This report explores the role that Innovate UK (IUK) funding has had in the development and growth of UK new ventures, especially AI startups. It covers three stages of the funding lifecycle: selection into application, reapplication after rejection, and the effects of funding. The analysis pairs data on funded and unfunded IUK applications with a database of UK AI startups, company funding information and measures of engagement with science; the first part is descriptive, while the second and third rely on a regression discontinuity design. Entry into the funding system is highly selective: among AI startups, application is associated with location in particular regions, prior venture funding, university spinout status and prior engagement with IUK communication channels. Companies that narrowly miss funding do not leave the system and are more likely to reapply quickly, although there is a potential discouragement effect on startups over longer horizons. IUK funding plays a causal role in attracting further venture funding: using conservative estimates, £1 of IUK funding is associated with approximately £1.68 in additional venture funding. Effects on scientific publications, collaboration, R&D hiring, open-source activity and survival are more ambiguous.