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Investors: who they are, what each one needs, and how to find the right one

Angels, crowdfunding, VCs, spin-out funds, NPIF II, loans and grants: what each needs from you, UK benchmarks, and the North West routes as of October 2026.

FoundersSMEsResearchers21 min readChecked 18 October 2026
On this page
  1. The reality
  2. Match the money to the business
    1. SEIS and EIS: the hook for UK angels
  3. What investors look for at each stage
    1. The grant-to-equity handshake
    2. Why a VC "no" is often about fit
  4. Find the right investor, then run a process
    1. Filter first, then build the list
    2. Warm introductions, and lines not dots
    3. Run the raise like a process
    4. What to send
    5. Term sheet norms, and what to refuse
  5. The North West in October 2026
  6. Real examples, and why
  7. Mistakes investors name
  8. Checklist
  9. Questions
    1. How much equity should I give away in a UK seed round?
    2. Do I need SEIS or EIS advance assurance before approaching angels?
    3. How long does it take to raise a seed round in the UK?
    4. What is NPIF II and how do I apply in the North West?
    5. Why did a VC turn down my profitable business?
    6. What goes in a data room for a seed round?
    7. Is Manchester Angels still active?
    8. Can an Innovate UK grant help me raise investment?
  10. Sources

Most investor rejections are mismatches, not verdicts. This guide shows what each kind of money needs, how to find investors that fit and run a short process, and the North West routes in October 2026. The sums are in The maths investors do.

  • Equity buys a share of a future exit, lenders need repayment from cash flow, grants need the funder's aims delivered. Pick the one that fits.
  • UK early rounds sell 10–20% of the company (average 14%). UK seed-stage companies raising in H1 2026 had a median pre-money valuation of £2.0m.
  • Team comes first: 47% of almost 900 VCs rank it the most important factor, ahead of product and market.
  • Get SEIS/EIS advance assurance before you approach angels. Allow three to six weeks.
  • Run the raise in parallel through warm introductions, and treat anything short of money in the bank as a no.
  • The North West changed in 2026: Praetura Ventures and Par Equity are now PXN Ventures, which runs the £100m NPIF II North West equity fund and PraeSeed; Northern Gritstone now covers Liverpool; Manchester Angels has moved to manchesterangels.org.

The reality

  • £2.0m median pre-money of UK seed-stage companies raising, H1 20261
  • 14% average equity sold in an early UK round (10–20% band)4
  • 47% of almost 900 VCs rank the founding team the most important factor5
  • 146 North West equity deals in 2024; 107 reported for 202567
  • 37% of Smart grant winners had raised private money by the end of 202411
  • 3–6 months for a priced UK round; an ASA closes in one or two days1213

The regional headline flatters. The British Business Bank's 2026 tracker puts North West equity investment at £1.23bn in 2025, second only to London8, but coverage attributes almost £1bn of it to one Cheshire company, Nscale, and puts deals at 107, down 32%7. Without Nscale the pool is about £230m across about 106 deals, nearer 2024's £654m and 146 deals6.

Nationally, money is concentrating: UK deal counts fell from 8,057 in 2021 to 6,197 in 2025; the average round reached a record £5.4m in H1 2026, and three AI companies took 29% of the capital12. Angel investment appeared to fall for a second year in the 2025 tracker9, although UKBAA counts 54% more active angels than in 202210. In 2025 more first-time deals were done outside London than inside it, for the first time since 20223.

What changed in 2026: from 6 April the EIS company limits doubled to £10m a year and £24m lifetime, VCT relief fell from 30% to 20%, and SEIS stayed at £250,0001417. Start Up Loans are a fixed 7.5%, not the 6% older material quotes23. PXN Ventures, the merged Praetura Ventures and Par Equity, had £760m under management at 30 June 202625. On 18 October 2026 manchesterangels.com redirected to a "for sale" page, while the network's site at manchesterangels.org was live32.

Match the money to the business

Local routes and their status are in the North West table.

Money What they need from you Typical cheque What it costs you
Friends and family Trust, honest risk disclosure, SEIS where possible Average round £70k (2019 platform data); bootstrap rounds up to about £100k close in about three days4113 Equity, and relationships if it fails
Angels and syndicates A team they believe in, advance assurance, an exit plan, documents for 20+ hours of due diligence £10k–£50k each (range £5k–£500k); syndicates above £1.5m33 15–30% of equity; no angel over 30% under SEIS/EIS
Equity crowdfunding A story your own customers will back About £700 per crowd investor against £10k–£25k per investor on SeedLegals (2019); Crowdcube, and Seedrs (Republic Europe since 10 July 2024)4142 Platform fees (check each platform) and a public campaign
Pre-seed VC Founders who know the problem, a live demo, first proof-of-concept customers £100k (Octopus); £335k (Haatch); £100k–£300k for 10–20% (SFC Capital, one of 32 active SEIS funds, March 2026); up to £1.5m (Playfair)43474445 About 15% a round, vesting, light consents
Seed VC Paying customers, retention, a market that can scale $350k–$1.25m (Seedcamp); from £1m (Octopus); up to £1m (Haatch, B2B software); up to £5m (NPIF II North West)46434727 10–20%, full consents, often a board seat or observer
Series A VC Repeatable growth, product validated in market, unit economics Up to £10m initial (Mercia Ventures)49 About 20% (US median), a board seat, preference shares50
University spin-out funds Strong IP built on world-class research; deep tech or life sciences Northern Gritstone led rounds of £2m–£5m in the year to March 202652 Investor equity on top of the university's stake (see research to company)
Government-backed loans Repayments from cash flow and a plan to grow NPIF II (£660m for the North, launched March 2024): £25k–£100k and £100k–£2m5657 Interest and covenants; no equity
Start Up Loans A credit check and personal ability to repay; trading under 5 years £500–£25,000 per owner over 1–5 years, with 12 months' free mentoring23 Fixed 7.5%, unsecured personal loan: £25,000 over 5 years is £500.95 a month, £5,056.92 in interest24
Revenue-based finance Predictable recurring revenue An advance repaid as 2–8% of monthly revenue up to a cap58 A 1.2x cap repaid over 6 months is a 65.7% nominal APR; over 18 months, 23.9%; some products sit outside FCA consumer-credit rules24
Venture debt Institutional equity already in; Series A to pre-IPO Not published by Claret Capital, Kreos Capital (BlackRock), Atempo Growth or HSBC Innovation Banking59 Interest, warrants and covenants; no equity
Innovation Loans (Innovate UK) Late-stage R&D and a credible repayment plan; won through loan competitions £100k–£5m, up to 100% of eligible costs; about two months to a decision plus one to two of due diligence6061 7.4% a year (3.7% paid in the project, 3.7% deferred), seven years, senior secured, liquidity ≥1.1x, debt service cover ≥1.2x; no personal guarantees
Social investors Measurable impact plus the ability to repay Varies, via intermediaries; Better Society Capital (renamed April 2024) has invested £925m of its own capital62 Repayable finance; SITR closed to new investment in April 202316
Grants Delivery of the funder's outcomes, match funding, reporting Investor Partnerships: £168m to 417 SMEs, about £400k each63 Match funding and cash flow in arrears; no equity. See Innovate UK

