How Smart UK Startups Approach Alternative Investments

The Investment Context

Inflation may have cooled off since the post-pandemic highs, but its effects still linger, probably eating into your capital. Official figures show CPI at 3.8% as of August 2025, the lowest since mid-2021 but still well above the Bank’s 2% target.

If you have a pile of capital sitting in a bank account, you might be at a disadvantage because the purchasing power of your money is slowly but surely slipping away, thanks to the effect of inflation.

Also, keeping too much in cash means you’re missing out on opportunities. When your capital is parked, it’s not working. Sure, it might be gaining a few pence in a savings account, but that’s nothing compared to what it could be doing. And in today’s fast-moving startup environment, every pound not compounding somewhere is a pound losing ground.

The Case for Public Equities

Many founders and startup operators naturally turn to public equities as the next best option; on the surface, it makes a lot of sense. Stocks and other public equities are more dynamic and often move with broader economic trends, which can generate huge returns.

However, they come with their own trade-offs. Public equities are still exposed to the same volatility, interest-rate swings, and macro pressures that businesses face globally, especially in the UK. In other words, they don’t always provide the stability your portfolio needs when markets turn unpredictable.

Diversification with Alternative Assets

Some startup founders still shy away from this form of diversification, mostly because of the perceived complexity and risk that come with stepping outside traditional investments. But if you approach it with the right mindset, which is that the goal is to manage risk and build a more resilient portfolio when markets shift, it starts to make perfect sense.

Many financially savvy startups already understand this. They allocate a portion of their portfolio to a broader mix of assets, which helps them protect against inflationary spikes and move quickly on new opportunities without scrambling for liquidity.

Crypto as an Accessible Starting Point

Like it or not, crypto investments have become one of the most accessible entry points into alternative assets, globally and right here in the UK. Platforms like Coinpass now allow UK businesses to securely hold and manage digital assets within regulated frameworks, removing much of the uncertainty that once surrounded this space.

Other Alternative Avenues Worth Considering

While crypto often gets the spotlight, it’s far from the only option. Startups looking to build long-term resilience are also turning to:

• Private credit and venture funds. This option offers exposure to high-growth ventures or debt instruments that can deliver strong yields.
• Real assets such as real estate or infrastructure. If your startup has a large enough treasury, this is a great option since it offers stability and inflation protection over time.
• Commodities such as gold. This option acts as a hedge against currency fluctuations and economic uncertainty.

Each of these alternatives serves a different role, some protect purchasing power, others generate uncorrelated returns, but together, they help build a stronger, more adaptive treasury.

Alternative Assets Fit the Startup Mindset

Crypto particularly offers a few advantages that align naturally with how startups think and operate:

• Inflation hedge: Assets like Bitcoin, with a fixed supply, protect against currency debasement.
• Liquidity and accessibility: Unlike traditional alternatives that can lock up capital for years, crypto markets let you move in or out in seconds.
• Innovation synergy: Holding crypto is a cultural statement for startups building in or around digital ecosystems. It aligns with your brand and the future you’re already shaping.

All of these points to the fact that alternative assets as startup investment options aren’t about speculation or betting your treasury on volatile assets. They serve as a strategic financial tool.