What You’ll Find This Week

Last week’s edition broke down just how brutal VC funding has been throughout 2025 (unless you’re one of the AI mega-co’s). This week, we’re outlining key steps that founders can take to ensure their innovation future. Read on for a breakdown of how to approach funding into 2026 and where to focus your efforts to ensure your own survival.

Here’s what you’ll find:

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This Week’s Article

2025 is among the most brutal eras to raise VC dollars. If you want the metrics, read Part 1.

The floor has dropped. Founders who could raise a $3M seed with an MVP and a deck in 2021 are now struggling to get second meetings. Valuations have compressed, round timelines have stretched, and investor expectations have ballooned. What used to count as early traction now gets dismissed outright.

This is the hangover from the 2019 to 2021 period when zero interest rate policies and COVID era liquidity pushed record levels of capital into venture. CB Insights reports that global venture funding peaked at $621 billion in 2021. Seed rounds ballooned in size and valuation, and capital flooded into startup accounts based on slick decks and unvalidated ideas. Too much money chased too many stories.

The correction is here. Capital is tighter and terms are tougher. Teams are raising to survive, and they are giving up more equity to do it.

Today’s market rewards operators and exposes founders who know how to raise but not how to run. This is not the kind of market you pitch your way out of. It is the kind you build through. Assuming, of course, that you have the runway or revenue to make it through.

As a founder, you need more than optimism. You need a plan heading into 2026. Here is our best advice.

Customers give you leverage. They also keep you honest.

Mark Cuban put it plainly…

As a founder, you know the difference between investor interest and customer traction. The real choice is sequence: Get customers first. Prove that people are willing to pay for the thing you are building. Use that proof to raise on better terms later.

Do you have to be post revenue? No. But you will be in a higher leverage position if you are.

If you’re not post revenue, you’re not dead in the water. You do need clear evidence that people want what you are building. Use this proof ladder:

In a tight market, stories do not carry you. Proof does. Revenue, retention, and real willingness to pay are the signals that matter.

Founders used to raise 12 to 18 months of runway and then plan to start building toward their next raise at the 9 month mark. That doesn't work anymore.

The gap between rounds is getting longer. According to Carta, the median time between Series A and B is now 2.8 years. If you’re starting from a seed round, the timeline is murkier. Many founders are raising bridge rounds or flat extensions instead of moving up the fundraising stack. Some companies are sitting at the seed stage for four years or more.

This means three things:

Runway is about control. When you are forced to raise, you accept worse terms. If you have 12 or more months of cash and optionality, you have negotiating power. That's true even if you’re not default alive.

Runway control checklist:

If you must choose between hiring another growth marketer and extending your survival horizon, choose survival every single time.

Bootstrapping isn't a fallback. It’s a measure of survival potential. And it's one of the few things that still signals founder quality in a noisy, capital constrained market.

Think about it this way…

While maintaining a large equity hold in your own company is important, the importance of bootstrapping goes beyond ownership. It gives you leverage (notice that word cropping up here often?). The further you go on your own, the less you have to accept capital on someone else’s terms. In 2025, those terms are getting worse. We’re seeing:

Bootstrapping doesn’t mean doing everything yourself. It means doing enough with what you have that you earn the right to choose your next move.

Bootstrapping isn’t the only route. Today, “Seedstrapping” is becoming another popular path for early stage companies. The idea behind seedstrapping is that you raise a seed round, and then treat your company as though it were bootstrapped with the intent of kicking the venture funding “can” down the road indefinitely.

A perfect example is Calendaly. In their early days, before it became our de facto tool for “here, find time on my calendar and book it yourself,” founder Tope Awotona raised an initial round of $550k (including ~$200k of his own savings). He used revenue to extend his runway and build a cashflow positive business.

For seven years.

When Awotona finally decided to raise further funding from VCs in 2021, he did so with the backing of 10 million monthly users and $70 million in ARR. He was able to leverage his strong business to raise a $350 million round at a $3 billion (yes, with a “B”) valuation.

Everyone wants the top tier VC logo on their cap table. The money that saves your company might not come from a marquee firm. It might come from a regional fund, a strategic angel, or a debt line that gives you six more months to prove your case.

This isn't the year to optimize for prestige. It's the year to optimize for progress.

If you’re not looking at:

…then you’re leaving options on the table. Yes, they come with strings. But so do SAFEs and priced rounds. At least these options keep you moving forward.

In 2021, you could raise a seed round off a viral tweet and a decent deck. In 2025, you are getting diligence calls on customer retention curves and gross margin math.

Founders who survive this cycle are not louder.
They are tighter. Sharper. Less reactive. More focused.

This isn’t a downturn. It is a shakeout.

If you are still building, you are already ahead of the founders who tapped out.
If you are still learning, you are already ahead of the ones who stopped listening.
If you are still standing, you are already doing better than you think.

Stay focused. Stay honest. Stay alive. That is the win.

If you can grow while doing it, that is how generational companies are built.

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