Beyond banks: How UK entrepreneurs are rewriting the rules of fundraising

Fundraising for start-ups was tough in the UK in the 1980s and 1990s, and entrepreneurs struggled. “You couldn’t exactly open Yellow Pages and look up ‘angel investors’,” Gurinder Dhillon recalls with a smile.

Dhillon is a serial entrepreneur who found success in the past decade with Otto Car, which specialises in leasing electric vehicles.

Being an entrepreneur wasn’t an accepted – let alone celebrated – career choice a generation ago, as it is today. If you wanted capital and weren’t well-connected, Dhillon explains, you had little choice but to approach bank lenders.

Their first question was typically: “Do you own your house and how much is it worth?” It was an unsettling question. The focus was on what the bank could recover if things went wrong.

Today the picture looks quite different. There is far more venture capital and private equity funding available in the UK. When US firm Sequoia Capital opened its London office in 2020, it was widely seen as a symbolic moment.

Other major US funds operating here include Lakestar (an investor in Revolut) and Accel (which has backed Monzo and Deliveroo). The UK has also seen the creation of the British Growth Fund (BGF) after the 2008 financial crisis, alongside the British Business Bank, owned by the Department for Business and Trade. Many other venture capital funds are now based in the UK too.

Even so, the capital available still pales in comparison with what’s available in the US, and the UK’s appetite for risk is also arguably much smaller.

Perhaps that has made British entrepreneurs more resourceful when it comes to finding alternative ways to access capital. Many have taken more creative approaches in a bid to grow their businesses – some increasingly well-known and others still flying under the radar.

One such approach is crowdfunding. The concept became possible as the internet connected people globally. Early pioneers included US platforms Kickstarter and Indiegogo, which allowed entrepreneurs to appeal directly to the public for financial support, often on an altruistic basis.

Project backers were typically offered perks such as early access to prototypes or places on waiting lists for limited product runs. For small-scale entrepreneurs, this opened up funding routes beyond banks, institutional investors or personal networks. At the same time, backers felt as though they were part of the journey.

Later, platforms such as Crowdcube and Seedrs formalised the model by allowing people to invest in return for equity. In effect, the general public could now act as early-stage angel investors, bringing significantly more capital into the funding ecosystem.

A good example of crowdfunding being used to unleash a business’s potential is Cheeky Panda. Julie Chen co-founded the company with her husband in London in 2016. It specialises in high-quality, mass-produced bamboo products including straws, tissues, nappies and toilet paper.

While visiting a bamboo farm in China, Chen realised that bamboo was a renewable natural resource in plentiful supply. She saw the potential to import toilet paper manufactured in China and market it to more conscious consumers. The business started as a side hustle in a spare room, but its products are now stocked in supermarkets across the UK and abroad.

Chen sought crowdfunding support at the very outset to raise early capital and buy stock, but also to test whether there was real demand for the products in the UK market. Trade shows and public events suggested there was interest, but crowdfunding provided confirmation, as well as vital capital. It also helped Chen build a contact list of people who were interested in her idea and its potential.

The company went on to raise further capital through successful crowdfunding rounds. In late 2022, it raised nearly £1m on Seedrs, offering equity in the business to backers. Another UK entrepreneur credits crowdfunding as a tool for accessing traditional

institutional funding and support. Anthony Eskinazi founded JustPark in London in 2006, two years before Airbnb launched. Originally called ParkatmyHouse, the idea was to let people rent out their driveways or parking spaces on a short-term basis.

Today, more than 45,000 people – mainly in the UK – rent out private parking spaces through the platform and more than 16 million people have used the app. In 2024, JustPark was sold in a multimillion-dollar deal to ParkHub. The US company, which specialises in parking technology for sports and entertainment events, adopted the JustPark name globally. Although Eskinazi stepped down as CEO in 2025, he remains a board member and continues to support the company as a strategic adviser.

Looking back, Eskinazi reflects that institutional funding was previously much harder to secure for tech entrepreneurs in the UK, though he believes the situation has improved in recent years. JustPark didn’t receive any institutional backing until 2011, when BMW i Ventures invested £250,000, five years after it was founded.

