UK VCs admit neglecting marketing despite key to startup growth

A new report has found that venture capitalists in the UK recognise the importance of marketing for startup growth but rarely engage marketing expertise to support their portfolio companies.

The white paper, produced by Solid Water and NOTWICS, surveyed 183 UK-based venture capital firms and revealed that 69% had seen poor marketing limit a portfolio company's ability to scale. However, only 23% of those surveyed currently engage a marketing expert or partner for their investments.

Despite the widespread acknowledgement of marketing's significance, the majority of venture capitalists hesitate to treat it as a strategic lever. Only 15% of respondents felt confident evaluating marketing strategy during the due diligence process. Additionally, 61% cited lack of clear customer acquisition strategies as a significant barrier to startup growth.

The report also indicated that 62% of venture capitalists assess startups based on metrics such as customer retention and lifetime value, though many founders remain focused primarily on top-of-funnel approaches.

Research cited in the report points to a clear correlation between marketing investment and positive outcomes for startups. According to a 2024 Deloitte study, startups that allocated more than 20% of their post-Seed budgets to marketing and PR grew 2.6 times faster and were 3.4 times more likely to reach Series B funding compared to those that did not. Further data from the Harvard Business Review indicated an internal rate of return (IRR) 15–25% higher for startups supported by strategic brand-building initiatives.

"This is an imperative for the venture capital industry," says Daria Partas, Co-founder of Solid Water Growth Marketing Agency. "Sustainable growth is not a given, and for VCs to consistently generate returns and build successful portfolios, they must ensure that invested capital is deployed effectively by their portfolio companies. Our experience at Solid Water has shown us that while due diligence is crucial, integrating a growth partner with a proven track record from the outset is equally vital. We frequently encounter brilliant technology companies raising Seed or Series A rounds with profoundly inadequate marketing plans that undermine their growth and market adoption. It's disheartening to see capital wasted on initiatives that deliver no tangible value or growth. Aligning the incentives of startups, VCs, and marketing agencies is essential to rectify this."

Chris Lowe, founder of NOTWICS, stated: "This research highlights the untapped potential of strategic marketing to drive startup success. My key survey takeaway is that many VCs get growth marketing wrong, but admit they need to fix this with the majority of their portfolios. However, they generally don't apply the right level of resource and expertise to fix this. Most founders also accept that they also need help and it. LPs would have cringed if they'd heard some of the perspectives! But the golden conclusion is if you wisely spend budget on marketing and engage the right partner then you stand to succeed and make more money! Marketing agencies must also stand up to the challenge and shift their mentality from being a delivery arm to becoming a strategic partner with vested interests in the startup success. Everyone is set to benefit from this."

The report also notes calls from within the startup ecosystem to position communications and media relations alongside marketing in strategic planning. Chris Wilson, founder of Mint Gecko, commented: "In the rush to scale, too many startups overlook the power of reputation. Strategic PR and media relations aren't just about coverage - they build trust, attract talent, and open doors to partnerships and capital. At Mint Gecko, we've seen firsthand how early investment in credible, consistent storytelling can deliver real commercial returns. Some of the smartest VCs already champion this approach across their portfolios - but despite clear data and success stories, it's still a tough sell. Founders and investors alike need to rethink PR not as a luxury, but as a core growth function from day one."

The white paper recommends that venture capitalists incorporate more thorough marketing scrutiny during due diligence, provide access to experienced growth partners for their portfolio companies, and consider equity-based engagement structures to better align interests among startups, agencies, and investors.