Key Takeaways
- • Carta data show startups on its platform raised $119.5 billion in 2025, up 16.9% year over year, but across just 4,859 funding rounds, the lowest annual deal count in at least six years and 41% below the 2021 peak.
- • Bare Home founder Josh Pribyl grew the Minnesota bedding company to approximately $100 million in annual sales without outside equity, using a bank credit line secured against inventory while retaining control over product, pricing and customer experience.
- • Chefman and CHEF iQ founder Ralph Newhouse reports more than $400 million in 2025 revenue, expects to exceed $500 million in 2026 and projects $800 million by 2028, all built on a 'no outside equity, ever' approach.
- • Selly Automotive founder Zach Klempf raised $650,000 across two rounds, declined a San Francisco VC term sheet that required resetting equity vesting, and retained a majority stake when the company merged with AutoManager in June 2022.
- • Farrell Fritz partner Josh Kalish cautions against drawing sweeping conclusions from successful bootstrapped companies, noting that lean businesses that stall rarely attract the same attention.
Summary
Bootstrapping is prompting some U.S. founders to reassess the tradeoffs of venture capital, according to a Forbes report. The piece profiles several founders who financed growth mainly through revenue, bank borrowing or supplier terms rather than repeated equity sales, against a backdrop of a more concentrated fundraising market.
The funding backdrop is central to the discussion. According to Carta platform data cited by Forbes, startups raised $119.5 billion in 2025, up 16.9% from the prior year, but spread across 4,859 rounds, the fewest in at least six years and 41% below the 2021 peak. At seed stage, deal volume fell 28% year over year in the first quarter of 2025, even as median pre-money valuations rose roughly 18% to $16 million. Forbes notes these figures do not establish how many entrepreneurs are choosing to bootstrap.
Bare Home, a Minnesota bedding company founded by Josh Pribyl, illustrates the slower path. Pribyl spent four or five years refining the product before launch, and the company reached approximately $100 million in annual sales without outside equity. A bank credit line secured partly against inventory financed stock purchases, and Pribyl rejected investor offers that would have diluted ownership and ceded authority over product standards, pricing and customer experience. He told Forbes that "when the line is fully drawn and cash is tight, growth has to slow."
At Chefman and CHEF iQ, founder Ralph Newhouse has built a kitchen-appliance business with no outside equity, relying on fast inventory turns, reinvested profits, and improving supplier terms and credit lines. Newhouse reports more than $400 million in 2025 company revenue, with projections of more than $500 million in 2026 and $800 million by 2028. He acknowledged the risk, saying, "There's no safety net, and the margin for error is razor thin."
Zach Klempf's Selly Automotive shows a middle course, or 'seed-strapping'. Over nine years he raised $650,000 across a $350,000 convertible note and a $300,000 SAFE round, then funded growth through revenue and, when needed, personal credit. He declined a San Francisco VC term sheet that required resetting equity vesting. In June 2022 Selly merged with AutoManager, backed by The Beekman Group; at that time Selly served about 500 dealerships in the U.S. and Canada with seven-figure annual recurring revenue. Klempf retained a majority stake at exit and remains chief strategy officer and a board member at AutoManager Holdings.
Forbes also highlights FaxTerra, launched in March 2026 by Greg McCullough, which reports approximately $6,000 in monthly recurring revenue and $2,500 in monthly free cash flow with no employees or contractors. The company is at a much earlier stage than McCullough's former venture, TapResearch, which reached around $15 million in annual recurring revenue.
Forbes cautions that these cases do not show venture capital is unnecessary. Josh Kalish, a partner at Farrell Fritz, warned against sweeping conclusions from successful bootstrapped companies, noting that lean firms that stall rarely draw comparable attention. He added that founders need not treat bootstrapping and outside investment as opposing choices: "If outside money gets you something you couldn't get otherwise, raise it, but on terms you understand and are comfortable living with."
The funding backdrop is central to the discussion. According to Carta platform data cited by Forbes, startups raised $119.5 billion in 2025, up 16.9% from the prior year, but spread across 4,859 rounds, the fewest in at least six years and 41% below the 2021 peak. At seed stage, deal volume fell 28% year over year in the first quarter of 2025, even as median pre-money valuations rose roughly 18% to $16 million. Forbes notes these figures do not establish how many entrepreneurs are choosing to bootstrap.
Bare Home, a Minnesota bedding company founded by Josh Pribyl, illustrates the slower path. Pribyl spent four or five years refining the product before launch, and the company reached approximately $100 million in annual sales without outside equity. A bank credit line secured partly against inventory financed stock purchases, and Pribyl rejected investor offers that would have diluted ownership and ceded authority over product standards, pricing and customer experience. He told Forbes that "when the line is fully drawn and cash is tight, growth has to slow."
At Chefman and CHEF iQ, founder Ralph Newhouse has built a kitchen-appliance business with no outside equity, relying on fast inventory turns, reinvested profits, and improving supplier terms and credit lines. Newhouse reports more than $400 million in 2025 company revenue, with projections of more than $500 million in 2026 and $800 million by 2028. He acknowledged the risk, saying, "There's no safety net, and the margin for error is razor thin."
Zach Klempf's Selly Automotive shows a middle course, or 'seed-strapping'. Over nine years he raised $650,000 across a $350,000 convertible note and a $300,000 SAFE round, then funded growth through revenue and, when needed, personal credit. He declined a San Francisco VC term sheet that required resetting equity vesting. In June 2022 Selly merged with AutoManager, backed by The Beekman Group; at that time Selly served about 500 dealerships in the U.S. and Canada with seven-figure annual recurring revenue. Klempf retained a majority stake at exit and remains chief strategy officer and a board member at AutoManager Holdings.
Forbes also highlights FaxTerra, launched in March 2026 by Greg McCullough, which reports approximately $6,000 in monthly recurring revenue and $2,500 in monthly free cash flow with no employees or contractors. The company is at a much earlier stage than McCullough's former venture, TapResearch, which reached around $15 million in annual recurring revenue.
Forbes cautions that these cases do not show venture capital is unnecessary. Josh Kalish, a partner at Farrell Fritz, warned against sweeping conclusions from successful bootstrapped companies, noting that lean firms that stall rarely draw comparable attention. He added that founders need not treat bootstrapping and outside investment as opposing choices: "If outside money gets you something you couldn't get otherwise, raise it, but on terms you understand and are comfortable living with."
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