Don't invest unless you're prepared to lose all the money you invest. This is a high-risk investment and you are unlikely to be protected if something goes wrong. Take 2 mins to learn more.
.By Tom Britton
For UK angels, 2025 was a year of stark contrasts. As we enter 2026, those contrasts are hardening into a "two-speed" market: a high-octane race for AI infrastructure on one side, and a calculated, value-driven approach to the broader ecosystem on the other.
Our super-angels describe 2025 as a year defined by polarisation. While AI dominated the headlines, the underlying reality for many startups was one of increasing friction.
One super-angel observed: "There is a polarisation between highly competitive and often over-priced rounds for AI infra on the one hand, and market reluctance to fund A and B rounds for promising non-AI businesses."
This has led to a climate where the hurdle for non-AI companies remains high.
Another investor noted the "extent to which non-AI companies are struggling to raise," while AI itself has become a "difficult space for angels to access" as Tier 1 VCs move earlier and earlier into the seed stage to avoid FOMO.
The 2026 outlook is heavily influenced by the fiscal changes introduced in the previous year. The UK's competitiveness relative to the US remains a primary concern for the country's top backers.
The US magnet: Sophisticated investors are increasingly weighing the UK's regulatory burden against the US's economic momentum. As one respondent put it: "Trump has presided over an economy that is in a different gear than the UK... Jobs, taxes, higher income, capital gains, and carry make it difficult to be bullish about the UK vis-a-vis the US."
The domestic shortfall: This gravity pulls at our best founders. Our survey respondents highlighted "insufficient incentives for UK-founded startups to stay in the UK when US funding is so much more attractive and there are crazy salaries on offer in San Francisco." Currently, less than a third of growth capital in the UK originates from domestic investors.
The "scale and stay" solution: To counter this, SyndicateRoom has launched the SR Carry Back EIS Fund I, specifically designed to provide follow-on capital to the highest-performing companies. By using a proprietary data engine to identify "breakout" companies that have reached a verified growth inflection point—such as B2B SaaS leader Kluster or deep tech innovator Anaphite—the fund ensures the UK’s fastest-growing startups have the domestic support they need to "scale and stay".
Where is the capital flowing in 2026? Our network identifies deep tech, agentic AI, and climate tech as the sectors poised for the largest increase in investment.
In particular, climate tech has moved from a "niche" interest to a core pillar of the sophisticated portfolio. As one angel noted, the motivation is to "tackle societal issues like climate and build great businesses with great young entrepreneurs." To capture this at the earliest stage, many in our network are looking toward specialist vehicles like the Carbon13 SEIS Fund, which focuses on high-impact decarbonisation.
The strategy for 2026 is shifting from finding "the next big thing" to identifying defensibility. One super-angel noted they are becoming "much more focused on defensibility and the founder's sophistication in thinking about this," moving away from the "AI bubble" and toward businesses with proprietary data and regulatory readiness.
Beyond sector choice, 2026 is also a year for tactical tax management. The SR Carry Back EIS Fund I allows sophisticated investors to deploy capital into these data-verified scale-ups while applying tax reliefs to the 2024/25 or 2025/26 tax years. This provides a powerful tool for year-end tax planning while removing the guesswork from follow-on investing.
For those starting their angel journey in 2026, our super-angels recommend a disciplined approach:
Radical diversification: One veteran suggests setting a fixed percentage of wealth for startups and spreading it out to "make at least 30 investments... expect at least half of the companies to go to zero, give yourself a 12-year timeline... be patient."
Avoid the "early exit": Liquidity is often seen as the ultimate goal, but cashing out too soon is a hidden risk. "My second biggest [risk] is having one of my winners cash out too early, just when things became interesting," one respondent shared.
My view
2026 is the year of the "sophisticated reset." By leveraging the expanded EIS headroom, utilising a tactical carry back fund to support our best-performing scale-ups, and focusing on defensible innovation, our investors can help the UK's next generation of leaders bridge the gap and stay global.
Domestic growth capital: Less than 33% comes from UK investors.
Scale-up support: The SR Carry Back EIS Fund I targets high-performing companies at critical inflection points.
Tactical tool: Carry back tax relief available for the 2024/25 tax year.
Sector to watch: Climate tech via the Carbon13 SEIS Fund.
Please note: our office hours are weekdays, 9.30am - 5.30pm.