A North West founder's equity ladder, with each rung's published cheque413828482749:

Climbing the equity ladder in the North West (October 2026)
  1. 6Series A (Mercia Ventures)up to £10m initial
  2. 5NPIF II North West equityup to £5m
  3. 4LCR Seed Fund£250k–£2m
  4. 3PraeSeed pre-seed£150k–£200k
  5. 2Angels via NorthInvest£50k–£2m, technology at the core
  6. 1Friends and familyaverage round £70k (2019 data)

SEIS and EIS: the hook for UK angels

Item SEIS EIS from 6 April 2026 (before)
Company can raise £250,000 in total £10m a year (£5m); £24m lifetime (£12m); knowledge-intensive companies £20m / £40m
Company tests Gross assets ≤ £350,000; under 25 staff; trade under 3 years old Gross assets ≤ £30m before, £35m after (£15m / £16m); under 250 staff; normally within 7 years of first sale
Investor relief 50% income tax relief on up to £200,000 a year; CGT-free gains; loss relief 30% on up to £1m (£2m if £1m goes to knowledge-intensive companies); CGT-free gains; loss relief
Holding period 3 years 3 years

Sources: GOV.UK, updated 6 April 2026, and DWF's Budget note15141617.

The reliefs change an angel's downside: a 45% taxpayer who loses everything on a £10,000 SEIS investment is out £2,750 after reliefs; under EIS, £3,8501624. A knowledge-intensive company (passing HMRC's R&D-spend test plus an innovation or skilled-employee test) gets ten years instead of seven and 500 staff instead of 25018.

An ASA (Advance Subscription Agreement, sold as SeedFAST) qualifies only if it cannot be refunded, varied or assigned, carries no interest, and converts within a longstop HMRC expects to be no more than six months19. In practice 84% of SeedFASTs use a six-month longstop, more than half carry no discount (20% is the most common where there is one), and 28% of those created in 2025 had a valuation cap20.

What investors look for at each stage

Stage What they want to see UK benchmarks (date) In their words
Pre-seed Founders who understand the problem, a demo, first proof-of-concept users Idea stage about £1m pre-money, product build £1.3m–£1.5m, raising £50k–£250k (SeedLegals, updated 2022) Octopus: a go-to-market meeting "ideally with a live product demo"; PraeSeed: founders "willing to go the distance"44328
Seed Paying customers, retention, momentum you can explain Median pre-money £2.0m, H1 2026 (Beauhurst); traction stage £2m–£3m (SeedLegals) Haatch: "targeting minimum annual contracts of £12,000"; angels, June 2026: "Understanding why traction is happening is just as important as the numbers themselves"144769
Series A Repeatable growth, validated product, unit economics, capital efficiency Venture-stage median pre-money £5.3m, H1 2026 (Beauhurst); US Series A companies had "several million in ARR" (Point Nine, 2023) Mercia: founders who "have validated their product in-market" and are "ready to scale with a long-term partner, not just raise capital"16849

Share of almost 900 VCs rating each factor important5:

What VCs rate important (share of almost 900 VCs, 2019)
Team95%47% rank it first
Business model83%
Product74%
Market68%

Seven things recur on every criteria page; each has its own guide:

  1. Team. First for 47% of VCs; valuation comes fifth5. Angels: "It always comes down to the 3 P's: The People, their Passion and their Perseverance"34. See The team.
  2. Market. Bottom-up, with inputs shown. See Know your market.
  3. Traction. Paying customers and retention beat sign-ups. See Prove the business.
  4. Unit economics. Gross margin, CAC (customer acquisition cost) by channel, payback. Same guide.
  5. Defensibility. Northern Gritstone backs "strong intellectual property", Mercia "defensible problems", Haatch "Building Enduring Value"514947. See Your moat and Intellectual property.
  6. Why now. Sequoia gives it a slide of its own66.
  7. Exit potential. Angels check that you "really have an exit plan and do not hope to simply remain in control and have a lifestyle job"34. The median time from funding to exit is four years, and 2.8% of UK seed-stage rounds have led to one1.

What the angel checks

UKBAA's due diligence guide asks whether revenues are realistic and "how much can be supported by contracts or orders", when you reach cash flow positive, whether there are "black holes", and "how much you stand to lose if the business fails - too little and you could walk away ... too much and you may be desperate"34.

What the NPIF II fund says

PXN looks for founders "committed to scaling" and businesses that "can show they're going places", with "no perfect formula"; the headquarters "must be based here or in the process of moving here"27.

The grant-to-equity handshake

Ipsos's evaluation of Smart grants (July 2026) found 37% of winners raised private money by the end of 2024: £3.6bn, £2.3bn of it late-stage VC11. The grant added 8–10% to fundraising (15–17% over five years); £298m–£358m would not have been raised without it. Firms valued it for funding "the R&D steps that equity investors required to secure their backing" and as "a quality signal". Two cautions: 43% already had equity before the award, and about 35% of funded firms had ceased trading by 2024/2511.

