The Rise of Seed-Strapping Camels: Why Next Generation Startup Founders Will Neither Bootstrap Or Raise Multiple Rounds Of Funding

The future of innovation is global. We discuss it here.

For years, the startup world has been obsessed with achieving Unicorn status. These companies were typically high-growth fueled by millions, if not billions, of VC and Growth Equity to chase $1B+ valuations. But as many of these once-promising companies struggle to maintain sustainable growth and profitability they are now being dubbed Zombie Unicorns. With the reality kicking in globally, a new trend among founders is emerging: Seed-Strapping. This is when a startup will only raise a single round of funding. The one-round trend stands against the alternative of raising multiple funding rounds by default. It has been covered in The Information, The New York Times, NBC and CNBC.

Seed-strapping blends the scrappiness of bootstrapping with an initial investment of angel or venture capital. Founders following this path prioritize profitability, capital efficiency, and control from day one, avoiding the factory line of endless fundraising as covered in the Capital Light Conference with Sam Lessin. As the market evolves, we believe the next generation of startup founders will rise but past their path to success will look different from the majority of Unicorns from the last cycle.

The rise is enabled by several factors:

1. It is easier and cheaper to build a product. Less expensive technology expertise is required. A few million in investments goes a lot further to get a product in market, and generating revenue. This decreases the value of “technology” and increases the value of “execution”.

2. The critical element is GTM. What matters more today is finding product-market-fit and very quickly scaling fit. What channels will work and have enough depth to move quickly? This becomes the premium for success.

3. [Lower] but [better] outcomes. With less equity comes less dilution. Dilution of ownership, and also control. This is great for founders, but also good for early investors. Their downstream ownership will be closer to entry, reducing the required exit size (e.g. if a VC invests expecting 50% dilution across multiple rounds to reach a $1b valuation, achieving a $500m exit with no dilution is equivalent!)

4. Lower risk for all. We’ve all heard the stats that the vast majority of startups fail. But in seed strapping, getting to product and revenue helps validate a business model - or allows a founder to shut it down earlier. Getting to revenue lowers the risk for VCs too. Seed strapping could change the outcome curve.

5. Being close to the customers not the capital will matter. In the seed strapping world, local founders, who know their local market, and have local execution game, will likely win. One core reason is venture capital, once highly concentrated in a few cities like San Francisco, will stop being an issue. Amid a downturn in venture capital, this approach is gaining popularity among early-stage startup founders.

A New Type of Startup: Seed-Strapping Camels Who Raise One Round Of Funding

In many ways, seed-strapping is another variation of the Camel mentality, something we explored in Out-Innovate. These companies are building businesses that can endure and adapt in any market condition.

Founders are prioritizing fundamental business principles:

• Customer-driven growth – Building products that customers love and will pay for early on.

• Efficient capital allocation – Treating every dollar like it’s the last, reinvesting profits into expansion.

• Operational discipline – Maintaining control of cash burn and scaling at a sustainable pace.

But AI-driven automation means all this can be done much faster and cheaply. Founders no longer need to hire bloated teams or rely on large fundraising rounds to build valuable businesses. They can get to product-market-fit and even real revenue with de minimis teams.

As we head into this next platform shift, we are excited to reflect on a few founders that embraced this mentality in previous market cycles. We hope the success stories of these founder’s help inspire the next generation.

With that, let’s dive in. The following case studies showcase companies that embraced a seed-strapping approach, demonstrating that long-term sustainability often outperforms high-burn growth.

Meet Some Seed-Strapped Camels: Founders Who Adapted to Market Conditions In the U.S., Southeast Asia, Europe and Beyond

GoodRx – Mastering Capital Efficiency in Healthcare

Scott Marlette and his team launched GoodRx in 2011 with $1.5M in seed funding without ever needing to raise more. They hit $1M in revenue early by leveraging SEO and strategic reinvestment. As Marlette put it, “Raising capital would have changed our trajectory.” Instead of overfunding, they grew profitably, proving that capital efficiency and strong execution beat endless fundraising. Today, the company continues to execute and ended 2024 with $792M in revenue and an adjusted EBITDA of $260M.

