Unlocking Founder Potential: Why It’s Time to Rethink Liquidity at Series A
Dan Perkins, Founder Liquidity Fund, sets out the case for rethinking founder liquidity at Series A. As the UK startup ecosystem matures, he argues that enabling modest early liquidity is not a risk to ambition, but a tool to sustain it - offering founders the stability to focus, scale, and build for the long term.
The UK startup ecosystem is entering a new era. With healthy levels of early-stage investment, a maturing founder base, and a vibrant support infrastructure, the foundations are strong. Yet, for all the progress, a fundamental bottleneck remains: how we think about founder liquidity at the Series A stage.
Traditionally, liquidity has been off-limits until much later—Series C, D, or even IPO. The orthodoxy has been clear: founders should remain “all in” until the finish line. But this mindset no longer reflects the lived reality of building a startup in today’s high-pressure, high-stakes environment.
By the time a founder raises a Series A, they may have spent 3–5 years bootstrapping, working without salary, taking personal loans, and shouldering immense pressure. For many, it's not just capital that's needed—it's breathing room. Without it, burnout looms large, personal circumstances become unsustainable, and long-term decision-making can be compromised.
Offering modest founder liquidity at Series A could be a game changer. It’s not about “cashing out early.” It’s about de-risking just enough to unlock energy, focus, and ambition. It's about creating the conditions for founders to think big and build bold, not play it safe or seek an early exit.
Chris Smith, Managing Partner at Playfair, agrees – “As VCs who have a broadly diversified portfolio and risk, we should remember that founders are putting a decent chunk of their life's work into a single project - de-risking it just a little bit makes total sense”.
We’re already seeing this shift play out in the US, where leading venture firms are proactively facilitating early founder liquidity as part of a broader strategy to retain and empower high-calibre teams. The benefits are clear: higher founder retention, bolder strategic thinking, and a greater likelihood of building category-defining companies. In the words of exited Metail founder Tom Adeyoola “taking money out of the business at each round is crucial as a founder. Unlike in the US, we don’t do it in the UK – I think that all founders should be doing it, not least to de-risk their lives”.
In the UK, the timing is right to follow suit. Our investor base is more sophisticated than ever. Traditional secondaries are no longer taboo. And critically, there’s a new generation of UK founders who see entrepreneurship not as a one-shot gamble but as a long-term career. Providing early liquidity to this group doesn't dilute commitment—it compounds it.
Done responsibly, Series A liquidity also serves the broader ecosystem. When founders realise some value early, they often reinvest—becoming angel investors, LPs, mentors, and second-time founders. This is how ecosystems grow exponentially rather than linearly.
Naturally, safeguards are needed. Liquidity must align with milestones and long-term incentives. It should be earned, not expected. But the blanket prohibition on early liquidity is outdated—and in some cases, counterproductive.
If we’re serious about turning the UK from a startup nation into a scale-up powerhouse, we need to evolve our models to match the maturity of our market. Giving founders the space to breathe at Series A could be one of the most catalytic steps we take.
Let’s shift the conversation. Let’s back our founders not just with capital, but with trust. And let’s build an ecosystem where explosive growth isn’t the exception — it’s the expectation.
Authored by Dan Perkins,
Commercial Director, Founder Liquidity Fund
The opinions expressed in this article are those of the author. For more information, visit Founder Liquidity Fund.