Investor Partnerships inverts the order: the grant goes only to projects with aligned equity of 1–2x the grant, led by an approved Investor Partner. So far £168m of grants has sat beside £448m of aligned equity and £1.36bn of follow-on63. Approach the investor first, then apply.

Why a VC "no" is often about fit

In Horsley Bridge's data about 6% of investments produced about 60% of returns70, so each investment must be able to return the whole fund. An 8% stake in a $1bn exit returns 1.6x a $50m fund and 0.08x a $1bn fund71; a £50m fund holding 10% at exit needs a £500m sale to get its money back once24. Due diligence costs do not shrink with cheque size, so small cheques are uneconomic11. A profitable company that will never sell is a good business and a bad VC deal; borrow or win grants instead.

The average firm in that survey screens 200 companies a year to make four investments5:

One VC firm's year (average, 2019 survey)
200Companies screened
4Investments madeabout 1 in 50

Find the right investor, then run a process

Filter first, then build the list

Filter by stage, sector, cheque size, thesis, geography and whether they lead. Seedcamp says founders who have "already raised more than a couple of million dollars" are probably not a fit46. Mercia invests "at Series A and beyond"49. Octopus seed cheques "typically start at £1 million"43. NorthInvest needs technology at the core38. NPIF II equity has a manager per region: PXN for the North West, Mercia for Yorkshire, Maven for the North East only275676.

Build the list free from Shipshape.vc, the search tool Innovate UK Business Connect recommends64; Innovate UK's Investor Partner directory63; SeedLegals' list of 32 SEIS funds (March 2026)44; UKBAA's member hubs36; the NPIF II manager list56; and the live investment and loan offers on Bearings.

Target list (30–40 names, one row each)
Firm | Partner | Stage | Sector thesis | Cheque range | Leads? | Geography
Recent deals like ours | Who can introduce us | Status | Last contact | Next step

Running the filters

A Lancaster B2B software company with £90k ARR raising £400k: Mercia is out (Series A), Octopus seed is out (from £1m), Seedcamp is possible (Europe-wide, pre-revenue to post-launch), Haatch fits (B2B, £12k+ contracts, pre-seed £335k), NorthInvest fits (£50k–£2m, tech core), PraeSeed fits if it can wait for the March window. The list starts at four names, not thirty.

Warm introductions, and lines not dots

"The biggest factor in most investors' opinions of you is the opinion of other investors"72, so warm introductions win. Mark Suster: meet investors early, say you are "not raising money yet but that you will be in the next 6 months or so", then send "low-key and short" updates on "key hires, pilot customers, key tech innovations" (a line, not a dot)73. Use one entry point per firm, and assume Series A investors "will backchannel and reference check with your current backers": align your existing investors on one story first74.

Run the raise like a process

Paul Graham's rules, in order72:

  1. One founder runs the raise; the others keep the numbers growing: "If your numbers grow significantly between two investor meetings, investors will be hot to close."
  2. Talk to investors in parallel, "breadth-first", ranked by likelihood of a yes times how good they would be.
  3. The first commitment is half the work. "I don't lead" means no unless the round turns hot.
  4. "Treat investors as saying no till they unequivocally say yes."
  5. Close committed money at once: "It's not a deal till the money's in the bank."
  6. Stop when returns dwindle. Investors who said no are your warmest leads next round.

First Round adds: five firms at a time at most, and push for a term sheet; without one you cannot bargain74.

SeedLegals' timings for a UK raise, with investors' own decision times13124434647:

A priced round, start to money in the bank
  1. Advance assurance3–4 weeks, up to 6
  2. First meeting to decisionOctopus pre-seed 10 days; Seedcamp 2 weeks; Haatch 15 days average
  3. Term sheetabout a month of negotiation
  4. Legal paperworkup to 3 months
  5. Money arrives"about six months before money arrives"

The short cuts: a SeedFAST (ASA) closes in one or two days, and a bootstrap round of up to about £100k in about three13.

What to send

The deck below follows Sequoia's ten-part business-plan outline (page dated 17 October 2026)66, plus the ask. YC adds three rules: "Own the simple business model", say "what you know about the problem that everyone else doesn't", and show traction as progress over time67.

Deck (10–12 slides)
1. Company purpose: one sentence
2. Problem: the customer's pain, how it is handled today, why that falls short
3. Solution: what you do about it, with a demo if you can
4. Why now: what changed to make this possible
5. Market potential: who the customer is, sized bottom-up with inputs
6. Competition and alternatives, including "do nothing": your plan to win
7. Business model: one model, how you intend to thrive
8. Team: who, and the one thing each has done that proves it
9. Traction and financials: progress over time, then the forecast
10. Vision: what exists in five years
11. The ask: amount, use of funds, runway of 12–18 months, SEIS/EIS status

Open a cloud data room before the first meeting: "The longer you take to supply the documents they request, the longer you will have to wait"35. The list combines UKBAA's, HMRC's and SeedLegals'347778.

Data room
1. Certificate of incorporation, memorandum and current articles
2. Register of members and cap table, including options and ASAs
3. Board and shareholder minutes and resolutions
4. Shareholders' agreements and prior round documents (pre-money and terms)
5. IP assignments from founders, staff and contractors; patents, trade marks, licences
6. Employment contracts, option scheme rules and grants
7. Key customer, supplier and distribution contracts; terms of business; NDAs
8. Filed accounts, management accounts, bank statements, 3-year forecast with assumptions
9. SEIS/EIS advance assurance letter and de minimis aid record
10. Insurance policies; litigation and regulatory correspondence
11. Data protection policies (general practice, not on the lists above)

For advance assurance, HMRC wants the amount you plan to raise, a business plan and forecasts, latest accounts, articles, the register of members, latest investor documents and, if you have never used a scheme, details of potential investors77. SeedLegals adds: name at least one investor committed in principle to 25% or more of the raise, write the plan around risk to capital rather than growth, and get it right first time, because "any mistakes mean you have to reapply"78.

