The Capital Is There and the Returns Are Real. So Why Are Impact Founders Still the Hardest to Fund?
- Shawn Jhanji
- Jun 4
- 4 min read
A founder building a women's health product, a food system fix or a financial inclusion tool in the UK today is working on exactly the problems the country says it wants solved and yet, once again, new data suggests they are also among the hardest founders in the market to fund, and the reason is not returns. It is infrastructure.
The data
Unrest, the London based impact accelerator, has published findings from the third run of its Impact Investor Office Hours programme, and they put hard numbers on something many early stage founders already feel. The programme received 485 applications in the first quarter of 2026 from UK impact led startups seeking at least £690 million in venture capital between them. Nearly 88 per cent were raising at pre seed or seed, the stages where access to capital is hardest. The 100 startups selected for the programme were alone seeking more than £190 million.
The friction shows up most clearly in time. Crunchbase data referenced in the report finds the average duration of a seed round worth one million dollars or more has stretched to 3.3 years. Not the time between rounds. The time it takes to raise one.
Set that against the supply side and the picture becomes genuinely strange. More than 1.16 trillion dollars has been invested for impact globally. UK impact investment had reached £77 billion by 2023 and government estimates put it around £106 billion in 2025. Roughly 90 per cent of impact investors report meeting or exceeding their expected financial returns, which quietly demolishes the old claim that purpose led businesses cannot generate attractive outcomes.
The capital exists. The returns are being delivered. And the founders are spending three years raising a seed round.
The diagnosis: a plumbing problem, not a pipeline problem
Unrest co founder Orr Vinegold puts the argument plainly: durable, problem led businesses are being rationed out of the market not because the returns are absent, but because early stage capital infrastructure was not designed with them in mind. His co founder Pan Demetriou makes the same point from the founder side. Ambition and commercial discipline are not in short supply. Access is.
This publication has reported versions of this finding all year, from British Business Bank programmes rebuilding the angel pipeline to the stubborn data on who receives venture funding. What the Unrest numbers add is a clean demonstration that the problem is not a shortage of money or a weakness in the businesses. It is the matching layer in between: the mechanisms by which a founder in Leeds or Cardiff with a strong company and no warm network actually reaches the capital that claims to be looking for them.
There is a telling detail in the applicant data. Some 97.5 per cent of applicants identified as tech enabled, but only around 5 per cent as AI first. These are founders choosing tools because the problem needs them, not because they trend well in a pitch deck. In a funding market currently organised around AI as a category, businesses organised around problems risk being structurally overlooked, whatever their fundamentals.
What is changing? It's a good question!
The constructive news is that the matching layer is being built, piece by piece. Unrest's own programme compressed 222 one to one founder investor meetings into less than a week, which is precisely the kind of mechanism that replaces the warm introduction with something more efficient and more fair. Eka Ventures closed its second fund at 107 million dollars in April, becoming the UK's largest early stage impact investor. The British
Business Bank continues with their ambition to put structural money behind widening the pool of who invests, not just who receives.
And the infrastructure argument extends further than accelerator programmes. As an aside, it is not uncommon for accelerators from around the country to embark on the costly exercise of mobilising their cohorts to an event in London, to try and gain visibility and interest from investors which they cannot get at home.
So, if the binding constraint is the cost and friction of connecting founders with aligned capital, then the tools this publication tracks closely, tokenised equity, automated cap table rails and PISCES enabled secondary trading, belong in this conversation. The plumbing is ripe for modernisation and these tools and technologies provide ways to make it happen.
They attack the same friction from the other end: reducing the cost of running a raise, widening the pool of qualifying investors a founder can lawfully reach, and giving early backers a route to liquidity that does not require waiting a decade for an exit. A market where seed rounds take 3.3 years is a market begging for cheaper, faster capital formation mechanics. A market that locks investors in for five, seven, tens years is ready for frameworks that provide flexibility and enable them to access their invested capital or gains sooner. That is an efficiency argument, not an ideological one.
Where this is heading
The direction of travel seems clear enough to state with some confidence. The era in which impact founders had to argue that their returns were real is ending; the data has done that work. The next argument is about infrastructure, and it will be won by whoever builds the mechanisms that connect problem led founders to the £106 billion that says it wants to find them. Accelerators are building one version. Funds with open application processes are building another. Tokenisation and regulated secondary markets are building a third.
For founders, the practical takeaway is not to wait for the system to fix itself. The mechanisms that exist now, structured programmes, open application funds, and the emerging rails for more direct capital formation, reward founders who engage with them early. The system is in transition, and transitions favour the well informed.
Key takeaways
Unrest's Q1 2026 programme data shows 485 UK impact startups seeking £690 million, with 88 per cent raising at pre seed or seed
Average seed rounds above one million dollars now take 3.3 years to complete, per Crunchbase data cited in the report
UK impact capital has grown to an estimated £106 billion and 90 per cent of impact investors report meeting or beating return expectations
The constraint is the matching infrastructure between founders and capital, not the supply of capital or the quality of the businesses
Accelerator matching programmes, open application funds and emerging capital formation rails including tokenisation and PISCES all attack the same friction
Founders should engage with these mechanisms now rather than waiting for the traditional system to adapt
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