This wasn’t a significant amount and he felt he needed a lot more to scale the business opportunity he had spotted. “I was bogged down in maintaining the business rather than growing it,” says Eskinazi. More funding would have allowed him to hire more people so that he could work on the business, rather than in it.

He was one of the first to take full advantage of crowdfunding. His business, which was based in the sharing economy, was particularly well-suited to this. JustPark could tap into its own user base, many of whom were renting out their parking spaces and had a vested interest in the platform’s growth.

JustPark raised money multiple times on Crowdcube, including £3.7m in 2015 from 3,000 individuals, then the highest crowdfunding raise in UK start-up history. Around 80 per cent of that investment came from its own users. In total, JustPark raised £17m on the platform.

Alongside each crowdfunding round, he received backing from institutional investors, including LocalGlobe, Index Ventures and the Japanese conglomerate Itochu. These added credibility to the rounds and brought the scaling expertise that comes alongside working with the best investors, says Eskinazi. When JustPark was sold, more than 10,000 retail backers received a positive return on their investment.

Giving up equity can be painful for any entrepreneur. The trade-off with venture capital or private equity – or indeed equity crowdfunding – is clear: dilution in exchange for capital. But what if instead of cash, the offer was exposure?

That’s the premise behind media-for-equity deals, in which companies receive advertising in exchange for minority equity stakes. The best-known players in the UK are ITV AdVentures and Channel 4 Ventures.

ITV AdVentures focuses its investment portfolio on consumer-facing, direct-to-consumer and digital businesses, offering advertising across ITV channels and ITVX, its digital platform, in return for equity. One beneficiary is menswear brand Spoke.

Spoke, founded in 2013 by Ben Farren and based in Richmond, south west London, makes clothes with custom finishing and specialist sizing, bridging the gap between ready-to-wear and bespoke (hence the name).

For many SME consumer brands, Farren says, TV and cinema advertising can feel out of reach. The instinct is to focus on the bottom-of-the-funnel advertising, such as direct response ads on platforms such as Facebook, Instagram and Google. But around five years ago, he decided to try something different.

He felt his brand had hit a “Meta wall”. “At some point, chucking money at [Facebook founder] Mark Zuckerberg ceases to work and shows diminishing returns. TV and cinema advertising represented an opportunity to point a bazooka at that problem – to build awareness and future demand.”

Television advertising was appealing but “intimidating” because of the sheer expense and up-front commitment involved. So, Spoke negotiated a media-for-equity deal with ITV AdVentures in 2021, divided into tranches so that they could test the arrangement along the way. It proved so successful that Spoke used them all.

Farren took on responsibility for the creative direction of the ads himself, working with agencies on the execution. He found that the promise of exposure on ITV, including high-profile slots during the Six Nations rugby tournament, meant he could bring talented creatives on board. The result was the tongue-in-cheek “Ridiculously Well Fit” campaign, starring a handsome but immodest man who aims to personify the confidence and feel-good factor well-fitting trousers can provide.

Did it pay off?

“That’s the more-than-$64,000 question,” says Farren. To measure impact, he took a traditional approach, commissioning polling firm YouGov to run aided awareness tests with potential customers. These can determine whether consumers know a brand when reminded of it, for example by a picture of its logo.

Spoke’s scores more than doubled after the marketing campaign. His advice to other consumer SMEs is to consider TV advertising “sooner than you think”. Media-for-equity, he says, “allows you to cross a bridge to a form of brand awareness you might have thought was off limits”.

Deirdre Mc Gettrick, founder of furniture search platform ufurnish.com, has taken a similar approach to scale her business. She turned to TV advertising for a campaign that aimed to educate the public about her business’s proposition, rather than directly generate sales.

Ufurnish allows customers to search the entire furniture market in one place – similar to Skyscanner for travel or Autotrader for cars. She was willing to give up equity to explain that proposition at scale. To keep costs down, she used a video production house she already had a relationship with and appeared in the advert herself.

“The cost of TV adverts can vary wildly, so we took a test-and-learn approach, wanting to keep the message simple rather than trying to win an Oscar,” says Mc Gettrick. “I am the ‘actress’ in our advert, which greatly helped reduce the cost of licensing talent and also helped to build my profile as the founder of the business.”

