The study, Unpacking the money-distance nexus: mapping the spatial configuration of exogenous entrepreneurial finance across UK entrepreneurial ecosystems, is published in Small Business Economics. Dr Rocha worked alongside Professor Ross Brown and Dr Haoran Sun from the University of St Andrews Business School and Professor Marc Cowling from Oxford Brookes Business School.
The researchers used alternative, real-time data to track how entrepreneurial finance moves across 30 UK cities. Instead of relying on traditional surveys, they analysed funding rounds recorded by Crunchbase, a business intelligence platform that monitors when companies raise external investment and identify their investors. While Crunchbase does not record investor locations in a funding round, the researchers built a complete list of UK-based investors and cross-referenced it against each deal. If an investor was not on the UK list, they classified them as international. This method provided a more accurate and up-to-date view of cross-border investment patterns than conventional survey-based approaches.
The findings show that start-ups and scale-ups located nearer London, particularly those at later growth stages, attract overseas and larger investment more successfully.
If we want to build stronger entrepreneurial ecosystems outside London, policymakers need to make it easier and more attractive for international investors to look beyond the capital.Dr Rocha
Dr Rocha said: "London's dominance is not only about better companies but also deep networks and familiarity. International investors know London well and tend to return to what they know.
"In today's fast-moving economy, policymakers need reliable, up-to-date information to make good decisions. Our research delivers faster, more accurate insights than traditional survey-based methods, which take considerable resources and might not be up-to-date when results become available.
"We also found that international deals tend to be larger. Foreign capital plays a vital role in helping UK businesses scale. Targeted incentives or government-sponsored "matching" initiatives, such as road shows to help international investors find suitable companies, could help unlock greater international investment across the UK."
Augusto Rocha is our Lecturer in Entrepreneurship and Innovation.