How to Raise Venture Capital and NOT Destroy Your Startup: Lessons from an Ex-VC

What Does It Take to Raise Venture Capital Without Destroying Your Startup?

Kiran Mehta spent four years as an Investment Manager at Mercia Ventures, deploying over £20 million into 11 early-stage tech companies. He sat on every board. He reviewed thousands of pitch decks. Then he quit.

He didn’t leave because he stopped believing in venture capital. He left because he wanted to be in the building, not watching from the boardroom. He founded Catenae Advisory, where he now works as a fractional COO/CFO inside B2B software businesses, helping them get from seed to Series A. He also works with Lancashire County Council’s fhunded programme, connecting founders with investors across the region.

What makes this conversation different is that Kiran is pro-VC. He’s seen what it can do. But he’s also seen founders raise when they shouldn’t, take bad terms because they didn’t know better, and grind themselves into the ground chasing capital they didn’t need. This episode is about knowing the difference.

GUEST BIO

Kiran Mehta is the founder of Catenae Advisory, a fractional COO/CFO practice working with B2B SaaS businesses on the seed-to-Series A journey. Previously Investment Manager at Mercia Ventures, he invested across B2B SaaS, deep tech and hardware from Mercia’s EIS Funds and the Midlands Engine Investment Fund.

Before VC, Kiran worked in corporate banking at Lloyds Banking Group and helped build the Housing Growth Partnership, a social-impact real estate equity fund. He’s a UCLan graduate who broke into venture capital without a finance degree or investment banking background.

He now splits his time between Catenae’s retained clients and Lancashire County Council’s fhunded programme, where he curates deal flow for an angel syndicate and helps founders get investment-ready.

Agenda:

• Cold Open: Four clips setting the tone: hard work as a ticket to play, the 8-day US raise, the SME wealth comparison, and the accelerator critique.

• Introduction : Kayode introduces Kiran. Pro-VC but honest about who shouldn’t raise.

• Getting Into Banking

  • Jack of all trades, graduate scheme, took the job nearest to home.

  • "As long as the next move is better than the one you’re in now, just do that."

• Banking 10 Years Too Late

  • Government-owned bank, mass headcount reductions, low risk appetite.

  • The lesson: company size doesn’t matter. Growth rate does.

• The Housing Growth Partnership

  • Startup inside a bank. 15 people. Managing outsourced marketing with zero experience.

  • Building a prospectus over weekends using YouTube videos, pre-ChatGPT.

• Breaking Into VC

  • Applied for a dozen PE/VC roles. Feedback: "Unless you’re a chartered accountant, no thanks."

  • Got in through a warm contact he’d met quarterly for two years. First day was two days before lockdown.

• What Is VC and How It Differs from PE

  • Ex-PE guys running VC funds create a difficult experience for founders.

  • Heavy on structure, slow on process.

• UK vs US Venture Capital

  • The 8-day raise story. Speed, check size, valuation.

  • Founders fundraising as a full-time job, ground down after 3-6 months.

• Financiers vs Operators

  • "You can’t grind someone down for 6 months of due diligence and then say no at the end."

• [18:30] Why He Left VC After Four Years

  • Loved portfolio work, hated investment committee papers.

  • "I don’t like working with people" interview story. High index for freedom and autonomy.

• When VC Works: How Rare Are Big Outcomes?

  • Five software unicorns in the UK in the last 10 years that were still VC-backed to exit.

  • The North of England wealth observation: SME owners exiting at 7-8 figures owning 80-90%.

• Assessing Founders

  • The pitch deck is almost irrelevant. VC due diligence indexes highly for extroverts.

  • The real signals are underneath: decision speed, team cohesion, ability to pivot.

• Venture Scale Maths

  • £5m valuation, 50x return needed, half a billion pound exit required.

  • "Someone puts £3-4m in front of you, you could probably retire in your 20s."

• Why Most Founders Shouldn’t Raise

  • The accelerator critique. Two legitimate uses for VC.

  • The bootstrap-first-then-raise argument.

• The Deal He Missed

  • First saw the founder at £800k post-money. 18 months later, raising at £8m.

  • Just texted about a £10m SAFE and £40m raise from US investors. Implied £200m valuation.

• Life After VC: What Catenae Does

  • Fractional COO/CFO work. fhunded angel network.

  • Getting into the weeds by design. "The pitch deck is 5% of the story."

