When my startup CEO friend Michelle (who wished to remain anonymous) launched her SaaS platform in 2023, she immediately sought venture capital. It seemed like the obvious path: raise funds, grow fast, raise more. Two years later, she's building her second startup with a completely different approach: bootstrapping. "I'm not alone," she tells me. "A quarter of my network has shifted from chasing VCs to self-funding." She's right. According to Pilot's comprehensive 2025 Founder Salary Report, bootstrapping among startups has surged by 57% compared to last year, jumping from 11.5% to 18% of surveyed founders. This dramatic shift represents one of the most significant changes in startup funding strategy in recent years — and reflects deeper transformations in how founders are approaching business building in today's economic climate. 2025 Founder Salary Report 2025 Founder Salary Report The Great Funding Reset The most striking finding from Pilot's survey of 1,844 founders isn't just who's funding their companies — it's how those funding decisions impact their personal finances. The median founder salary has plummeted 43%, from $132,000 in 2024 to just $75,000 in 2025. This isn't simply a story about belt-tightening. It signals a fundamental rethinking of the relationship between personal compensation, company capitalization, and sustainable growth. The venture capital landscape that fueled previous startup generations has shifted dramatically. "What's particularly notable is the decline in smaller deal sizes," explains the report, noting that while last year's VC funding appears up 7% overall, that increase came almost entirely from mega-deals. For early-stage companies and smaller raises, the funding environment has become significantly more challenging. The Capital Efficiency Mandate The rise in bootstrapping coincides with another compelling trend: nearly a third (31%) of founders report that they determine their salary based primarily on "what the startup can afford." This capital efficiency mentality pervades today's startup ecosystem. Among bootstrapped founders, the self-imposed austerity is particularly pronounced. The data shows that 80% of bootstrapped founders pay themselves less than $100,000 — with many citing a preference to "fund operations" as their primary reason for keeping their compensation low. What's striking is the mindset shift this represents. Rather than raising venture capital to fuel rapid growth at all costs, today's founders increasingly view controlled spending and operational discipline as competitive advantages. The AI Factor: Build More With Less Perhaps surprisingly, this bootstrapping trend coincides with a massive increase in AI-focused startups, which nearly tripled from 14% to 40% of surveyed companies. This seeming contradiction actually makes perfect sense: AI technologies enable founders to accomplish more with smaller teams and less capital. While AI founders do pay themselves somewhat more than the overall average ($90,000 median versus $75,000), they're still operating with significantly greater capital efficiency than founders in previous years. The technological leverage provided by AI tools allows these companies to build sophisticated products with minimal headcount — the perfect scenario for bootstrapping. The Geography of Self-Funding Location continues to exert a powerful influence on startup economics. While the median salary for founders in the San Francisco Bay Area stands at $103,000, their counterparts in "Other US" regions make do with just $65,000. Interestingly, these regional salary differences often correlate with bootstrapping rates. Areas with lower costs of living frequently show higher percentages of self-funded ventures, creating regional ecosystems where bootstrapping becomes self-reinforcing. The 11-Employee Threshold Pilot's data reveals another fascinating pattern: founder salaries increase with team size but plateau after reaching 11-25 employees. This "magic number" appears to represent a tipping point where companies achieve sufficient operational scale to support more sustainable founder compensation. For bootstrapped companies, this milestone takes on even greater significance. Reaching this threshold often marks the transition from survival mode to sustainable growth — all without diluting ownership through external investment. Why Bootstrapping Now? Several factors drive this bootstrapping shift: Changing Investor Expectations: VCs increasingly demand clearer paths to profitability before investing, making bootstrapping a necessary first step even for companies that eventually plan to raise.
Accessible Technology: Cloud infrastructure, open-source tools, and AI capabilities dramatically reduce startup costs, making self-funding viable for businesses that would have required significant capital just years ago.
Changing Founder Demographics: The report shows younger founders (20-29) actually command higher salaries than their older counterparts, suggesting a generational shift in how entrepreneurs view the traditional sacrifice narrative. Changing Investor Expectations: VCs increasingly demand clearer paths to profitability before investing, making bootstrapping a necessary first step even for companies that eventually plan to raise. Accessible Technology: Cloud infrastructure, open-source tools, and AI capabilities dramatically reduce startup costs, making self-funding viable for businesses that would have required significant capital just years ago. Changing Founder Demographics: The report shows younger founders (20-29) actually command higher salaries than their older counterparts, suggesting a generational shift in how entrepreneurs view the traditional sacrifice narrative. The Bootstrapping Playbook for 2025 For founders considering the bootstrapped path, Pilot's data suggests several strategic approaches: Embrace Capital Constraints: Rather than viewing limited funding as a weakness, successful bootstrappers treat it as a forcing function for creativity and focus. The most effective bootstrapped founders ruthlessly prioritize efforts that drive revenue, not just growth.
Plan for the 11-Employee Milestone: Structure your business model and pricing to support reaching the 11-employee threshold, where founder compensation typically stabilizes. This often means charging premium prices and focusing on high-margin services or products.
Consider Geographic Advantages: While the report shows highest salaries in tech hubs like San Francisco and Boston, it also reveals that bootstrapped founders in lower-cost regions can achieve profitability faster while maintaining better personal economics. Embrace Capital Constraints: Rather than viewing limited funding as a weakness, successful bootstrappers treat it as a forcing function for creativity and focus. The most effective bootstrapped founders ruthlessly prioritize efforts that drive revenue, not just growth. Plan for the 11-Employee Milestone: Structure your business model and pricing to support reaching the 11-employee threshold, where founder compensation typically stabilizes. This often means charging premium prices and focusing on high-margin services or products. Consider Geographic Advantages: While the report shows highest salaries in tech hubs like San Francisco and Boston, it also reveals that bootstrapped founders in lower-cost regions can achieve profitability faster while maintaining better personal economics. A New Era of Founder Economics The 57% surge in bootstrapping signals a fundamental recalibration of how founders approach building companies, balancing personal sustainability with business growth. For today's founders, the bootstrapping path offers something increasingly valuable: optionality. By building businesses that can thrive without external capital, entrepreneurs gain negotiating leverage with potential investors while preserving the freedom to chart their own course. As one bootstrapped founder put it: "My first company was valued at $20 million, but I couldn't afford a house. This time, I'm building a business that pays me first."

This story contains new, firsthand information uncovered by the writer.

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Bootstrapping Surge: Why 57% More Founders Are Self-Funding in 2025

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