is the point at which strategy must translate into disciplined execution, and where gaps in commercial readiness, leadership capability and ecosystem support can determine whether a business moves forward or stalls.
For policymakers, investors, intermediaries and business support providers, closing this gap should be a shared priority. If the UK is serious about realising the full value of its innovation economy, it must ensure that more firms not only start here but also scale here and stay here.
[1] techUK and Public First, The State of UK Tech 2026, which values the UK technology sector at over £1.2 trillion, making it the largest in Europe.
[2] Estimates vary by source and market, but industry data consistently shows that only a small minority of venture-backed startups progress from seed to Series A, with figures commonly cited in the region of one in ten.