• Preparing for Fundraising

  • You can’t short-circuit time. Months to get infrastructure in place, then six months of data.

  • Value proposition, go-to-market, unit economics. Get those three right and investor conversations become easy.

• Will the UK Catch Up With the US?

  • "The UK will never catch up with the US." The competitor slide analogy.

  • Stop comparing, start measuring against ourselves.

• UK Exits and the Secondaries Problem

  • Let founders sell 20%, pay off the house, then they’ll swing for bigger outcomes.

  • "Everyone points to WeWork, but that’s one."
    

• Quick Fire

  • Bootstrap on day one. Hard work is only a ticket to play.

  • Pedigree helps but deep industry experience and traction can override it.

KEY TAKEAWAYS

• Know the maths before you raise. If a VC needs 50x on their winners, they need to believe your business can be a £500m exit. If that’s not realistic for your market, VC is the wrong capital. That doesn’t mean your business is bad. It means you need a different route.

• Your network is your fundraising strategy. Kiran got into VC because he met someone every quarter for two years out of genuine curiosity. Not transactional, not asking for a job. When the role came up, he already had the answers. Same applies to raising. The warm intro matters more than the pitch deck.

De-risking is not giving up.The secondaries argument applies to founders at every stage. If you can take some chips off the table and keep building, you’ll make bolder decisions. The founders who sell at £10m often do it because they can’t afford not to.

THE 23MILE PLAYBOOK

• The pitch deck is almost irrelevant. What matters is how fast you make decisions, how well the team works together, and how quickly you can pivot. None of that shows up in a deck.

• VC has two legitimate uses. Unblock a problem you can’t solve without capital, or pour fuel on growth that’s already proven. Everything else is probably better bootstrapped.

• 8 days vs 8 months. A friend raised nearly £1m in the US in 8 days. Kiran has never seen a UK deal close in less than 8 weeks. Some take 8 months. Speed is the single biggest difference between US and UK venture.

• The wealthy people around him didn’t raise VC. Most people he knows who don’t go to work anymore built small SMEs, exited for 7-8 figures, and owned 80-90% of the business. VC is the exact opposite game.

• Fundraising is a full-time job that destroys momentum. Three to six months is the UK average. By the time founders close, they’re ground down and there’s always a gap before they get back to building.

• Accelerators can give bad advice. If the only metric is how many companies got funded through the programme, founders aren’t getting honest guidance about whether they should raise at all.

• The secondaries problem is holding back UK exits. Let founders sell 20% to de-risk. Once the house is paid off, they’ll turn down the £10m offer and swing for £100m instead.
  

Memorable Quotes

“Hard work is only a ticket to play. If you don’t put the hard work in, you won’t be successful. But if you do put the hard work in, you still might not be.” — Kiran Mehta

“What’s in the pitch deck is almost irrelevant. It’s how quick can you make decisions, how well does the team work together. None of that makes it into the pitch deck.” — Kiran Mehta

“The majority of people I know that don’t go to work have run small SMEs and exited for 7 or 8 figures, owning 80-90% of those businesses. VC is the exact opposite game.” — Kiran Mehta

“I’m yet to see a deal in the UK that gets done in less than 8 weeks. And I’ve seen some deals that have taken 8 months. That’s not an exaggeration.” — Kiran Mehta

“If your only metric is the amount of funds raised through that program, I don’t think you’re giving founders the best advice.” — Kiran Mehta

“You could replace US and UK with funds run by financiers and funds run by ex-operators.” — Kiran Mehta

“The pitch deck is 5% of the story.” — Kiran Mehta

FRAMEWORK

Kiran’s Two Legitimate Uses for VC:

1. Unblock a problem (you can’t build the first product without capital)

2. Pour fuel on proven growth (unit economics work, you just want to go faster)

Everything else? Bootstrap first, then raise if and when you need to.

Resources Mentioned

Companies:

• Mercia Ventures,

• Catenae Advisory

• fhunded (Lancashire County Council),

• Deliveroo,

• Figma

• WeWork

• Lovable

  Concepts:

• EIS Funds,

• Midlands Engine Investment Fund

• SAFE notes

• Rolling close,

• Secondaries market

• Seed-to-Series A journey

• OKRs/KPIs

• Customer acquisition cost
  
  CONNECT WITH KIRAN

  LinkedIn: linkedin.com/in/kiranmehtakhm

  Catenae Advisory: hubble.social/kiranmehta

  fhunded: fhunded.com