UK risks becoming ‘nation of company sellers’ rather than scale-ups

The UK is at risk of becoming a nation of company sellers rather than scale-ups, as a rising number of business owners consider whether the rewards of further growth justify the risk and effort, Rathbones Group has warned.

The wealth and investment management firm analysed nearly 28,000 UK businesses sold between 2018 and 2025, as well as trends in start-up and scale-up funding.

The number of UK businesses sold each year has increased by 70 per cent over the past seven years, with sales accelerating in the most recent two years.

Annual sales rose from 4,989 companies in 2023 to 5,684 in 2024 and to 5,774 businesses in 2025.

Rathbones said that while selling a business was often a sign of entrepreneurial success, its conversations with business-owner clients indicated many felt ‘fed up’.

This disenchantment, combined with a shortage of growth-stage funding, was driving many to sell their companies early.

Although Britain attracts a similar share of global venture capital investment at the start up stage as the Bay Area in California, this fell to just 6 per cent at the breakout stage and 5 per cent at the late-growth stage, compared to 16 per cent and 48 per cent, respectively, for the Bay Area.

"The UK doesn't have a start-up problem; it has a scale-up problem,” commented Rathbones head of Manchester office, Richard Greenhalgh.

“We speak to business owners who are still generating sales but tell us that the sacrifice and effort required to reach the next stage of growth is becoming increasingly hard to justify and deliver.

“The challenge is that early-stage scaling can be inherently high risk, making it important to create an environment where investors can be rewarded for supporting promising young businesses through their next phase of development, as well as more established companies."

Rathbones’ analysis found that businesses that completed five or more funding rounds were more than three times as likely to create significant founder wealth as those completing just one.

The group said this emphasised the importance of access to capital throughout the growth journey.

“Britain creates no shortage of ambitious businesses,” said Rathbones senior investment director, Dominic Hughes.

“The bigger challenge is helping them stay independent long enough to fulfil that ambition and deliver the growth the country needs.

"It isn't hard to understand why some founders decide to sell. Growing a business takes years of effort, personal sacrifice and often repeated rounds of funding.

“If that journey becomes harder and the rewards become less certain, many will understandably decide to cash in earlier than planned.

"The risk is that businesses with the potential to become the next generation of major British employers are sold before they reach that stage.

“When that happens, we don't just lose future founder wealth. We risk losing future employers, exporters and regional success stories too."

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