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Is the US the Next Logical Step—or a Leap Too Far?

Is the US the Next Logical Step — or a Leap Too Far?

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For UK-based tech and life sciences startups, the United States (US) often represents a pillar for their global market strategy. With a stable regulatory framework, generous tax incentives, world-class universities and a collaborative innovation culture, the UK remains one of the most attractive environments in the world to launch a startup. It provides a strong foundation for early-stage growth. UK founders benefit from an ecosystem that values capital efficiency, technical excellence and sustainable business models. However, as companies grow, this support ecosystem shrinks, leading many founders to look abroad.

For many, the attraction of the US starts with its world leading capital investment market, distributing over ten times the venture capital than the UK. Amongst other things, this highlights a broader difference in investor appetite and risk tolerance, making the US a natural destination for companies seeking to raise significant growth capital or prepare for an IPO.

Following on from this, market scale may become a key critical consideration. The US economy, valued at $30.51 trillion, is nearly eight times the size of the UK’s $3.81 trillion, offering a dramatically larger customer base. For founders with global aspirations, this scale isn’t just appealing—it’s often essential.

But when it’s time to scale—whether that means entering global markets, raising a substantial Series B or building towards a public listing—the gravitational pull of the US becomes difficult to ignore. For many, the question is no longer if they should expand to the US, but when—and how to do it right.

Where the Big Bets Are Made: The US VC Advantage

When it comes to venture capital, the US sets the global benchmark. In 2024, US startups attracted 57% of all global VC funding – totalling more than $190 billion. With six of the world’s top ten tech hubs—including the Bay Area, New York City and Boston—the US has become a magnet for founders seeking not only capital, but also access to elite networks, deep talent pools, and the infrastructure to scale globally.

By contrast, UK startups raised $16.2 billion,  securing its position as Europe’s leading destination for venture investment. It has cultivated a vibrant early-stage ecosystem, but when it comes to scaling, the dynamics shift. A growing number of UK startups turn to the US for growth-stage capital, particularly from Series B onwards. In 2024, US investors were involved in 42% of all UK tech funding, and played a leading role in 58% of late-stage rounds exceeding $100 million. This evolving relationship positions the UK as a powerful launchpad—and the US as the natural destination for companies ready to scale at speed.

Momentum at Home: The UK’s Quiet Surge

While much attention is focused on transatlantic expansion, the UK’s startup ecosystem is quietly building momentum of its own. In Q1 2025, UK startups raised $4.9 billion—a 44% increase from the previous quarter and 26% year-on-year growth. Seed-stage funding alone reached $1 billion, more than tripling from Q4 2024, while late-stage rounds surged to $3 billion, signalling growing investor confidence across the maturity curve.

The UK government has played a pivotal role in nurturing early-stage innovation through schemes like SEIS and EIS, which together raised over £1.8 billion in the 2023–2024 tax year—a 51% increase from the year prior. At the same time, UK-based venture funds are preparing for the next wave of growth, with $11 billion in dry powder ready to deploy—an encouraging sign of sustained deal flow and a renewed appetite for risk.

The US Obsession with Exponential Growth

But while the UK’s startup ecosystem is gaining momentum, the US continues to operate on an entirely different scale, and mindset. In the US, failure is recognised as a testament to resilience and learning, rather than a sign of defeat. Founders are encouraged to think bigger, move faster and pursue market dominance with urgency. In contrast, UK entrepreneurs tend to emphasize sustainable growth, capital efficiency and measured risk-taking. This divergence is evident in the numbers. In Q1 2025 alone, US startups raised $85.5 billion, compared to $4.9 billion in the UK. The fact that the UK is the second-largest VC market globally emphasises this difference even further.  

The key distinction lies in investor behaviour: American VCs are more willing to back bold, high-risk ventures with the potential for exponential returns, while UK rounds tend to be smaller and more conservative. For UK founders eyeing the US, success often requires more than just a market entry strategy—it demands a shift in mindset and risk appetite.

Mastering the Playbook in New Markets: What Founders Need to Know

Further challenges are presented to UK founders, expanding to the US in adapting to a new operating environment. The US market presents a unique set of strategic challenges that require careful navigation. From state-by-state legal and tax frameworks to employment law and regulatory compliance, the complexity can be daunting for first-time entrants. The pace of business is also faster and more aggressive, demanding quicker decision-making and a higher tolerance for risk.

Sector alignment plays a critical role in determining success. The US leads in areas like biotech, AI and enterprise SaaS, where deep capital pools and specialized talent are readily available. Meanwhile, the UK continues to shine in fintech, life sciences and climate tech, offering a strong foundation for innovation but often requiring US expansion to unlock full commercial potential.

Exit strategies can diverge significantly. US markets offer more frequent IPO opportunities and typically command higher valuations, while UK startups are more likely to exit through acquisition at earlier stages. Talent dynamics add another layer of complexity: US teams bring scale and specialization—but at a premium—whereas UK teams are often leaner, more cost-efficient and culturally cohesive.

Ultimately, founders who succeed in the US emphasize that the biggest adjustment isn’t structural—it’s psychological. Thriving in this environment means embracing a mindset of speed, scale and bold ambition, where setbacks are reframed as learning curves and resilience is a core asset.

Different Markets, Different Mindsets

So, is the US the next logical step—or a leap too far? The answer depends on your business model, growth strategy and leadership mindset. For some, the US offers the scale and capital to go global. For others, the UK provides the depth and focus to build something enduring. The most successful founders aren’t those who follow the crowd—but those who know exactly where their business can thrive.

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Contributors

Malcolm Joy, Managing Partner, Frazier & Deeter UK

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