This growing funding gap has prompted U.K. founders to seek better capital access in the U.S. market.

To attract American investors, many U.K. startups are incorporating as Delaware corporations, recognizing the predominance of U.S. venture funding.

In stark contrast, American tech startups raised over £65 billion in 2024, reflecting a 71% increase from the previous year and highlighting the funding disparity between the two regions.

Barney Hussey-Yeo, CEO of AI startup Cleo, expressed frustration with the U.K. funding landscape, warning that the lack of available capital is a worsening issue that needs urgent attention.

Mati Staniszewski, co-founder of AI company ElevenLabs, noted their strategic incorporation in Delaware, which has helped the company achieve a valuation of $3.3 billion after a recent funding round.

Overall, the U.K. venture capital sector is experiencing a downturn, with funding levels dropping to pre-pandemic figures, raising concerns among entrepreneurs.

Many entrepreneurs in the U.K. are exploring opportunities in the U.S. for better growth potential and access to resources.

British startups are increasingly considering relocating to the U.S. due to a significant decline in local investment, with U.K. startups raising only £16.2 billion in 2024, the lowest amount since 2020.

Startups are particularly attracted to the U.S. for its larger pool of venture capital and a more favorable regulatory environment.

Factors contributing to the decline in funding in the U.K. include market uncertainties and tightened investment conditions.

In 2024, U.S. startups received 57% of global venture capital funding, marking a significant milestone as this share has exceeded 50% for the first time in over a decade.

The shift of startups to the U.S. could potentially impact the U.K.'s tech ecosystem and innovation landscape.