PRIMER
JAN. 2025

Why some startup founders may choose to bootstrap in 2025.

BY OPENING ROUND

Startup founders across a number of industries are facing a very different fundraising landscape in 2025. According to Modern Retail, a shift in mindset is in process for many DTC founders when it comes to tapping into the venture capital market. The evolution in the capitalization strategies for founders is in concert with a meaningful dip in funding received by radicalized and gender-diverse founders.

Carta recently shared their annual equity report on the state of equity and diversity within the venture ecosystem. The report aggregated and anonymized data from tens of thousands of startups in order to examine how opportunities found companies, raise venture funding, and work at startups are distibuted according to race and gender.

Here are some key data points form the report:

Young Founders are more diverse.

Highest share of women founders is in education and health tech.

Equity is not equally distributed.

Women co-founders tend to get less equity than men.

Men are funded more than 3x as much as women founders at pre-seed.

And women are funded even less at later stages.

Funding for black founders continues to backslide.

According to a 2023 report by McKinsey, minority founders are overlooked at the cost of the broader economy.

In parity scenario, Black-and Latin-owned businesses would generate an additional $1.6 trillion and $2.3 trillion respectively, assuming Black- and Latin-owned business ownership matched their share of population and their business revenues matched those of their peers.

Note: Funding for Latin American founders rose by 1% in 2024 compared to the previous year.

Modern Retail suggests that early-stage leverage existing resources their penetrate a market.

“Aside from injecting their own cash, some founders are using their existing marketable skills to operate a new brand from the ground up”.