Meet the Funder: What VCs Really Look For (and how founders should respond)

FinTech West, in partnership with the British Business Bank, brought together founders, scale-ups and active investors for a more substantive version of the traditional “meet the investor” format, with the session led by Ed Tellwright.

The panel featured investors including Will Orde from Passion Capital, Melanie Goward from Maven Capital Partners, Stan Williams from Octopus Ventures, Jonny Laughton from Volution Ventures, and Alex Mayall from Anthemis Group.

The goal was simple: move beyond pitch theatre and into real conversations, practical insight and genuine deal flow.

This article distils what founders need to know when raising funding today, with clear takeaways across pre-seed, seed and Series A+.

1. Start with how the funding ecosystem actually works

A key point often misunderstood:

• The British Business Bank does not invest directly into startups

• It acts as a limited partner (LP), backing venture funds and lenders

• Founders should focus on those delivery partners (VCs) when raising

This matters because it shapes how capital flows and where founders should spend their time.

Alongside this, the panel reinforced that not all VCs are the same. Each has different:

• Stages (pre-seed → growth)

• Cheque sizes

• Sector focus

• Risk appetite

For example:

• Passion Capital: early-stage fintech, ~£400k–£500k

• Octopus Ventures: broad stage, from ~£100k upwards

• Maven Capital Partners: regional + national, £150k–£20m

• Volution Ventures: later stage, ~£2.5m initial

• Anthemis Group: pre-seed & seed, £700k–£3m rounds

Takeaway: fundraising starts with targeting the right investor, not just any investor.

2. What changes across pre-seed, seed and Series A

While every business is different, the expectations shift clearly by stage.

Pre-seed

• Decision is founder-led

• Minimal formal diligence

• Increasing openness to solo founders (driven partly by AI capability)

• Strong focus on:

  • learning speed

  • hiring potential

  • clarity of thinking

One insight that stood out: investors are backing founders who can hire A-players, not just build product themselves.

Seed

• Early traction becomes important

• Investors look for:

  • initial product-market fit signals

  • customer validation

  • first meaningful revenue (often ~£100k+)

Founder salary expectations also emerge here:

• Typical range: £60k–£100k

• Too low → risk (financial stress)

• Too high → concern (capital misuse)

Series A and beyond

• Data replaces narrative

• Focus shifts to:

  • revenue scale (often £4–5m+)

  • growth rates

  • repeatability of sales

Diligence becomes more structured, often including third parties.

Takeaway: early stages are about belief, later stages are about proof.

3. Growth matters more than timing

One of the clearest signals from the panel:

• Investors are flexible on how long it takes to get started

• They are not flexible on growth once it starts working

What matters:

• £0 → £100k revenue: can take time

• £100k → £1m → £10m: must accelerate

In regulated sectors like fintech, delays (e.g. FCA authorisation) are expected. But once live, momentum is everything.

Takeaway: it’s not about starting fast, it’s about scaling fast once you start.

4. The founder story, without the jargon

“Founder story” is often overused, but the panel broke it down clearly.

Investors are asking:

• Is the problem real and meaningful?

• Is the solution genuinely better?

• Can this become a venture-scale business?

That’s it.

But delivery matters just as much:

• Can you explain it clearly (no jargon)?

• Can someone else repeat it internally?

• Can you sell it to:

  • investors

  • customers

  • hires

One nuance that stood out: your story must translate internally within a VC firm. If the partner cannot clearly explain it to their investment committee, the deal often fails.

Takeaway: clarity and repeatability of your story are critical.

5. Fundraising is a network game, not a pitch exercise

Across all investors, one theme was consistent:

• The vast majority of deals come through warm introductions

• Cold outreach rarely converts on its own

Strong sources of introductions include:

• other founders

• existing investors

• lawyers, advisors, ecosystem connectors

A practical approach founders can use:

• Always ask: “Who else should I speak to?”

• Turn one conversation into two, then four, then eight

• Run fundraising as a full-time, structured process

One investor described it as a “militaristic discipline” exercise.

Takeaway: success comes from building momentum across conversations, not chasing one yes.

6. Due diligence: what actually breaks deals

Contrary to expectation, most deals don’t fail because of technical issues.

They fail because of trust.

Common issues:

• overstated traction or contracts

• inconsistent messaging

• weak or conflicting references

Other friction points:

• messy cap tables or option pools

• overly complex legal structures

• unclear ownership across entities

But most of these are fixable.

What isn’t fixable:

• a breakdown in trust early in the relationship

Takeaway: transparency beats perfection.

7. Fractional vs full-time: what investors really think

This came through in several discussions and questions.

Fractional roles can work:

• in early stages

• for specialist functions (e.g. compliance)

But investors expect:

• a clear path to building a core, committed team

• evidence that the founder can hire and retain strong people

Concerns arise when:

• key roles (especially product/tech) remain fractional too long

• the business lacks long-term ownership in critical functions

One investor framed it simply:

“We’re backing founders who can build teams, not just assemble them.”

There is also a deeper point:

• early team dynamics matter

• “assembled” teams without shared history can break under pressure

Takeaway: fractional can start the journey, but it cannot be the destination.

8. What signals strength (and what doesn’t)

Positive signals

• strong learning velocity

• clear customer validation

• ability to attract talent through mission

• consistent execution vs promises

The EY research reinforced:

• culture is a learning system, not a slogan

• mission attracts and retains talent (even in B2B)

• hiring for attitude often outperforms hiring for perfect CVs

Common red flags

• “about to sign” deals that never materialise

• over-reliance on big-name advisors with little involvement

• overly engineered structures (e.g. unnecessary Delaware setups)

• rigid valuation expectations and artificial deadlines

• decks full of jargon and unclear positioning

Takeaway: investors look for evidence, not optics.

9. How VCs think about returns, risk and follow-on

Understanding this helps founders position themselves better.

Returns

• Funds typically target ~3x overall return

• Individual deals:

  • 3x–10x expected

  • top performers return the entire fund

Growth vs profitability

• Profitability is not required early

• Reinvestment into growth is expected

• What matters is trajectory and market response

Follow-on funding

• Internal support alone is not enough

• External investors validate progress

A key question investors ask:

• “Is there a credible next round here?”

Takeaway: you are always building towards the next milestone, not just this round.

10. Practical advice founders should act on now

Fundraising strategy

• target investors by stage and thesis

• build warm introductions

• run a structured, time-bound process

Timing

• raise when momentum is strong

• avoid raising when cash is critically low

Capital decisions

• don’t over-optimise for dilution early

• consider taking slightly more capital for runway

Execution

• keep the business performing during fundraising

• don’t let growth stall while raising

Communication

• say what is true, not what might happen

• keep messaging simple and repeatable

Takeaway: the best fundraises are built on momentum, not urgency.

Closing: building from the South West, competing globally

What came through clearly is that the South West fintech ecosystem is no longer emerging, it is competing.

Investors are paying attention. Capital is available. But expectations are sharper, and competition is higher.

For founders, the opportunity is real:

• access to active investors

• a collaborative regional ecosystem

• growing national and international visibility

For FinTech West, the role is equally clear:

• connect founders with capital

• create environments for meaningful conversations

• help translate regional strength into global opportunity

If you’re building, scaling or raising:

• join the FinTech West community

• attend upcoming events

• tap into the network for introductions, insight and support

Because in today’s market, access, relationships and clarity are not advantages, they are prerequisites.