Investability Ratings: Why the UK Can’t Afford to Wait

Credit ratings have been around for over a century. They are ingrained in global finance, guiding investors on the relative risk of bonds, loans, and other financial instruments. Yet in all this time, the startup ecosystem—a sector that drives innovation, jobs, and economic growth—has lacked an equivalent system: investability ratings.

However, this no longer needs to be the case. Today, AI can assess vast amounts of data in seconds, analysing a startup’s business plan, team, market traction, financials, governance and a lot more. What once took weeks or months for an experienced analyst can now be delivered almost instantly, providing objective, standardised insights into which startups are most likely to succeed.

The urgency could not be higher. UK economic growth is floundering. 90% of startups/SMEs cannot get the funding they need to grow with pension funds ranking well behind many other countries in investing in innovative startups.

The UK Government, through initiatives like the Mansion House Accord, is therefore encouraging pension funds to deploy capital into innovative startups. However, they lack the expertise, knowledge and tools to confidently invest in early-stage companies and baulk at paying high, fees to VC fund managers, to do so.

We are standing at a unique inflection point. The current wave of AI-driven innovation—and the data infrastructure that supports it—won’t come around again for another 20 years. Bold and quick action is required to increase investment.

The next three years are critical. Investability ratings for startups seeking Series A, B, C, or D funding, can add value to the NOVA proposal helping unlock the capital needed to fuel the companies that will shape the UK’s economy for decades. And, we are therefore trying to bring stakeholders, policymakers, investors and the startup community together to define assessment and rating standards.

The clock is ticking. The Government has provided the mandate, and the market is ready. AI combined with human expertise provides the capability to generate ratings at significantly lower cost. Now is the moment to turn investability ratings from an idea into a system that drives prosperity. Delay, and the opportunity may be lost for a generation with more and more innovative startups deciding to set up in the USA, Dubai or elsewhere. Act, and the UK can lead the world in investment-ready innovation.