The headline numbers suggest the startup market is recovering. It isn’t. What looks like recovery is actually concentration—fewer companies absorbing more capital.
Total capital raised in 2025 is estimated at $110 billion, up 6% from 2024. Sounds like recovery. But look at the deal count:
Capital is rising while deal count is collapsing. Fewer companies are getting funded, but those that do get funded are raising larger rounds. The denominator is shrinking faster than the numerator is growing.
For context: The 2021 peak was $220 billion—a ZIRP-fueled anomaly that distorts all comparisons. The market hasn’t “recovered to 2021 levels.” It has structurally reset to roughly half that size and is now concentrating further.
False Optimism Is Dangerous
The “recovery narrative” creates false optimism. Founders planning fundraises based on improving conditions may find the door has actually narrowed.
The companies getting funded aren’t a sign of market health—they’re the survivors of an increasingly selective filter. As mental modelsthinking would suggest: don’t mistake aggregate capital figures for accessibility.
The question isn’t “how much capital is being deployed?” It’s “how many companies can access that capital?” The answer: fewer than ever.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
