Funding Your Deeptech Startup: From Idea to MVP to MLP

Why deeptech funding is different

For most consumer or SaaS startups, the roadmap to venture capital is relatively clear: get traction, show metrics, and line up a seed or Series A. But for deeptech founders — especially university spinouts and PhDs — the path looks very different.

Building in AI, quantum, clean energy or healthtech often means years of research, significant technical risk, and little revenue at the outset. That makes traditional VC money at the idea stage unlikely — or at least a very time-consuming hurdle. Instead, the critical question is: how do you fund the journey from lab bench to a product people love, before VCs are even an option?

The answer lies in aligning your fundraising strategy with the three earliest stages: Idea → MVP → MLP.

Stage 1 — Idea to MVP: proving you can build

At this point, your “product” might be a prototype in development, or even a proof of concept buried in lab notes. What you’re raising against isn’t traction — it’s credibility.

Early backers want to see:

• Your command of the problem space (founder-market fit for researchers)
• A roadmap for turning research into a product
• Early signals of commercial potential, even if distant

Universities and accelerators play a critical role in shaping the direction of a startup here. Candice Middleton, Innovation and Entrepreneurship Manager at Imperial SuperConnector, says:

“We see some of the most innovative research at its earliest stages — our ethos is centred on the researcher themselves: helping them build their story and understand their market. This is the most effective way we can help them turn deep research into an impactful venture.”

What both investors and grant assessors respond to at this stage is not just the science itself, but the clarity of the story around it. Founders who can explain why their research matters, who it helps, and why now is the time to act are far more likely to cut through. Chris Ellis, Scaleup Director at Innovate UK Business Growth, adds:

“Switching from academic writing to a more story-led narrative can feel counterintuitive for researchers. But building a narrative that focuses on commerciality and economic potential, rather than the science alone, is crucial to crafting a strong grant application.”

Funding routes to target

• SEIS-eligible angel funding — de-risks early believers with 50% tax relief
• Research & innovation accelerators — from universities such as Imperial SuperConnector and SETSquared, or commercial accelerators like STAC‍
• Innovation grants and readiness programmes — Innovate UK iCURE,  Innovate UK grants or sector specific calls

Stage 1 checklist

• Problem statement with evidence of its scale potential, crafted into a solid narrative
• Clear tech roadmap (from lab to pilot prototype)
• Company formation and SEIS advance assurance secured
• Basic IP ownership clarified

Stage 2 — MVP to MLP: proving people care

An MVP shows your research can become a product. An MLP — “minimum lovable product” — shows people actually care about it.

For deeptech, this often means pilots, research partnerships, or early adopters willing to integrate and test your technology. The goal isn’t mass adoption yet, but evidence of resonance:

• Active pilot users or industrial partners
• Qualitative feedback (“this would transform our process”)
• Early traction in a research-to-market community
• Data that validates performance, safety, or efficiency

Funding routes to target

• Sector angels and syndicates — often academics turned operators, who “get” the science, like Cambridge Angels and Oxbridge Angels
• Specialist pre-seed/seed funds — such as SCVC, or AI Seed Fund
• Matched innovation grants — Innovate UK and UKRI programmes that require equity alongside public money

This is where grants become a cornerstone. But, as Chris Ellis points out, they come with strings.

Ellis explains: “Winning a grant is brilliant — but founders sometimes underestimate what comes next. Most Innovate UK grants require a 70–30 or 60–40 contribution, which means you still have to find the missing money to unlock the award. And because funds are drawn down retrospectively, you need the cashflow to deliver milestones before reimbursement. Grants can be game-changing, but only if you go in clear-eyed about the match funding and the discipline they demand.”

Avoiding wasted cycles

Too many deeptech founders fall into one of two traps:

• Chasing VCs too soon — approaching institutional money before traction exists, leading to wasted time and credibility risk
• Underestimating grants — winning one, but lacking the ability to match the grant or the cashflow to execute, stalling progress

The best founders:

• Use grants plus early angel equity to reach MVP and MLP — be raising whilst applying
• Frame their story as clearly as their science - both Middleton and Ellis highlight this
• Build trust with potential VCs early, but don’t pitch until they can show proof of adoption

Takeaway for deeptech founders

If you’re a spinout or researcher founder, your next raise isn’t about blitzscaling. It’s about proving — in sequence — that you can build, and that someone cares.

Actionable step: Before you reach out to any potential investor, ask: what am I proving in the next 12 months — and who is best placed to back that proof?

Focus on the funding sources designed for early deeptech: SEIS angels, university accelerators, and grants. Treat VC as a future partner — not your first port of call.

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