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Scale-up Guide: what’s the criteria for raising finance as a scale-up business?

One of the common questions we hear from founders is ‘what do I need to do to raise £x?’ In this article, we look at some guiding principles for businesses looking to raise finance at varying stages of scale-up journey.

To read an overview of other raising finance options, download our Scale-up Guide here.

Start-up/pre-seed capital

The smallest amount a business ever raises can often be the hardest. If you’re just starting out, knowing where to get financing can be a real challenge. 

Typically, you would have a business idea and have done some market research at this stage. We see many businesses starting out who follow these possible options:

  • Consider whether you can start out and get a minimum viable product (MVP) built using your own savings and time
  • Weigh up whether getting help from family and friends will get you the support you need
  • Review whether you’re eligible for grants and start-up loans
  • Speak to venture builders to consider if you’ll benefit from their support. These are businesses that help entrepreneurs develop their business plan and may ask to invest in return. However giving away large amounts of equity early on in the lifecycle involves many risks, so you should use this option carefully to ensure your gains in the long run.
Seed stage

Seed stage

Your business is gaining initial commercial momentum, which can typically mean you have built an MVP, or your first customer has purchased from you. So you may be looking to raise a ‘Seed round’. The amount can be anything from £100k to a few million, but most commonly ranges around £500k. Most investors at this stage will want to see you have gained SEIS/EIS qualification - so confirming this is invaluable.

Consider exploring these sources to boost your Seed finance to scale:

  • Friends and family: this may also include wealthy individuals and contacts in your personal network.
  • Angels: high net worth individuals who invest in early stage businesses. This is the most common form of funding. Rounds with Angels can range from one individual to several combined together.
  • Angel syndicates: a collection of Angels who will collectively review and invest together. Examples of Angel syndicates are Angels Den and Syndicate Room. They can be attractive for founders who don’t have connections to high net worth individuals nor the time to cold approach numerous Angels.
  • Venture capital (VC) firms: VCs start to appear at Seed stage, with a number looking for new businesses, though typically Seed VCs lean towards scalable B2B technology businesses. Bear in mind VCs often come with more complex terms than Angels, but they’re a single source of capital and will often have the ability to provide more funding later on.
  • Crowdfunding: can offer a way to top-up and give you greater access to capital. However often your business needs to have already raised a large proportion of the round to be able to attract investment through crowdfunding.
Series A

Series A

By the time your business may be ready for Series A, to raise £2m to £5m, you’ll need to demonstrate serious traction. Expect investors to typically want to know revenue upfront, with a ballpark threshold for Series A being £1m of annualised revenue. If your business is intellectual property rich you may have a patent or significant technological development with a clear market opportunity, which can offset the immediate focus on revenue.

Consider these Series A finance options:

  • Venture capital (VC) firm: while many founders view VCs as homogenous, there’re many different ‘styles’ of VC. Some may be sector focused, others geographically operating. They also differ in terms of the growth they expect from businesses. At Buzzacott, we often refer to two broad categories of VCs:
  1. ‘Venture’ or ‘US style’ VCs: they’re looking for businesses who are capable of being unicorns, so they’re often more focused on the market opportunity needing multi-billion market sizes. Venture VCs will often encourage businesses to grow quickly with less focus on profits and more focus on growth rate, which increases both the chance of creating a unicorn but also the chance of your business failing. 
  2. 'Growth’ investors: these’re more prevalent in the UK. If your businesses has a niche market opportunity with a strong plan to get there, or you have grown successfully and sustainably, then growth investors are likely to take you more seriously. It may improve your chances of raising finance if you can demonstrate that your business is breaking even or close to that. Growth investors’ strategy is to ensure they have very few failures, with most businesses in the portfolio providing a return, rather than those running full steam to attempt to become a unicorn.

While you may consider attracting both types of investors, you can improve your chances by predominantly appealing to one group, depending on their shareholders’ goals and risk appetite.

Series B and beyond

Series B and beyond

Beyond Series A stage, raising rounds become more specific for each company. You may never raise funding again, or you may receive multiple rounds of funding. 

For Series B stage, rounds start at £5m and can range into much greater sums. As a rule of thumb, the larger the round the greater the level of ‘traction’ of your business needs to be. Revenue is the most common assessment of ‘traction’, but there are many other factors that may come into play, broadening your chances of raising money at this stage. Those factors can include your growth rate, growth opportunity, and ‘stickiness’ of revenue.


While this article provides a high-level overview of funding at different stages of your scale-up journey, your growth and fundraising path is likely to be unique, so your funding profile may be different from others. For example, a Seed round to one business may look like another’s Series A. Or, a B2C business with transactional revenue may need to demonstrate more traction than a B2B IP-rich business with recurring revenue. The path to raising finance is rarely smooth and so you need to navigate it carefully.

At Buzzacott we support businesses raising £2m and above. If you would like to understand more about how to raise capital and what it could mean for your businesses, please get in touch.

Download our Scale-up Guide: innovative financial advice to help you grow

We have created the Scale-up Guide, a practical guide that covers 20 topics on a wide range of financial advice. Download the guide to sense check and develop your understanding of key considerations to take into account on your growth journey.

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