Sid Orlando for Mercury

Founders are rethinking startup funding, and VC isn’t the default

Venture capital may still dominate Silicon Valley headlines, but most early-stage founders aren’t relying on it to fund their businesses. A May 2025 Mercury survey of 1,500 U.S. entrepreneurs running companies less than six years old found that VC investment ranked only fifth among top funding sources, behind self-funding , business loans, revenue-based financing , and support from friends and family. In fact, Mercury reports that more than half of early-stage tech companies surveyed reported they hadn’t raised any VC funding since their inception.

The AI capital chasm

Context matters: In the first half of 2025, investors poured $145 billion into U.S. and Canadian startups from seed thr

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