Term sheet norms, and what to refuse

Term UK seed norm (SeedLegals data) Walk away from
Equity sold 10–20%, average 14%; 30% means "your valuation is too low, or you're trying to raise too much too early"4 Over 30% in one round
Liquidation preference None, or "a 1x non-participating preference" (SEIS/EIS compatible)80 Participating, or 2x–3x79
Founder vesting 84% of rounds; most often 3 years with a 12-month cliff81 Well over three years, no credit for time served
Investor consent 68% of rounds; none for friends and family, "Lite" for £150k–£700k angel rounds, "Full" for £500k+ fund rounds82 VC-style lists in small rounds that "offer little or no real added value"
Board Rare in small rounds; offer an observer seat83 An investor director for a small cheque
Warranties Founder liability capped at 1x salary, or about £20,000 if unpaid, with a claims floor79 Uncapped liability
Anti-dilution Rare before later investors; "quite an aggressive action"79 Full ratchet at seed
Tranches Avoid: "living hand to mouth"; milestones "are rarely as predictable as they seem"84 Milestones you do not control
Drag and tag Expected by "Almost all experienced investors"79 A drag threshold that lets a minority force a sale
ASA terms 6-month longstop (84%); 10–20% discount or none; cap in 28% (2025)20 A longstop over 6 months (loses SEIS/EIS)19

Expect a term sheet, an investment agreement, a shareholders' agreement, new articles and a disclosure letter35. UK Private Capital (the renamed BVCA) has members-only model documents (listed 26 February 2025)85.

The North West in October 2026

Route What it is Cheque and terms Status at 18 October 2026
PXN Ventures Praetura Ventures and Par Equity merged, "built in the North, for the North"; pre-seed to Series B+ £760m under management; 120+ portfolio companies Live; pitch via its website2526
NPIF II North West equity (PXN Equity Finance) £100m mandate; sector agnostic; HQ in or moving to the North West Up to £5m Live: Fruga £1m (October 2026), Inovus Medical $9.3m (September 2026)273031
PraeSeed (PXN) Pre-seed cohort for the North; under £250k revenue last year; six weeks; up to 8 investments a year £150k–£200k; 2026 cheques £200k from NPIF II Applications once a year in March; next cohort early 2027; 13 pitched in September 20262829
NPIF II loans GC Business Finance and River Capital (smaller); FW Capital (larger) £25k–£100k; £100k–£2m Live5657
Liverpool City Region Seed Fund Combined Authority money managed by AXM Venture Capital; LCR base or move; any sector £250k–£2m, can sit inside a larger round Investing until 2030; free Founder Funding Group round table, Liverpool, 28 October 202648
Northern Gritstone Spin-outs and IP-rich deep tech and life sciences; Leeds, Liverpool, Manchester, Sheffield £283m committed ordinary plus £100m preference capital at 31 March 2026; about 50 investments; led rounds of £2m–£5m in 2025-26 Live; preferred investor at Liverpool since May 20255253
LYVA Labs Incubator LCR start-ups and spin-outs at TRL (technology readiness level) 2–5: health and life science, clean tech for health, deep tech Up to £25k on day one by ASA, plus support and a demo day Applications close 29 October 2026, 17:00; investments completed 12 March 202755
NorthInvest Angel network for the North; technology at the core; seed to Series A £50k–£2m; free to founders; investors pay 3% + VAT Live: 220 angels, 89 deals, £41m+ facilitated; monthly pitch events3738
Manchester Angels, and UKBAA's Angel Hub Manchester Angel network for B2B software and deep tech, 45 active angels; the investor-only hub at No.1 Circle Square, which it supports with Praetura and DSW, runs pitch sessions Not published Live at manchesterangels.org, apply online; the .com domain redirects to a for-sale page3236
GC Angels (The Growth Company) Angel and co-investment arm; ran the Early-Stage Northern Showcase with Bruntwood SciTech, February 2026 (75+ businesses, 50+ investors) Not published Website unreachable; ask the Business Growth Hub7586
Fund Her North and Women Angels of the North Free collective of 40+ women in Northern VC and angel groups; a women-led angel syndicate Not published Live; no events listed39

Free help to get investor-ready

NorthInvest gives free pitch coaching and a monthly virtual pitch event37. The LCR Seed Fund runs free Founder Funding Group workshops (next: Liverpool, 28 October 2026)48. GC Business Growth Hub's funding service is publicly funded at no charge; "Understanding your Business Funding Options" runs in Bury on 21 October 202686. Bruntwood SciTech gives tenants investor introductions and pitch preparation87. The NatWest Accelerator's Manchester hub is free to join (no Liverpool hub listed)88; Venture Café Manchester is free every Thursday89; Bionow runs the life-sciences pitching sessions90. Innovate UK Business Growth (Invest-Ability course) has paused new requests65. More in Relationships first.

Real examples, and why

Monzo on Crowdcube, March 2016

Monzo raised £1m in 96 seconds from 1,861 investors who took 3.33% of the equity, an average of £542 each, implying a post-money value of about £30m40. No investor reasoning is published. A crowd round is capital and marketing at once, and needs a brand your customers already want to own.

Fruga, Manchester, October 2026

The open-banking insurtech raised £1m from NPIF II via PXN Equity Finance, with Haatch co-investing30. PXN's reason, in its words: the founders "have developed a proposition with clear commercial potential"; the money goes on hires in Q1 2027 and a pipeline of insurers and managing general agents. The pattern: a regional fund, a national sector specialist, and use of funds tied to named pipeline.

Inovus Medical, St Helens, September 2026

The surgical-simulation company extended its funding to $20m with $9.3m from NPIF II via PXN, follow-on from the first NPIF via Mercia, a Texas medtech investor and $1.3m from the Liverpool City Region Life Science Innovation Zone31. Its simulators sit in nearly 300 residency programmes. Each round was bought with traction the last one paid for.

