Time to bring back the Great British exit
Britain has no lack of ideas, founders or ambition but too often our successful start-ups lean on American giants when they exit. This isn’t inevitable, says Carolyn Dawson
More than 100 companies are incorporated every hour in this country. British start-ups have raised more than $7bn in investment so far this year alone. Despite the headwinds, the UK remains a brilliant and popular destination to start and grow a company.
And, historically, it has been home to triumphant exits for start-ups, too. Take Oxford Ionics, the quantum computing firm that was acquired for over $1bn earlier this year, or Verona Pharma, the healthtech revolutionising respiratory treatment, acquired for an extraordinary $10bn this summer. Clearly, enormous success is possible here.
But too often, these exit successes lean on the American giants. In fact, when we compiled the top 50 UK exits from 2024-25: 94 per cent were via acquisitions, almost all to American tech. Just 30 per cent of acquirers were HQ’d in the UK.
British entrepreneurs are building extraordinarily successful businesses, and then selling the gains to American giants. The nation is missing out on job-creators that could support future generations. We’re missing out on the opportunity to shape the technologies that define the next decade (and all the soft power that brings). We’re missing out on tax receipts from multinational tech firms headquartered in London.
British entrepreneurs are building extraordinarily successful businesses, and then selling the gains to American giants
Exit should be the start of the story: turning a firm from start-up to homegrown heavyweight: keeping the talent, the innovation and the gains in Britain. Achieve that, and we create a virtuous circle: more British giants that can acquire more British start-ups, driving further innovation and resulting in more Great British Exits rather than lost departures.
But many founders tell us the same story: the path to IPO in the UK is too narrow, too slow and too shallow on liquidity. Private capital dries up just as companies need it most, forcing them either to sell early or look abroad for deeper pools of funding, and avert the risks of a British exit in favour of the security of an American sell.
This isn’t inevitable: and European markets have shown this can be different. France’s Euronext Paris has seen record listings in energy and biotech, underpinned by strong retail participation and state-backed capital. Sweden, with a fraction of our population, continues to punch far above its weight in public listings. These markets didn’t get there by accident: they built ecosystems of domestic investors – from pension funds to savers – who believe in backing homegrown scale-ups for the long term.
Further and faster
By contrast, British pension funds invest less than one per cent of their assets in UK equities, compared to nearly 20 per cent in the 1990s.
Reforms like the Mansion House Accord – an ambition to invest five per cent of direct contribution pension funds into unlisted start-ups – are steps in the right direction, but we need to go further and faster. Founders have been calling on the government to find more ways to channel capital into British businesses through a combination of savings, pensions, and international investment.
We need to channel more capital towards UK tech and growth-stage businesses. That’s why we, with the backing of more than 50 leading UK founders, recently called on the government to create dedicated mechanisms within the Isa system to encourage investment in UK innovation funds.
On top of this, the government could encourage more individual investors by changing the way firms are required to talk about risk, or drive more institutional investment by shifting pension funds away from their risk-averse states.
As well as the mechanisms themselves, it will take a collaborative effort between government, big tech, founders, investors and corporates all together to champion startups, drive returns and educate the market on the opportunity.
Britain doesn’t lack ideas, founders or ambition. What we lack is the capital and confidence to keep our best stories at home. Britain is a fantastic start-up factory, and America the biggest buyer. We need to bring back the Great British Exit, so more tech successes start and end at home.
Carolyn Dawson is CEO of Founders Forum Group, a global community and group of businesses supporting founders at every stage of their journeys. Carolyn’s remit includes Founders Forum’s events portfolio, Tech Nation, and the group’s broader business network. Previously, Carolyn was President at Informa Tech, a FTSE 100 UK, where she presided over the joint venture between Founders Forum and Informa Tech. She is a member of the UK Government’s Digital Economy Council and has led London Tech Week for the past nine years.