63% of founders cite fundraising as a top-3 challenge, followed by customer acquisition at 50%. The gap between capital needs and available funding remains the defining friction point.
While founders rank fundraising first (35%), investors point to revenue growth (24%) as the biggest current challenge. Misaligned priorities may widen the funding gap.
Nearly half of founders struggle to acquire customers. Converting prospects remains especially difficult, with 36% disagreeing they can do so effectively.
Nearly two-thirds of investors name AI and machine learning as the biggest future trend, dwarfing climate change (11%) and all other categories combined.
Investors rate regulatory severity higher than founders across every category, with market access and compliance costs scoring above 3.2 on a 5-point scale.
Founders consistently identified fundraising (63%) as their biggest challenge, followed by customer acquisition (50%), scaling and growth (38%), and revenue growth (37%). When asked about their second and third biggest challenges, responses followed the same trend. People and culture-related issues were less of a focus — peer-to-peer support (2%), talent retention (3%), competition (5%), co-founder relations (5%), and personal motivation (5%) were the least commonly noted.
The results were relatively consistent across industries, suggesting that the challenges founders face are largely industry-agnostic. Customer acquisition took priority over fundraising in Cybersecurity, Education, Enterprise Software, and Travel & Leisure. Scaling and growth were the main challenges in Marketing tech, and revenue growth was the most common concern in Proptech.
Fundraising remained the primary obstacle for startups with up to 20 employees. For companies with more than 20 employees, revenue growth took the lead. Customer acquisition was the second most pressing challenge for companies with fewer than 10 employees; after that, scaling and growth became more prominent. The balance between growth and profitability is a key challenge for companies with 20 to 100 employees.
Founders identified fundraising as their biggest challenge, and investors agreed when asked about the challenges their portfolio companies are facing. But in contrast to founders, investors gave more weight to revenue growth — they saw fundraising and revenue growth as almost equally pressing, whereas founders were significantly more likely to highlight fundraising, with customer acquisition and revenue growth following behind.
Investors cited revenue growth as the main challenge that discourages them from investing. Growth-stage investors put more weight on it in comparison to early-stage investors, who were more likely to be discouraged due to challenges with customer acquisition. This correlates with what founders themselves identified: smaller companies struggled with customer acquisition in addition to fundraising, while larger companies struggled primarily with revenue growth and scaling.
Fundraising and revenue growth go hand in hand: in order to raise funding, you need to nail revenue growth. Where founders are focused on fundraising, revenue growth is the most common reason for investors not to invest — a dynamic that complicates an already challenging process. Prolonged fundraising may come at the expense of revenue growth, yet it is exactly revenue growth that investors want to see before making an investment decision.
While founders find it easy to identify new customers, converting prospects into paying customers remains challenging: 36% of respondents find it difficult to convert prospects into customers. User retention and user activation did not seem to pose significant challenges — only 12% found it difficult to retain customers and 21% found user activation challenging.
Finding a universal and therefore scalable solution to the problem is a constant struggle. As one founder put it, getting people to try new things is always difficult. The data below shows the full Likert distribution across four customer acquisition dimensions.
Investors are optimistic that AI will be a disruptive force, much like the internet in the 1980s. Over 60% of investors saw artificial intelligence and machine learning as the biggest trend shaping the ecosystem. Many seem confident that AI is the catalyst of a new paradigm shift.
However, some founders worry that the fixation on AI distracts attention away from the core value of their product. The interest in AI makes fundraising increasingly difficult for companies building outside the AI space. When we asked founders what they would need to succeed, one expressed the need for “more early-stage investors who aren't just caught up in AI hype.”
Investors viewed the impact of regulation to be more significant than founders across every regulatory category — but especially around financial regulations and intellectual property. The gap suggests that founders may not be fully considering the long-term impact of regulatory hurdles, which investors view as critical to future growth.
While founders are focused on building products and gaining traction, investors are more concerned about compliance risks — data protection, competition, and rising compliance costs — that can potentially slow or disrupt growth. If these regulatory challenges aren't addressed early, startups risk facing delays, penalties, or unexpected costs, especially as they scale or enter new markets.
For founders, regulatory concerns differ by sector, business model, and region. Medtech & Pharma face the toughest regulatory hurdles, followed by Social Media & Messaging, Fintech, Energy, and Biotech. C2C startups face tougher regulation than B2B and B2C startups, especially in market access, competition, taxation, and financial rules. EU-based startups systematically put more weight on regulatory challenges across every category — in particular data protection, privacy regulations (such as GDPR), and labor laws.
Respondents rated regulatory severity on a 1–5 scale (1 = not severe, 5 = very severe). Charts show mean scores, not percentages.
Many founders are ready to give up the new normal and return to the office. Some state that the only thing they would need is “being able to put all the team together in a room.” The concern is that remote work has made teams less productive and less collaborative, causing general demotivation. One founder said that “the rise of remote work is destroying company bonds.” Time zones are difficult to manage, and founders are increasingly worried about remote workers holding multiple jobs at the same time.
While most founders remain relatively confident in the ability of their co-founders to realize the full potential of their venture, 19% would choose a different co-founder if given the chance. Founders are most confident in their own ability (80%), more confident in their team's ability (71%) than in their co-founders' (66%). This reflects the complexity of finding the right partner — misalignments in vision, work ethic, or skill set can create friction that is difficult to foresee early on but critical to long-term success.
Despite all the challenges, founding a company is a passion project and founders would not choose differently. Over 90% of founders feel excited about their ventures. Despite struggles with work-life balance — reported by 35% — only 7% would choose a different path. Overworking, financial strain, and constant fundraising pressure are common struggles, but the drive to build something meaningful outweighs the challenges. 92% felt their work is meaningful, 80% said they would not choose differently, and for 85% motivation to build has either increased or remained the same over the past 12 months.
AI will change everything.
The fundraising process takes too long, at the sacrifice of revenue growth.
The rise of remote work is destroying company bonds.
More early-stage investors who aren't just caught up in AI hype.
AI is the number one investment field right now, and if you don't do AI, it's hard to raise capital even though you might have good traction.
We cannot seem to find a repeatable way to acquire customers.
Getting people to try new things is always difficult.
The fundraising environment is a bit tough for the moment, and the 2021 times are over. Now companies are required to focus more on profitability than growth.
The ongoing negative sentiment about fundraising is creating a self-fulfilling prophecy where startups don't raise enough to grow, in turn hindering fundraising.
Being able to put all the team together in a room.
Remote culture is hard, across multiple time zones, for a small team.
Everybody wants to work remotely and keep multiple jobs at the expense of productivity.
Select a survey question to view response categories, percentages, and distribution bars.
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