What is ‘seedstrapping’? A new route for startup founders in 2025

In the ever-evolving world of startup funding, the language keeps changing, so do the rules. Enter seedstrapping: a new term for a strategy that’s been quietly gaining traction as the traditional VC path becomes harder to access. Seedstrapping refers to a hybrid funding approach where founders raise a modest seed round and then aim to become profitable without further institutional backing.

For UK-based founders, often caught between dwindling VC appetite and limited bootstrapping options, seedstrapping offers a compelling middle ground.

Bootstrapping, VC, and Now — Seedstrapping

To understand seedstrapping, it helps to compare it to its more familiar cousins:

Bootstrapping is the purist path — fund your business with your own money or early revenue. It's slow, often lonely, and gives you complete control
The traditional route is the opposite — raise successive, usually starting with SEIS/EIS and angel investors before progressing to VCs for series A and beyond, burn fast, and grow even faster. It works for some, but requires playing by VC rules, with heavy dilution and a focus on exit multiples
Seedstrapping sits in between. You raise a small amount (often pre-seed or seed), use it to get to market and early revenue, then build a profitable or cash-efficient business that doesn’t require further funding — but could take it if the terms are right

It’s about optionality, not obligation.

Why Seedstrapping Is Gaining Ground

Over the past 18 months, founders have been navigating a new climate. VC activity, particularly at the seed stage, has slowed significantly. Deal sizes are down, timelines are longer, and competition is fierce. According to HMRC, 6,070 startups raised £1.817 billion through SEIS and EIS in 2023 – 24 — a decline in both volume and value from the prior year.

But it’s Series A where the bottleneck is sharpest. Peter Walker, Head of Insights at Carta reports that only 15.5% of startups that raised in early 2023 had secured a Series A after two years. This sits in stark contrast to startups who raised in the same quarter in 2020, with 34.9% of them raising Series A after the same timeframe.

Investors now expect clear metrics and capital-efficient growth from the outset, particularly in sectors like AI where efficiency has soared and barriers to entry have reduced.

Seedstrapping appeals for several reasons:

AI-native tools: The rise of no-code, low-code, and plug-and-play SaaS stacks has dramatically lowered the capital required to launch and scale
Founder control: Retain equity, skip the board reshuffles, and keep decision-making close to the product
Valuation discipline: Founders avoid inflated rounds that create future down-round risks
Investor fragmentation: With VC attention concentrated on fewer deals, founders must find sustainable paths independently

The Benefits of Seedstrapping

Done right, seedstrapping offers powerful upsides:

Control: With smaller rounds, you avoid over-dilution and retain board-level power
Focus: Less time on fundraising means more time with customers and product
Leverage: Profitability or break-even puts you in a stronger position for any future funding
Survivability: Capital-efficient startups are more resilient in downturns or investor dry spells

Investors also see benefits: reduced dilution, alignment on sustainable growth, and better downside protection. In volatile markets, those traits matter.

The Trade-Offs You Need to Know

It’s not without challenges. Seedstrapping demands tight discipline:

Short runway: Your raise may only buy 6–12 months. Monetisation is non-negotiable
Constrained resources: Hiring, R&D, and GTM need to be ruthlessly prioritised
Liquidity delays: SAFEs or convertible notes may not convert for years — an issue for investor returns
Capped upside? Without growth capital, you may hit ceilings earlier unless reinvestment is managed well

As GoHub Ventures notes, some investors are shifting their focus down the funnel, into Pre-Seed, to preserve optionality — making even early-stage rounds more competitive.

Is It Right for You?

Seedstrapping won’t suit everyone. It works best for:

Experienced founders with networks or prior startup knowledge
Startups that can monetise early, especially in SaaS, fintech, or digital services
Low capital intensity models — where speed to revenue trumps long R&D

It’s likely a poor fit for:

Deeptech or medtech startups with long timelines or high regulatory costs
Hardware-heavy ventures, where infrastructure costs are high
Aggressive land-grab models, where blitzscaling is the only path

But if your model allows for early traction, and you value control, seedstrapping might be your most strategic move. Seedstrapping isn’t just a reaction to tough funding markets. It’s a mindset shift—towards building real businesses that work, not just pitch decks that raise.

As the funding ecosystem evolves, this approach gives founders something rare: leverage. You control your timeline, your narrative, and your destiny. And if you do choose to raise again? You do so from a position of strength.

In a funding market full of noise, seedstrapping is about clarity. Build something that works, and the money will follow.

References