Paul Munn

Scotland has long punched above its weight in innovation, producing businesses that can compete on the global stage. From world-leading fintech firms to cutting-edge life sciences ventures, our entrepreneurial talent is abundant. Despite this strength, a persistent challenge continues to hold back the country’s most ambitious businesses: access to early-stage and growth capital.

Recent research from MFMac highlights what many in Scotland already knew, with almost half (48%) of Scottish business leaders surveyed rating the availability of investment capital in Scotland as scarce or very scarce, with only a small minority describing it as readily accessible. The consequence is clear: talented entrepreneurs, particularly repeat founders with bigger ambitions, often struggle to secure the funding they need to scale. This challenge is particularly critical for first-ticket or pre-seed funding, where highly innovative companies often face a funding gap that limits their ability to pursue transformative ideas. Too many promising businesses are forced to focus on defensive strategies - boosting revenue where possible, tightening operational efficiencies - rather than pursuing bold, growth-oriented initiatives.

This capital gap is not just a matter of individual business frustration; it has wider implications for the Scottish economy. If ambitious founders cannot access the resources to scale, the country risks losing its competitive edge. International investors and domestic institutions alike are increasingly looking for high-quality opportunities, yet many of Scotland’s most promising early-stage companies remain underfunded and under the radar.

Addressing this challenge requires a coordinated approach. A more dynamic early-stage funding landscape is essential to support ambitious entrepreneurs from the very first round. Government-backed initiatives that act as early customers, co-investment schemes, or seed funding mechanisms can help unlock private capital, giving founders the confidence to pursue larger, riskier projects.

Equally important are fiscal incentives and tax structures that encourage reinvestment and long-term growth. By reducing barriers to scaling, these measures allow businesses to invest in talent, technology, and international expansion. At the same time, networks connecting founders with experienced investors, mentors, and advisors can provide practical guidance, helping businesses navigate growth challenges while attracting the funding necessary to reach the next stage.

Repeat founders are a particularly valuable resource. Entrepreneurs who have successfully built ventures bring experience, credibility, and insight - but they are often overlooked by traditional early-stage investors focused on risk mitigation. Supporting these founders through tailored funding mechanisms can accelerate the development of companies capable of transforming sectors and markets, creating lasting economic impact.

The broader implications of unlocking early-stage capital extend beyond individual businesses. Encouraging ambitious growth fosters innovation, drives productivity, and creates jobs, strengthening the overall economy. Scotland has the talent, ambition, and vision to compete globally - but only if the structural gaps in funding are addressed and founders feel empowered to pursue bold strategies.

Ultimately, unlocking Scotland’s growth potential is about more than capital; it is about confidence. Confidence that businesses, including the next generation of highly innovative start-ups, can innovate without fear, scale successfully, and make strategic decisions with a long-term perspective. By addressing the structural challenges in early-stage funding, Scotland can ensure that ambition is not constrained by the limitations of available investment. With the right ecosystem covering pre-seed support, repeat founder funding, and networks connecting talent to capital – the country can foster a new generation of globally competitive businesses, securing economic growth and prosperity for years to come. Through initiatives like those we champion at PXN Group, we can help ensure ambitious founders have the support and confidence to scale globally.

Paul Munn is executive chair of PXN Group