Matter Machine, Liverpool, October 2026

The University of Liverpool spin-out at the Materials Innovation Factory closed an oversubscribed £4m pre-Series A led by IP Group, with Northern Gritstone (£1.1m), the University of Liverpool Enterprise Fund, Norrsken Evolve, LYVA Labs and Parkwalk's Northern Universities Venture Fund54. No reasons were published; Northern Gritstone's stated interest is "IP-rich early-stage investment opportunities built on world-class research"53.

A Smart grant winner's angel round (Ipsos case study, 2026)

One unnamed firm found that "evidence of paying subscriptions and multi-site rollouts was critical in unlocking angel investment, with proven willingness-to-pay amongst customers being a deciding factor"11. The grant bought the proof; the proof bought the round.

Stratton Tea, Liverpool, 2024

An ethical tea and spice distributor used an NPIF loan for equipment and key roles during an expansion57. A lender's case, matched to a lender.

Mistakes investors name

Checklist

Questions

How much equity should I give away in a UK seed round?

Between 10% and 20%, averaging 14% on SeedLegals' deal data; UKBAA puts the angel range at 15–30%. A 30% ask signals a valuation too low or a raise too large433.

Do I need SEIS or EIS advance assurance before approaching angels?

In practice, yes: it cuts a 45% taxpayer's worst-case SEIS loss to 27.5% of the cheque. Apply three to six weeks before you want to close, written around risk to capital167813.

How long does it take to raise a seed round in the UK?

About six months to money in the bank for a priced round, including a month of negotiation and up to three of legals. An ASA (SeedFAST) can close in one or two days1321.

What is NPIF II and how do I apply in the North West?

The Northern Powerhouse Investment Fund II is a £660m British Business Bank fund for the North of England, launched in March 2024. In the North West, loans of £25k–£100k come through GC Business Finance and River Capital, £100k–£2m through FW Capital, and equity of up to £5m through PXN Equity Finance; your headquarters must be in the region or moving there5627.

Why did a VC turn down my profitable business?

A fund needs each investment to be capable of returning the whole fund: a £50m fund holding 10% needs a £500m exit to get its money back once. A company that will never sell cannot; loans, revenue-based finance and grants suit it7124.

What goes in a data room for a seed round?

The eleven folders in the data room list above: corporate documents, cap table, minutes, prior rounds, IP, employment, contracts, accounts and forecasts, advance assurance, insurance and litigation. Slow delivery reads as disorganisation3435.

Is Manchester Angels still active?

Yes, at manchesterangels.org, which on 18 October 2026 listed 45 active angels and an online application; the old .com address redirects to a for-sale page. It also supports UKBAA's investor-only Angel Hub Manchester, which runs pitch sessions3236.

Can an Innovate UK grant help me raise investment?

Modestly: Ipsos found Smart grants lifted private fundraising by 8–10% by 2024, and 37% of winners raised. Investor Partnerships needs an approved investor's equity first1163.

Sources

  1. Beauhurst, The Deal H1 2026 (deal counts, average round, seed and venture-stage median pre-money valuations, time to exit and conversion to exit). https://www.beauhurst.com/research/the-deal-h1-2026/ ↩↩↩↩↩

  2. Beauhurst, The Deal Q1 2026 (full-year deal counts 2021–2025). https://www.beauhurst.com/research/the-deal-q1-2026/ ↩

  3. Beauhurst, State of UK First-Time Investment 2026. https://www.beauhurst.com/research/state-of-uk-first-time-investment-2026/ ↩

  4. SeedLegals, "How to value your company", updated 26 July 2022 (equity per round, stage valuations, 30% warning, runway, US benchmarks, "about six months before money arrives"). https://seedlegals.com/resources/how-to-value-your-company/ ↩↩↩↩↩↩↩↩

  5. Gompers, Gornall, Kaplan and Strebulaev, "How do venture capitalists make decisions?", Harvard Law School Forum on Corporate Governance, 20 August 2019. http://corpgov.law.harvard.edu/2019/08/20/how-do-venture-capitalists-make-decisions/ ↩↩↩↩

  6. TheBusinessDesk North West, "NW equity market rebounds", 24 June 2025 (2024: £654m, 146 deals). https://www.thebusinessdesk.com/northwest/news/2154410-nw-equity-market-rebounds-with-growth-in-deals-and-value-after-multi-year-decline ↩↩

  7. Prolific North on the British Business Bank Small Business Equity Tracker 2026 (North West 2025: about £1.23bn, 107 deals, Nscale about £1bn). Reported in coverage; the Bank's own factsheet could not be opened for this guide. https://www.prolificnorth.co.uk/?p=143962 ↩↩

  8. London Loves Business, "London attracts almost £7bn in equity investment", 2 July 2026 (regional table from the Small Business Equity Tracker 2026: London £6,982m, North West £1,230m, East of England £1,022m). https://londonlovesbusiness.com/london-attracts-almost-7bn-in-equity-investment/ ↩

  9. British Business Bank, Small Business Equity Tracker 2025 (angel investment appears to have fallen for a second year). https://www.british-business-bank.co.uk/about-research-and-publications/small-business-equity-tracker-2025 ↩

  10. UKBAA, "The UK Angel Investment Market 2025: what the data tells us" (active angels up 54% since 2022; report itself login-gated). https://ukbaa.org.uk/policy-and-research/ ↩

  11. Ipsos for Innovate UK, Smart Grant Impact Evaluation Report, July 2026 (pp. 9, 14, 17, 30, 37, 44–45, 74–77). https://www.ukri.org/wp-content/uploads/2026/07/IUK-140726-SmartGrantImpactEvaluationReport.pdf ↩↩↩↩↩↩

  12. SeedLegals, "Agile fundraising", 24 October 2019 (a traditional round "can take 3-6 months"). https://seedlegals.com/resources/seedlegals-agile-fundraising/ ↩↩

