UK vs US and EU startup fundraising: what's actually different
Round sizes, deal structures and investor expectations all diverge between the UK, the wider EU and the US. Here's what the data actually shows, not the folklore.
The UK raises more venture capital than any other European country but still trails the US by a wide margin, and the two markets differ in deal structure as much as in scale - British early-stage deals typically use an Advance Subscription Agreement rather than the US-standard SAFE, largely for tax reasons.
In this guide: how UK, EU and US fundraising compare on scale, why deal instruments differ, how valuations and round sizes diverge, and what it means practically for a UK founder deciding whether to raise locally or target US investors. This is a general explainer, not investment or tax advice - always take advice specific to your company and investor base.
How does UK fundraising compare to the rest of Europe?
The UK is the largest single venture capital market in Europe by capital raised, ahead of Germany and France, though the gap between all of Europe and the US remains large.
Atomico’s State of European Techundefinedreport put the UK ahead of every other European country in capital raised, with the country recording $14.4 billion against Germany’s $7.4 billion and France’s $6.1 billion. Total capital invested across European startups was projected to reach around $44 billion for 2025, continuing a gradual recovery from the post-2022 downturn.
How does UK/EU fundraising compare to the US?
The US dominates global venture funding by a wide margin, and the gap is starkest in emerging categories like AI, where European companies raised a fraction of what US companies did.
Atomico’s report found Europe raised around $14 billion into AI companies inundefinedagainst $146 billion raised by US AI companies in the same period - roughly a tenfold gap in a single hot category. More broadly, the US now accounts for around two-thirds of all global private tech investment, reflecting both deeper capital pools and a larger domestic market that lets US companies scale faster on home turf before needing to expand internationally.
Why do UK deals use different paperwork to US deals?
UK early-stage deals commonly use an Advance Subscription Agreement (ASA) rather than the Simple Agreement for Future Equity (SAFE) that’s standard in the US, largely because of how HMRC’s SEIS and EIS tax reliefs work.
A SAFE, designed by US accelerator Y Combinator, lets an investor put in money now in exchange for equity at a future priced round, without agreeing a valuation today. According to law firm Bird & Bird’s analysis of SAFEs in the UK, HMRC’s SEIS and EIS advance assurance process is generally more straightforward with an ASA than a SAFE, because an ASA is structured to convert to shares within a defined period (commonly six months), which fits HMRC’s requirements for those reliefs more cleanly than an open-ended SAFE does. Since SEIS and EIS relief is central to how UK angels justify early-stage risk, most UK-only rounds use ASAs or convertible loan notes rather than importing the US SAFE template unmodified.
How do round sizes and valuations differ?
US startups typically raise larger rounds and are valued at higher multiples than UK or EU companies at an equivalent stage, reflecting deeper capital pools and, historically, higher risk appetite among US investors.
The British Business Bank’s Small Business Equity Tracker recorded a median UK seed round of £1.68 million in 2024 (falling to a lower median in the tougher 2025 market), figures that sit well below typical headline US seed rounds reported in US-focused venture data. The pattern repeats at every subsequent stage: a UK Series A is generally smaller than a comparable US Series A, which is one reason a meaningful share of UK scaleups eventually raise a round from a US-based fund once they need Series B-sized capital that’s harder to source purely from UK and European investors.
UK vs EU vs US fundraising: a direct comparison
| UK | Rest of EU | US | |
|---|---|---|---|
| 2025 capital raised (Atomico, European tech) | $14.4bn (Europe’s largest) | Germany $7.4bn, France $6.1bn | Far larger; ~two-thirds of global private tech investment |
| Common early-stage instrument | ASA or convertible loan note (SEIS/EIS-friendly) | Varies by country; SAFEs less standardised | SAFE (Y Combinator standard) |
| Typical seed round (median) | £1.68m in 2024, lower in tougher 2025 market (British Business Bank) | Varies significantly by country | Typically larger than UK equivalents |
| Key tax incentive shaping deal structure | SEIS/EIS | Varies by country’s own scheme | QSBS and other US-specific reliefs |
What does this mean practically for a UK founder?
A UK founder raising purely from UK/EU angels will likely use an ASA or CLN to preserve SEIS/EIS eligibility, while one targeting US investors alongside UK ones needs to decide early which instrument the round will actually run on, since mixing SAFE and ASA investors in the same round adds legal complexity.
Founders considering a US-heavy round should also factor in that US investors often move faster through diligence and expect a larger, more ambitious growth story, while UK investors tend to place more weight on capital efficiency and downside protection - neither approach is wrong, but pitching the wrong story to the wrong audience slows a raise down. Getting early legal advice on which instrument and jurisdictional structure fits your actual investor base, rather than defaulting to whichever template is easiest to find online, avoids having to unwind structural decisions later.
Key takeaways
- The UK is Europe’s largest venture market but still raises a fraction of what the US does, especially in AI, where the 2025 gap was roughly tenfold according to Atomico’s data.
- UK early-stage rounds typically use an ASA rather than a SAFE, largely to preserve SEIS/EIS tax relief eligibility for UK investors.
- UK seed rounds are smaller on a median basis than US equivalents, and that gap tends to widen rather than close at later stages.
- The right deal instrument depends on who’s actually investing - mixing UK tax-relief-driven investors with US SAFE-standard investors in one round needs specific legal structuring.