Unpacking the money-distance nexus: mapping the spatial configuration of exogenous entrepreneurial finance across UK entrepreneurial ecosystems

Ross Brown (), Augusto Rocha (), Haoran Sun () and Marc Cowling ()
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Ross Brown: University of St Andrews
Augusto Rocha: University of Edinburgh
Haoran Sun: University of St Andrews
Marc Cowling: Oxford Brookes University

Small Business Economics, 2025, vol. 65, issue 3, No 12, 1515 pages

Abstract: Abstract Attention is now increasingly being drawn to the interconnectedness of different entrepreneurial ecosystems (EEs). Consequently, from a theoretical viewpoint EEs are increasingly being viewed from a multi-scaler rather than a mono-scaler perspective. This paper examines the spatial financial interlinkages between places and different forms and stages of entrepreneurial finance. Using a unique real-time data source of equity investments from Crunchbase, we investigate the composition of entrepreneurial finance across 30 different UK spatial locations. The core focus of the work is to uncover the composition of equity deals in terms of non-indigenous international investors and how space plays a role in influencing the prevalence of these extra-local investment deals. A novel dimension of the study is to test the “distance effects” encountered by locations in terms of their spatial proximity to the UK’s major international hub for entrepreneurial finance: London. We found that the probability of attracting international investors varies significantly across different funding stages with late-stage ventures showing a much higher propensity to attract international investors. By unpacking the “money-distance nexus” a core finding is that proximity to London is crucial for receiving external funding from international investors. Policy implications for less advantageous EEs focus on strategies for leveraging extra-local investment.

Keywords: Entrepreneurial ecosystems; Entrepreneurial finance; Distance; Public policy (search for similar items in EconPapers)
JEL-codes: G20 L26 R10 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s11187-025-01030-5

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