INSIGHTS / Blog

Raising your first (or next) round of investment can be a defining moment for your start-up, but what does it really mean to be “investor-ready”? For early-stage founders in deep tech, this can be a particularly foggy question.

Every investor will have their own lens. But there are consistent signals most Venture Capital (VC) firms look for at the pre-seed, seed and Series A stages, not as rigid gates, but as indicators of progress, clarity and potential. Below is a practical checklist to help you assess where you are and what might need attention before you fundraise. Think of it not as a pass/fail test, but as a tool to prioritise and prepare.

1. A capable, committed team

Investors often say they invest in people first. They want to see:

• Founders with relevant domain knowledge or technical expertise.
• Evidence of commitment (e.g. full-time roles, skin in the game).
• Complementary skills across technical, commercial and operational areas, or a clear plan to fill gaps.
• Shared vision and cohesion between co-founders.

Red flag: a purely technical team with no commercial lead, or signs of founder misalignment.

2. Clear problem – solution fit

You should be able to clearly explain:

• The real-world problem your product solves and for whom.
• Why this problem is urgent, valuable or underserved.
• How your solution is meaningfully better than alternatives.

This is particularly important in sectors like climate tech or healthcare, where regulatory complexity and customer conservatism mean clear value is essential.

Red flag: unclear proposition, no validation or solving a problem that doesn’t seem worth solving.

3. Defensible technology and/or IP

Especially in deep tech or science-based ventures, investors want to understand:

• What is technically novel or hard to replicate?
• Is there intellectual property—patents, proprietary data or protected know-how?
• What stage is the tech at (e.g. TRL 4–7)? What’s been proven so far?

This doesn’t mean the technology has to be finished, but the core risks should be understood and partially de-risked.

Red flag: weak differentiation, no tech roadmap, or IP status unclear.

4. Early traction or market validation

You don’t need to be revenue-generating (especially in R&D-intensive sectors), but some evidence that the market wants what you’re building is crucial. This might include:

• Pilot projects or Letters of Intent (LOIs).
• Paid trials, partnerships, or initial user feedback.
• Competitive grant awards or corporate interest.

Red flag: building in isolation with no user or customer engagement to date.

5. A clear route to market

How will you reach and convert customers? Investors are looking for:

• A Go-to-Market (GTM) strategy that makes sense for your sector and buyer.
• Defined customer personas and insight into buying behaviour.
• Early thinking on pricing, sales channels and partnerships.

Red flag: vague or over-optimistic assumptions (“we’ll go viral” or “they’ll come to us”).

6. Realistic market opportunity

You need to demonstrate:

• A Total Addressable Market (TAM) big enough to support venture-scale growth.
• A credible beachhead—a first segment you can actually win.
• Awareness of competitors and your differentiation.

This doesn’t mean claiming you’ll capture 5% of a £10 billion market. It means showing you know who you’re targeting and why.

Red flag: inflated TAM or “we have no competitors” claims.

7. Business model and financial story

Investors know early financials are part science, part storytelling, but they’ll still want to see:

• A basic financial model and use of funds plan.
• Understanding of key drivers: unit economics, margins, cost base.
• Clarity on your business model and how it will evolve over time.

Red flag: no model, no plan for monetisation, or unrealistic burn rate assumptions.

8. A cohesive fundraising narrative

Finally, you’ll need:

• A compelling pitch deck that ties all of the above together.
• Clear messaging on what you’re raising, why now and what it unlocks.
• Thoughtfulness around valuation, dilution and the path to follow-on funding.

Investors are looking for a credible story, not perfection. The goal is to show progress, honesty and ambition.

Red flag: over defensive answers, inconsistent messaging, or unclear funding ask.

What you don’t need (yet)

Good news: you don’t need £1 million in revenue or a full exec team to be investable. Most early-stage VCs understand that innovation-led startups (especially in deep tech) take longer to build and commercialise. They expect uncertainty. What matters is that you’re tackling those unknowns head-on, with the right mindset and support.

Where support can help

Start-up support programmes, like those run by SETsquared, can help you close many of these gaps, from pitch development and market access to grant funding and investor introductions. Building investor readiness is a process and you don’t have to do it alone.

Whether you’re gearing up for your first raise or refining your Series A story, taking stock of your readiness is a smart move.