  13. SeedLegals, "3 ways to close your fundraise fast", updated 22 January 2025 (legals up to three months, negotiation about a month, advance assurance three to four weeks or up to six, SeedFAST one or two days, bootstrap round three days). https://seedlegals.com/resources/3-ways-to-close-your-fundraise-fast/ ↩↩↩↩↩↩

  14. GOV.UK, "Apply to use the Enterprise Investment Scheme", updated 6 April 2026. https://www.gov.uk/guidance/venture-capital-schemes-apply-for-the-enterprise-investment-scheme ↩↩

  15. GOV.UK, "Apply to use the Seed Enterprise Investment Scheme", last updated 25 May 2023; no later change found. https://www.gov.uk/guidance/venture-capital-schemes-apply-to-use-the-seed-enterprise-investment-scheme ↩

  16. GOV.UK, "Venture capital schemes: tax relief for investors", updated 6 April 2026 (SEIS 50%, EIS 30%, VCT 20%, loss relief, SITR closed). https://www.gov.uk/guidance/venture-capital-schemes-tax-relief-for-investors ↩↩↩↩

  17. DWF, "Budget: UK venture capital implications", December 2025 (EIS and VCT changes from 6 April 2026). https://dwfgroup.com/en/news-and-insights/insights/2025/12/budget-uk-venture-capital-implications ↩↩

  18. HMRC Venture Capital Schemes Manual, VCM8162–VCM8167 (knowledge-intensive company conditions), pages updated 30 July 2026. https://www.gov.uk/hmrc-internal-manuals/venture-capital-schemes-manual/vcm8162 ↩

  19. HMRC Venture Capital Schemes Manual, VCM33025 (advance subscription agreements: "HMRC expects a longstop date to be no more than 6 months"). https://www.gov.uk/hmrc-internal-manuals/venture-capital-schemes-manual/vcm33025 ↩↩↩

  20. SeedLegals, "How to pick the right deal terms for your SeedFAST" (data from 28,000+ SeedFASTs, 2018–2025). https://seedlegals.com/resources/how-to-pick-the-right-deal-terms-for-your-seedfast/ ↩↩

  21. SeedLegals, "SeedFAST is the new seed round", updated 1 September 2026. https://seedlegals.com/resources/seedfast-is-the-new-seed-round/ ↩

  22. SeedLegals, "Advance Subscription Agreements" (dilution risk, six-month conversion). https://seedlegals.com/resources/advanced-subscription-agreement/ ↩

  23. GOV.UK, "Apply for a Start Up Loan" (£500–£25,000, fixed 7.5%, 1–5 years, unsecured personal loan, trading under 5 years). https://www.gov.uk/apply-start-up-loan ↩↩

  24. Worked examples with inputs shown (Start Up Loan amortisation, revenue-based finance APRs, SEIS/EIS loss tables, return-the-fund) are in The maths investors do, checked October 2026. ↩↩↩↩↩

  25. PXN Ventures home page ("Delivering at scale for founders from preseed to Series B+"; AUM £760m, "True as of June 30th 2026"; 120+ portfolio companies). https://www.pxnventures.co.uk/ ↩↩

  26. PXN Ventures, "The story" (Praetura Ventures and Par Equity funds, including NPIF II North West equity and PraeSeed). https://www.pxnventures.co.uk/the-story/ ↩

  27. PXN Ventures, NPIF II page ("We can invest up to £5m of equity"; £100m mandate; "Your headquarters must be based here or in the process of moving here"; "sector agnostic"; "no perfect formula"). https://www.pxnventures.co.uk/npif/ ↩↩↩↩↩↩

  28. PXN Ventures, PraeSeed (£150k–£200k, up to 8 start-ups a year, under £250k revenue last year, based in the North, applications in March, next cohort early 2027). https://www.pxnventures.co.uk/praeseed/ ↩↩↩

  29. PXN Ventures, "Founders impress at PraeSeed's Investor Showcase for third year in a row", 24 September 2026 (13 companies; £200k from NPIF II; up to eight investments). https://www.pxnventures.co.uk/founders-impress-at-praeseeds-investor-showcase-for-third-year-in-a-row/ ↩

  30. PXN Ventures, "Manchester InsurTech scaleup Fruga raises £1m from NPIF II", 15 October 2026. https://www.pxnventures.co.uk/manchester-insurtech-scaleup-fruga-raises-1m-from-npif-ii/ ↩↩

  31. PXN Ventures, "Inovus Medical extends funding to $20 million with continued NPIF backing", 29 September 2026. https://www.pxnventures.co.uk/inovus-medical-extends-funding-to-20-million-with-continued-npif-backing/ ↩↩

  32. Manchester Angels, manchesterangels.org, read 18 October 2026 (45 active angels; B2B software and deep tech; "Apply for funding" via the Angelos platform). The same day manchesterangels.com returned an HTTP 307 redirect to a GoDaddy "for sale" page. https://manchesterangels.org/ ↩↩↩

  33. UKBAA, Entrepreneurs hub (18,000 angels; £5,000–£500,000 per venture, typically £10,000–£50,000; syndicates above £1.5m; 15–30% equity; 30% cap under EIS/SEIS; 20 hours of due diligence). https://ukbaa.org.uk/entrepreneurs/ ↩↩

  34. UKBAA, "The due diligence process" (PDF, 2020). https://ukbaa.org.uk/wp-content/uploads/2020/09/The-due-diligence-process.pdf ↩↩↩↩↩↩

  35. UKBAA, Angel Hub Manchester ("designed exclusively for investors"; No.1 Circle Square; supported by Manchester Angels, Praetura Ventures and DSW). https://ukbaa.org.uk/membership/angel-hubs/manchester/ ↩↩↩

  36. NorthInvest, home and About pages (220 angels, 89 deals, over £41m facilitated; free investment-readiness advice; monthly virtual pitch event). https://northinvest.co.uk/about/ ↩↩

  37. NorthInvest, "Raise" (North of England, technology core, seed to Series A, "typically £50k - £2m", investors pay "a 3% success fee plus VAT", faster with SEIS/EIS advance assurance). https://northinvest.co.uk/raise/ ↩↩↩