Mc Gettrick would recommend media-for-equity deals to ambitious founders but urges caution too. Many SMEs misunderstand how brand advertising on TV differs from direct response, she says, and risk measuring success by the wrong metrics. Brand-building delivers different, longer-term returns. A more modern twist on this model is emerging: equity for influence. Social media influencers are offering exposure to their audience in return for equity, rather than fees.

One of the best-known examples is the American influencer Alix Earle, known for her “get ready with me” beauty videos. She took equity in the prebiotic soda drink Poppi, in an agreement in which she also promoted the brand to her followers. When PepsiCo bought Poppi for $1.95bn in 2025, the deal paid off for both sides. A slew of new agencies, including OWM and Influencer Capital, are now springing up to broker similar arrangements.

For companies that want reach without dilution, an alternative approach exists: media barter, sometimes known as corporate trade. Companies access advertising slots by exchanging them for their own excess or slow-moving stock and services, rather than paying cash. Media owners benefit by filling unsold advertising space and reducing operating costs using the goods or services received.

TV, billboards and print can all be included. Active International alone has helped fund more than £150m of business costs over the past two years through marketing spend, according to UK managing director Ruth Cartwright. These costs include energy, travel, fleet expenses and staff incentives.

Jet2holidays has used Active International to exchange flights and package holidays for advertising. “Active provides incentives for its partner base to choose Jet2holidays versus their competitors,” explains Cartwright, “by letting partners pay for the inventory in their own product or service, ensuring all stakeholders benefit from the relationship.”

The corporate trade company also works with several SMEs to help arrange access to advertising, including gift delivery specialists Bloom & Wild.

Many businesses now sell directly to customers online while also working with major retailers. This omni-channel approach relies on payment platforms such as Stripe, PayPal and Shopify. In hospitality and bricks-and-mortar retail, point-of-sale providers such as Square and SumUp play a similar role, taking a percentage of each till transaction for providing their service.

Increasingly, these platforms are also offering loans, presenting a new way to access capital. Known as merchant cash advances – a form of revenue-based financing – the platform effectively becomes the lender. For example, PayPal offers PayPal Working Capital and Stripe offers Stripe Capital. These loans are typically based on a flat fee and are quick to access if the business meets eligibility criteria.

These companies assess creditworthiness based on the financial data in a company’s transaction history (rather than a traditional credit check), including sales patterns analysed by algorithms. While faster and easier to access, the final cost of the loan is typically higher.

SMEs mostly use these products for short-term, practical reasons rather than long-term scaling aims.

“This can often happen when businesses are off-season and may have to wait for payments a bit longer than normal,” says Tom Bourlet, head of marketing at Modern World Business Solutions, “or simply have less cash coming in to cover some of their bills. The majority of businesses that we see request a merchant cash advance are within the hospitality industry, but we also see it with retail.”

But SMEs can also use this facility to fund scaling. Jayke Mangion is the founder and director of JM Hospitality Group, which owns multiple businesses, focusing on food and drink offerings in London. His business is entirely independently owned and bootstrapped. It was founded in 2013 and has an annual turnover of more than £10m.

Mangion turned to payments platform Square to access a Square Cash Advance to secure capital for his business, specifically for his small chain of cafés in south London called Brickwood Coffee & Bread.

“We needed the capital because there was an opportunity for us to acquire a new site, but we needed to act fast,” says Mangion. “To make sure we weren’t putting the company in any immediate risk by drawing into our cash flow, we used the Square funding for the first time and found it really easy to use.

“It was a fast process and did exactly the job we needed it to, which was to help us acquire the premises to grow and evolve into a stronger company. We’ve seen this as a successful opportunity as we were able to pay off the funding in a much shorter time period.”

While bank loans are cheaper, Mangion describes the process as “tedious” and needing a “heavy time commitment, which can often still result in not being able to secure a loan”.

As a business owner, he doesn’t have an issue with having to provide guarantees on loans, as he always intends to pay them back, he explains. “The old-school bank process of providing an overdraft or loan is a lengthy process and as a small business owner, it all comes down to where we can save time,” he says.

Of course, many UK companies continue to scale successfully, accessing money through venture capital, private equity or traditional bank lending. But it’s a sign of a healthy landscape for economic growth that there are now plenty of alternatives out there for ambitious founders who want to scale their companies. And that landscape rewards creativity as much as connections.