US founders spend up to half their week fundraising for capital

A new survey indicates US startup founders are spending a significant portion of their working week pursuing external investment, with nearly half saying this diversion is undermining their ability to run their businesses.

Heavy fundraising workload

Data collected from 610 US startup founders suggests fundraising is consuming the equivalent of a second full-time job for many. According to the survey, 46% of respondents dedicate 30% or more of their week to fundraising activities. One in four founders is reported to spend more than half their week solely focused on raising capital.

Nearly half (45%) of the founders surveyed said that the time spent on fundraising is affecting their ability to manage their companies efficiently.

Due diligence concerns

Despite substantial time spent on securing investment, fewer than a third of founders (30%) said they are conducting comprehensive due diligence on potential investors. This includes checks such as reference assessment and industry alignment. Meanwhile, 43% disclosed they are either not conducting due diligence or only performing a cursory review.

Founder demographics

The findings show a departure from the traditional image of young founders operating from home. Among respondents, 65% are over 45, and 38% are over 55. Half are maintaining part-time or full-time employment in addition to developing their business ventures. A large majority (91%) reported using personal savings to support their startups.

The survey highlights a persistent gender gap in fundraising, with 70% of those seeking capital identifying as male and 29% as female.

Future outlook

US founders remain generally positive about future prospects. A combined 64% described themselves as very or quite optimistic. However, 84% cited cash flow as the most significant risk facing their business, followed by inflation (37%) and rising interest rates (34%).

Visa policy responses

Recent changes to the US H-1B visa policy, specifically the introduction of a USD $100,000 fee for new international applicants, are prompting adjustments to hiring strategies. Thirty-four percent said they were taking action in response. Measures included shifting to remote foreign contractors, prioritising domestic recruitment, and exploring alternative visa pathways.

Personal sacrifices

Startup founders noted significant personal consequences resulting from business demands. Lack of sleep was cited by 23% as the most notable non-financial sacrifice. Nineteen percent referenced mental health, with a further 17% indicating family life was most affected.

"Angel investment can be a crucial source of funding as startups scale, but fundraising is eating into a huge amount of US Startups' time," said Mike Lebus, Founder, Angel Investment Network.

"The idea that all successful startups are launched by 22-year-olds with immediate angel investment is a fantasy, often ignoring the hard-earned experience and financial stability required to take a calculated risk," said Lebus.