Default to Build, Not to Raise

VC Is One Path. It’s Not The Path.

Most founders I meet assume that raising venture capital is part of the job. That it’s what “real” startups do. That if you’re not pitching, you’re behind.

But here’s the truth: venture capital is the exception, not the rule.

In 2022, Americans filed 5.1 million new business applications — a strong indicator that they want to start a company. If we toss out the solopreneurs and the side hustlers, we are left with about 1.7 million that were likely to become real employers. These are founders starting something serious...businesses with hopes of growth.

Now guess how many U.S. startups raise venture capital in a given year?

Roughly 4,400 That’s not 4,400 per state. That’s total. In the entire United States. Over an entire year.

And just 3,600 of those companies were “seed” stage startups. That is, new companies at the earliest moments in their funding life.

So fewer than 0.3% of new companies with designs on growth raised venture capital.

99.7% didn’t

Not because they weren’t good enough. Because VC was never designed for most startups in the first place.

So where do most founders get their funding?

• 65% rely on personal or family savings
• 17% use bank loans

But here’s the problem: Most Americans have less than $5,000 in savings. And only 18% of potential entrepreneurs qualify for a business loan. That leaves most would-be founders left with two options: Figure out how to bootstrap it with what little you can scrape together or walk away

This is one of the single biggest reasons most ideas die before they ever get a chance.

And, of those that do start, the misperception that VC is how businesses get funded that so permeates our startup ecosystems, leads founders to spend their precious time pitching and trying to raise capital to get their ideas started rather than, well, actually getting started.

So what’s actually true?

• Most successful companies never raise venture capital
• Most of the Inc. 500 — the fastest-growing private companies in America — didn’t take VC
• Plenty of $10M, $50M, even $100M+ companies grow on revenue, not rounds

Venture capital is just a very specific tool — one that is useful for a very specific type of business:

• The kind that needs to spend fast,
• Chase scale over profit,
• And aim for billion-dollar outcomes.

If that’s not the kind of business you’re building, that’s not a failure. That’s just a signal to pick a different strategy — and a different source of capital.

Instead of asking:

“How do I raise money?”

Try asking:

“What’s the fastest, lowest-risk way to prove this works?”

That might be:

• A scrappy prototype
• A customer pre-order
• A micro-grant or pitch prize
• A part-time pilot while you hold down a job

VC might come later. It might not come at all. And either way, you’re still building a real company.

So What Should You Do Instead?

If you're building something real and want to grow — but you're not on a VC path (or don’t want to be) — here are a few ways to move forward:

1. Redefine What Traction Looks Like

Don’t wait for capital to “get started.” Investors want proof. So do customers. So:

• Sell before you build — offer pre-orders, pilots, or paid trials
• Run a no-code test or a concierge-style service
• Use landing pages, interviews, or early user data to learn fast

Traction doesn’t have to mean revenue — it means evidence.

2. Get Creative About Capital

Instead of pitching investors, think smaller, faster, and closer to home:

• Look for micro-funding. For example, at Builders + Backers we provide pre-formation Pebble Funds to fuel entrepreneurs’ ability to rapidly assumption test their ideas
• Consider revenue-based financing, not equity
• Partner with someone who brings capital or resources instead of cash
• Explore platforms like Pipe, Wefunder, Honeycomb or local CDFIs

Ask: What’s the smallest amount of capital I need to validate the next assumption?

3. Build for Resilience, Not Optics

You don’t need a big team or fancy deck to prove demand.

• Use automation, freelancers, no-code tools, or AI
• Stay lean — focus on real customer value, not press releases or launches
• Optimize for cash flow and control, not just speed

VC often leads companies to grow before they're ready. You don’t have to.

4. Surround Yourself with Builders, Not Just Pitchers

Find people who’ve grown real businesses — not just raised money. Learn from:

• Bootstrappers
• Founders with exits outside of tech
• Operators who’ve done a lot with a little

You're not alone. You're not under-resourced. You’re just not being shown the full playbook.

The Bottom Line

The truth is: most founders are funding their companies without VC — and succeeding. If that’s the path you’re on, you’re not behind. You’re not doing it wrong. You’re not missing out.

You’re building the way most companies actually grow. You’re doing what most successful founders actually do.

The startup world just forgot to tell you.