  38. Fund Her North (free membership; runs Women Angels of the North), fetched 18 October 2026. https://www.fundhernorth.com/ ↩

  39. Startups.co.uk, "Start-up Mondo raises £1m from the crowd in just 96 seconds", 4 March 2016 (Crowdcube; 1,861 investors; 3.33% of the equity; average £542). https://startups.co.uk/news/start-up-mondo-raises-1m-from-the-crowd-in-just-96-seconds/ ↩

  40. SeedLegals, funding round statistics, 13 February 2020 (average rounds: friends and family £70k, angel £200k, VC £650k; about £700 per crowdfunding investor against £10k–£25k median on SeedLegals). https://seedlegals.com/resources/seedlegals-funding-round-stats/ ↩↩↩

  41. UKTN, "Seedrs rebrands as Republic Europe", 10 July 2024. https://www.uktech.news/news/seedrs-rebrands-republic-europe-20240710 ↩

  42. Octopus Ventures, "How it works" (pre-seed typical £100k and decision within ten days; seed and later from £1m; go-to-market meeting "ideally with a live product demo"; detailed feedback if declined). https://octopusventures.com/about/how-it-works/ ↩↩↩↩↩

  43. SeedLegals, "Most active SEIS investment funds in the UK", updated 26 March 2026 (32 funds; SFC Capital £100k–£300k for 10–20%). https://seedlegals.com/resources/most-active-seis-investment-funds-in-the-uk/ ↩↩

  44. Playfair Capital (pre-seed only; £100k to £1.5m; up to £5m per company). https://playfair.vc/ ↩

  45. Seedcamp FAQs (first cheque "usually between $350K-$1.25M"; not a fit if "already raised more than a couple of million dollars"; process "within two weeks"; observer roles not board seats). https://seedcamp.com/faqs/ ↩↩↩

  46. Haatch, founders page (pre-seed £335k, seed up to £1m; "targeting minimum annual contracts of £12,000"; 15 days average from first meeting to IC; "Building Enduring Value"). https://haatch.com/founders ↩↩↩↩↩

  47. Growth Platform, Liverpool City Region Seed Fund (£250,000–£2m; AXM Venture Capital; investing until 2030; Founder Funding Group round table 28 October 2026). https://growthplatform.org/liverpool-city-region-seed-fund/ ↩↩↩

  48. Mercia Ventures ("Series A and beyond"; "up to £10m of initial capital"; "validated their product in-market"; "defensible problems"). https://www.merciaventures.co.uk/ ↩↩↩↩↩

  49. SaaStr summarising Carta data (US median dilution about 20% at seed and Series A; founding-team ownership 56.2% after seed, 36.1% after Series A). https://www.saastr.com/the-state-of-seed-today-10-key-learnings-from-cartas-latest-data ↩

  50. Northern Gritstone, home and About pages ("strong intellectual property"; deep technology and life sciences; Leeds, Manchester, Sheffield, Liverpool). https://www.northern-gritstone.com/about ↩

  51. Northern Gritstone, Annual Report 2026 (PDF), 11 June 2026 (at 31 March 2026: £283m committed ordinary capital, 50% paid up, plus £100m preference share capital; about 50 investments, 33 at seed or beyond; rounds led in the year: £3.5m and £2m pre-seed, £3m, £4m and £5m seed). Its 23 April 2026 news post describes the same base as £382m of permanent capital after a further £20m. https://www.northern-gritstone.com/s/NG-AnnualReport-26-SCREEN.pdf ↩↩

  52. Northern Gritstone, "Northern Gritstone announces investment partnership with the University of Liverpool", 13 May 2025 (preferred investor status; "IP-rich early-stage investment opportunities built on world-class research"). https://www.northern-gritstone.com/news/northern-gritstone-partnership-with-liverpool-university ↩↩

  53. Northern Gritstone, "Northern Gritstone invests £1.1 million into University of Liverpool spinout Matter Machine", 13 October 2026 (£4m pre-Series A led by IP Group). https://www.northern-gritstone.com/news/northern-gritstone-invests-in-mattermachine ↩

  54. LYVA Labs Incubator 2026–27 (LCR start-ups at TRL 2–5; up to £25k on day one by advance subscription agreement; applications close 29 October 2026; investments completed 12 March 2027). https://lyvalabs.com/incubator/ ↩

  55. TheBusinessDesk, Northern Powerhouse Investment Fund II profile (£660m, March 2024; North West managers GC Business Finance, River Capital, FW Capital, Praetura Ventures; Mercia for Yorkshire, Maven for the North East). https://www.thebusinessdesk.com/northwest/business-profiles/northern-powerhouse-investment-fund-2 ↩↩↩↩↩

  56. Growth Platform, NPIF II launch article, 21 March 2024 (manager list and loan bands; the first NPIF put over £570m into 608 North West businesses; Stratton Tea and Lattimer Group examples). https://growthplatform.org/?p=23965 ↩↩↩

  57. Capitalise, revenue-based financing explainer (broker source: cap example, 2–8% revenue share). https://capitalise.com/gb/business-finance/revenue-based-financing ↩

  58. Claret Capital Partners, Kreos Capital (BlackRock) and Atempo Growth provider pages, and HSBC Innovation Banking UK; none publishes pricing. https://www.claret-capital.com/ ; https://www.blackrock.com/institutions/en-global/kreoscapital ; https://www.atempogrowth.com/ ; https://www.hsbcinnovationbanking.com/uk/en/ ↩

  59. techUK, "Innovation Loans: an overview", 5 December 2025 (reporting a ForrestBrown webinar: £100k–£5m, 7.4%, seven-year term, covenants, no personal guarantees, timings). https://www.techuk.org/resource/innovation-loans-an-overview.html ↩

  60. UKRI, Innovate UK general guidance for applicants, updated 20 August 2026 (loans are won through loan competitions). https://www.ukri.org/councils/innovate-uk/guidance-for-applicants/general-guidance/ ↩

