What Are Institutional Brokers and Why Should Founders Take Notice?

For many founders, raising capital starts with angels and accelerates toward venture capital. But between those stages lies a lesser-known option: institutional brokers. These corporate finance professionals can open doors to high-value investors that are typically inaccessible to early-stage founders. While not suitable for every business, brokers can play a pivotal role in scaling a company’s capital strategy if you know how and when to engage them.

In this guide, we break down what institutional brokers do, how they operate and who they work with. You’ll also learn how ThatRound helps startups assess and compare them for better business decisions.

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What Is an Institutional Broker?

An institutional broker is a corporate finance advisor who helps startups raise investment by connecting them with institutional-grade capital. This includes venture capital firms, family offices, private equity funds and large-scale corporate investors. Brokers are considered a type of fundraising service (not investors themselves) and are classified as partners on the ThatRound platform.

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They typically focus on larger funding rounds, often starting at £1 million and rising well into Series A or B territory. Most operate on a hybrid fee model: charging an upfront retainer to cover advisory work, alongside a success fee if the round closes. In return, they position the startup’s deal in front of investors who rarely source deals through open platforms or cold inbound.

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How They Work

Engaging with an institutional broker typically begins with strategic preparation. The broker works with the startup to structure the raise, refine the investor narrative and prepare a full suite of fundraising materials. This can include the pitch deck, financial model, executive summary, data room content and valuation guidance.

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Once the round is packaged, the broker curates a shortlist of suitable investors based on sector, stage and cheque size. They then make warm introductions to their investor network and help manage ongoing communications, including Q&A, meeting coordination and feedback loops.

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Some brokers also support legal documentation and term sheet review, ensuring founders have the guidance needed to navigate complex negotiations. This advisory role, paired with access to capital, is what makes institutional brokers particularly valuable for growth-stage companies with significant ambitions.

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Who Are They?

The institutional brokerage landscape includes a wide mix of players, from boutique corporate finance firms to former investment bankers operating independently. Many have backgrounds in private equity, M&A, or venture capital, bringing both transactional experience and deep industry insight. Some operate under FCA-regulated structures, while others rely on their personal networks and reputation to attract mandates.

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Specialisation is common. Some brokers focus exclusively on sectors like fintech, medtech or deep tech, offering tailored investor connections and domain-specific fundraising advice. Others differentiate by stage, working only on Series A and later rounds. This focus can be especially valuable for startups in regulated industries or emerging technologies, where credibility and targeted networks matter most.

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The range in service quality, pricing models and transparency among institutional brokers is considerable. As a result, founders need to research carefully before committing to any such brokerage service. Matching with a broker who truly understands your sector, stage and investor profile will typically improve your chances of investment success to a considerable degree

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What Startups Do Institutional Brokers Work With?

Institutional brokers tend to focus on companies that have already proven market fit and are preparing to scale. Most of the deals they support fall into the £1 million to £5 million range, though some brokers operate at higher levels.

Founders engaging brokers should be able to demonstrate revenue, defined KPIs and a credible path to growth. The target audience for these brokers are institutional investors who will expect detailed financials, clarity around unit economics and well-structured business models. Many brokers won’t consider deals that are too early, speculative or reliant on unvalidated assumptions.

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That said, a small subset of institutional brokers do operate at the seed stage, particularly if there’s a strong team, a compelling technology or an unusually large market opportunity. In all cases, founders should be prepared for rigorous due diligence and a demanding process.

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The Pros and Cons of Working with an Institutional Broker

Choosing to work with an institutional broker can unlock new growth opportunities, but it’s not without trade-offs.

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Advantages:

On the positive side, brokers bring deep investor networks and the ability to position a round in ways that elevate credibility. This can result in larger cheques being issued but also a greater strategic alignment and a more competitive fundraising process, too.

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Many brokers also act as advisors, helping founders navigate valuation discussions, legal terms and investor expectations, often compressing timelines and improving outcomes. Their involvement can also increase confidence among cautious institutional investors who may be wary of unmediated early-stage deals. Just as importantly, by outsourcing parts of the fundraising process to a broker, founders can stay focused on running the business, thereby maintaining operational momentum while still moving toward their capital goals.

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Challenges:

However, the brokerage model comes with challenges. Upfront retainers can be expensive and are sometimes payable regardless of the round’s success. Brokers may be selective, showing little interest in pre-seed or SEIS-eligible stage companies. There’s also the risk of misalignment: some brokers prioritise deal closure over founder interests, which can lead to pressure around investor selection or valuation. Founders must enter these relationships with clear expectations, a robust understanding of terms and the ability to assert boundaries during negotiations.

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Access and Transparency

Despite their potential value, institutional brokers remain surprisingly opaque. There’s no central directory and quality varies widely. Many founders hear about brokers only through peer referrals or investor intros, making it difficult to compare options or evaluate fit.

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ThatRound tackles this problem head-on by listing and categorising brokers as part of its broader fundraising services marketplace. Each entry includes data on deal stage, sector focus, investor reach, and fee structure, thereby allowing founders to compare options based on objective criteria, rather than relying solely on anecdotal recommendations.

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With tools for service filtering, round management and legal standardisation, ThatRound gives startups a more transparent, structured and founder-first route to engaging institutional brokers. Whether you're exploring your first £1 million raise or planning a later-stage round, the platform helps ensure you're choosing the right partner and not just the first one you find.

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