We need a funding model that treats founders fairly in Wales

THE Tech Nation Report 2025 confirms what many in Wales' entrepreneurial community have known for years - namely we are being left behind when it comes to investment and the current approach to funding new businesses is making the situation worse.

- DYLAN JONES-EVANS

According to the report, Welsh start-ups raised just $32m in venture capital (VC) in 2024, the lowest of any UK nation or region and accounting for only 0.2% of the UK total.

While locations like Scotland and the east of England have seen investment levels soar up 120% and 90% respectively since 2020, Wales has suffered a 67% drop over the same period.

This matters because venture capital is not just about money but is about scale, ambition, and growth. It enables businesses to move quickly, create high-value jobs, commercialise research, and compete globally.

When Wales fails to attract VC funding, we're not just missing out on money, we're missing out on the future economy.

But the investment gap is only part of the story, and the Tech Nation data reveals something even more troubling, namely that Welsh founders are giving up more of their companies than almost anywhere else in the UK just to access capital.

It shows that early-stage founders in Wales give up 21% of their business in a funding round, which is nearly twice as much equity dilution as those in London, who give up just 12% on average. In practical terms, this means Welsh entrepreneurs receive less capital at lower valuations and are sacrificing far more of their ownership to secure it.

This is not just a market anomaly, it’s the direct consequence of how public funding is delivered, and it appears that the very institutions meant to support Welsh entrepreneurs may be entrenching the problem.

According to a recent Beauhurst report, the Development Bank of Wales (DBW) dominates the public funding landscape in terms of early-stage investment. Established to address a market failure in SME finance, its role has grown significantly, particularly in the absence of a strong private investment base.