  61. Better Society Capital, rename announcement, April 2024 (£925m of own capital invested; nearly £3bn from others). https://bettersocietycapital.com/latest/rename-better-society-capital/ ↩

  62. Innovate UK Business Connect, Investor Partnerships (aligned equity "at least 1-2x the amount of grant funding"; led by an approved Investor Partner; £168m to 417 SMEs, £448m aligned equity, £1.36bn follow-on; partner directory). https://iuk-business-connect.org.uk/programme/investor-partnerships/ ↩↩↩↩

  63. Innovate UK Business Connect, Investment page (points founders to Shipshape.vc as "a free-to-use investor search tool"). https://iuk-business-connect.org.uk/investment/ ↩

  64. Innovate UK Business Growth ("New requests into the service ... have been paused as part of the current planning cycle"); Source funding strand with the Invest-Ability course. https://iuk-business-connect.org.uk/business-growth/ ↩

  65. Sequoia Capital, "Writing a business plan" (ten sections: company purpose, problem, solution, why now, market potential, competition and alternatives, business model, team, financials, vision), page dated 17 October 2026. https://www.sequoiacap.com/article/writing-a-business-plan/ ↩↩

  66. Y Combinator, "How to pitch your company" ("Own the simple business model"; what you know about the problem that others do not; traction as progress over time). https://www.ycombinator.com/blog/how-to-pitch-your-company/ ↩

  67. Point Nine, SaaS Funding Napkin 2023, 30 September 2023 (US data; Series A companies had "several million in ARR"). https://writing.pointnine.com/p/what-does-it-take-to-raise-capital-1aa ↩

  68. SeedLegals and Clarendon webinar, "How angels assess opportunities", 1 June 2026. https://seedlegals.com/resources/deal-sharing-investing/ ↩

  69. a16z, "Performance data and the Babe Ruth effect in venture capital" (Horsley Bridge data: about 6% of investments produced about 60% of returns). https://a16z.com/performance-data-and-the-babe-ruth-effect-in-venture-capital/ ↩

  70. Harlem Capital, "Can your startup return the fund?" (8% of a $1bn exit: 1.6x a $50m fund, 0.08x a $1bn fund). https://harlem.capital/can-your-startup-return-the-fund-6e233bd5c8b2/ ↩↩

  71. Paul Graham, "How to Raise Money", September 2013. https://paulgraham.com/fr.html ↩↩

  72. Mark Suster, "Invest in Lines, Not Dots", 15 November 2010, as reproduced by Tim Berry (the original is behind a paywall). https://timberry.com/mark-suster-be-a-line-not-a-dot/ ↩

  73. First Round Review, "The fundraising wisdom that helped our founders raise billions in follow-on capital", 31 May 2016. https://review.firstround.com/the-fundraising-wisdom-that-helped-our-founders-raise-18b-in-follow-on-capital/ ↩↩

  74. Bruntwood, "The Growth Company and Bruntwood SciTech team up to deliver groundbreaking early-stage Northern investor showcase", February 2026 (75+ businesses, 50+ investors; Marc Shirman quote). https://bruntwood.co.uk/news/the-growth-company-and-bruntwood-scitech-team-up-to-deliver-groundbreaking-early-stage-northern-investor-showcase/ ↩

  75. Maven Capital Partners, NPIF II page (equity up to £5m, North East only). https://www.mavencp.com/sme-finance/northern-powerhouse-investment-fund ↩

  76. GOV.UK, "Apply for advance assurance on a venture capital scheme", updated 18 December 2024. https://www.gov.uk/guidance/venture-capital-schemes-apply-for-advance-assurance ↩↩

  77. SeedLegals, "How to apply for SEIS/EIS advance assurance", updated 13 November 2024. https://seedlegals.com/resources/apply-for-seis-eis-advance-assurance-online/ ↩↩↩↩

  78. SeedLegals, "UK term sheets explained", updated 25 July 2026 (preferences, anti-dilution, drag and tag, warranty caps, board seats). https://seedlegals.com/resources/uk-term-sheet-explained/ ↩↩↩↩

  79. SeedLegals, "Preference shares and SEIS/EIS", 11 April 2026. https://seedlegals.com/resources/preference-shares-seis-eis/ ↩

  80. SeedLegals, "UK founder salaries and share vesting", updated 10 March 2025 (84% vest; three years; 12-month cliff). https://seedlegals.com/resources/uk-founder-salaries-and-share-vesting/ ↩

  81. SeedLegals, "Should your investor get a seat on the board?", updated 7 February 2024 (data from 2,000+ rounds). https://seedlegals.com/resources/should-your-investor-get-a-seat-on-the-board-seedlegals-data-has-the-answer/ ↩

  82. SeedLegals, "Investment tranches", 6 April 2026. https://seedlegals.com/resources/investment-tranches/ ↩

  83. UK Private Capital (formerly the BVCA), model documents for early-stage investments, listed 26 February 2025, members only. https://www.ukprivatecapital.co.uk/resource-library-search.html?information_type=model-documents-for-early-stage-investments ↩

  84. GC Business Growth Hub, programmes and events ("Publicly funded ... at no charge"; "Understanding your Business Funding Options", Bury, 21 October 2026). https://www.businessgrowthhub.com/events ↩↩

  85. Bruntwood SciTech, business support ("a network of investors with public and private capital"; pitch preparation). https://bruntwood.co.uk/scitech/business-support/ ↩

  86. NatWest Accelerator ("Any business can join our community"; Manchester hub at 1 Spinningfields Square; Liverpool not listed). https://www.natwest.com/business/business-services/entrepreneur-accelerator.html ↩

  87. Venture Café Manchester ("Free and open to all", every Thursday 17:00–20:00). https://venturecafemanchester.org/ ↩

  88. Bionow events, October 2026 to January 2027 (pitching and investment sessions). https://bionow.co.uk/events ↩

Written for businesses, founders and researchers in the North West of England and checked against the sources listed above on 18 October 2026. Funders change their rules, so always read the current call before you apply. Spotted something out of date? Tell us.

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