Startup Founders Are Super Pessimistic About Raising Money Right Now

Startup Fundraising is becoming harder

Startup founders are super pessimistic about raising new rounds of funding right now. That’s according to a new survey of startups in 2015 from First Round Capital.

“Some of these findings showed more of a lack of optimism, or more pessimism is a better way of saying it, than we’d been expecting,” said Josh Kopelman, a partner at First Round.

Around 69% of founders believe it will be harder to grab funding in the next few months at the seed-stage. Almost all (97%) said it will be harder in the coming months to raise Series A funding, and 99% said late-stage funding will be harder to achieve.

“When you only see one percent of late stage founders thinking it’s going to be easier, that’s a pretty extreme measure on the pessimism scale and that’s surprising,” Kopelman said. “More than seven out of 10 thought we were in a bubble.”

The survey doesn’t claim that startups are not raising cash, 68% admitted to completing a funding round in the last three months or less. The survey only states that actually achieving some level of funding is becoming harder.

The number one concern among startups? Hiring the right people. In fact, raising capital came in fifth on a startup founders list of worries.

Pessimism is likely the result of lenders telling startups to tighten their financials. Gone are the days of raising $10 million and spending $1 million of that round on free lunches and dinners for your staff.

Founders also note that a tightening market might mean it now takes four months instead of three to fundraise if the cash flow to startups does indeed slow down.

Read the full report on the State of Startups in 2015 here.

Written by Franklin Simmons

Franklin Simmons

Franklin Simmons is BusinessPundit's Tech Editor. His life is consumed with a love of augmented reality, mobility, and emerging technology. He extensively covers all areas of technology, including the computing, automotive, and healthcare sectors.