Zapier – Scaling Smart, Not Fast

Rejected by YC at first, Zapier finally secured $1.2M in their seed round and treated it like the last money they’d ever raise. By running lean and focusing on sustainable revenue, they achieved 10% month-over-month growth while keeping their burn low. As Wade Foster phrased it, too much money creates perverse incentives. Their disciplined approach allowed them to outlast and outperform heavily funded competitors. While the Company is still private, they have continued scale. Today, more than 2.2 million companies worldwide already trust Zapier and integrate its offering across 7,000+ different apps and have logged over 25 million zaps on the platform.

Muck Rack – Treating Customers Like Investors

With just $200K in funding, Greg Galant built Muck Rack into a PR SaaS powerhouse by treating customers like investors. The company scaled profitably through organic growth and capital discipline, refusing to fall into the “growth-at-all-costs” trap. “We always had a chip on our shoulders because people called us a lifestyle business,” Galant recalled. They proved that capital-efficient startups can win big. While the Company is still private, they have continued to scale, and its global media monitoring now covers more than 600,000 news sources.

Backblaze – Innovating Under Constraints

Backblaze, a cloud storage and data backup company, bootstrapped for years, raising just $3M and then an additional $10M jut before its IPO. They were forced to innovate, which led them to design their own storage servers to cut costs. They couldn’t afford to lose money on every customer, so they built it themselves recalled by the founder Gleb Budman. Their lean, mission-driven culture helped them outlast competitors who burned through venture dollars. Today, the company remains public and ended 2024 with $127.6M in revenue (+25% YoY) and Adjusted EBITDA was $13.0 million compared to $(3.8) million in 2023.

Squarespace – The Solo Founder Who Built a Giant

Anthony Casalena launched Squarespace with $30K and ran it solo for seven years, growing revenue from $500 to $50K per month before ever raising external capital. By focusing on profitability, product-market fit, and operational efficiency, he built a business with lasting power. When he finally raised $38.5M, it was mostly secondary capital proving that you can scale without relying on VC lifelines. The Company went public on the NYSE in 2021 and was recently taken private in an all-cash deal by Permira in 2024 with a value of $7.2B.

Explore Five commonalities Of Seed-Strapped Startups

Reflecting on the above stories, five themes stand out:

1. Sustainable success takes time – None of these companies were overnight sensations; they played the long game.

2. Customer obsession drives profitability – They listened to customers, built products people loved, and monetized efficiently.

3. Growth was organic, not forced – Instead of pushing their product into the market, they were pulled by demand.

4. Every dollar was maximized – These founders raised capital strategically, treating funding rounds as milestones, not growth at all costs

5. Being a camel is a mindset, not just a strategy – It’s about disciplined execution, adaptability, and long-term thinking.

The Platform Shift: AI, Automation, and a Greenfield of Opportunity for Founders

Seed-strapping isn’t just a reaction to changing macro market conditions. This reflects a technology platform shift that’s creating an opportunity for founders.

Source: Coatue’s EMW 2024 Conference

Similar to how Cloud and Mobile led to generational technology companies, we think the platform shift within AI and the rise of foundational models will enable the next wave of seed strapped camels to emerge around the world with the white space being within the application layer.

Source: Generative AI’s Act o1(Sequoia)

This greenfield opportunity is shaping the next generation of great companies. Founders who embrace seed-strapping, capital efficiency, and strategic execution will have a lasting advantage in the coming decade.

Caveats & Conclusions: The Future Belongs to Seed-Strapping Camels

Seed-strapping clearly won’t be the right path for every startup. A one-size fits all model just doesn’t work. For example, certain capital-intensive industries like Hardware, Biotech, DeepTech, and next-gen infrastructure require upfront investment to get off the ground. These companies often need more than just a small seed round. They benefit from capital dedicated to these sectors, as well as alternative funding like grants, project financing, and structured debt. Venture capital can also be used at many stages - even in profitable companies - as accelerants. This is a Founder’s choice (and often a company I love investing in :-) ), but isn’t for everyone. However, the principles of capital efficiency and execution of camels still apply.

As we adapt to a new era of entrepreneurship, one thing is clear: for those for whom this model applies, treating every fundraise as if it’s the last is leading to smarter, more sustainable businesses.

The next wave of great founders will not measure success in dollars raised but in profits earned, control maintained, and lasting impact created.