The Ultimate Guide to Raising Capital in 2025: Insights from the 2024 OASB Annual Report

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As we enter 2025, startup founders face a dynamic and ever-changing funding landscape. The 2024 OASB Annual Report reveals critical insights about small business capital formation in the United States. This comprehensive report outlines trends, challenges, and opportunities for startups seeking funding. Below, we present an expanded and detailed analysis explicitly designed for startup founders aiming to raise capital and scale their businesses in 2025.

1. The Importance of Small Business Capital Formation

Small businesses continue to be the lifeblood of the U.S. economy. From creating jobs to driving innovation, their importance cannot be overstated:

• Small businesses have created 80% of net new jobs since 2011.

• The majority of Americans (94%) agree that everyone deserves a fair chance to start and grow a business.

However, the ability to raise capital remains a pressing concern. 77% of small business owners had difficulty accessing the funding they needed to thrive. This creates a significant gap for entrepreneurs, particularly for underrepresented groups and founders in rural areas. For founders in 2025, overcoming these barriers will require strategic planning and innovative approaches.

2. Key Funding Trends in 2024: Adapting to a New Reality

The funding environment in 2024 highlighted several major trends:

• Seed-stage activity dropped to only 10% of total deal values, reflecting a decline in pre-seed and seed investments.

• Median seed-stage deal values increased, showing that while fewer deals closed, those that did were of higher value.

• Top industries like technology, health care, and manufacturing continued to dominate capital attraction, but emerging sectors like green energy and artificial intelligence are gaining ground.

These trends suggest a need for founders to focus on building strong networks, developing clear value propositions, and being prepared for increased scrutiny from investors.

3. The Persistent Challenges of Accessing Capital

Access to funding remains one of the most significant hurdles for startups:

• 41% of small businesses seeking financing in 2024 pursued less than $50,000.

• Uneven cash flow and rising operational costs were identified as top challenges.

• Underrepresented founders—including women, minorities, and rural entrepreneurs—faced systemic fundraising barriers.

To bridge these gaps, founders must explore non-traditional funding sources, including grants, crowdfunding, and strategic partnerships.

4. Crowdfunding: A Powerful but Underutilized Tool

Regulation Crowdfunding has proven to be a valuable resource for startups:

• The median raise in 2023 was $106,000, with businesses across 1,750 cities participating.

• Crowdfunding campaigns are particularly effective for businesses with strong community ties and clear storytelling capabilities.

• 2-3 years old startups with small but growing teams (2-5 employees) often find the most success.

For 2025, founders should leverage crowdfunding not just as a funding tool, but as a way to validate their business models and build loyal customer bases.

5. Women and Minority Entrepreneurs: Bridging the Equity Gap

While progress has been made, women and minority entrepreneurs still face significant hurdles:

• Women-owned businesses grew by 18% over the past five years, far surpassing the 1% growth rate for men-owned businesses.

• However, women-only teams received just 2% of VC dollars, highlighting a persistent funding disparity.

• Entrepreneurs of color and those in rural areas continue to be disproportionately affected by funding inequities.

In 2025, accelerators, mentorship programs, and networking events tailored to underrepresented founders can play a pivotal role in leveling the playing field.

6. Angel Investors and Venture Capital: A Mixed Landscape

The trends in angel and VC funding in 2024 offer both challenges and opportunities for startups:

• Angel funding activity decreased by 12%, though the average deal size held steady.

• Later-stage rounds (Series C and D) saw higher median deal values, indicating increased investor confidence in mature startups.

• Startups seeking Series A funding face increased scrutiny, with only 13% of seed-stage companies advancing to Series A within two years.

To attract investment, founders must focus on firm financial performance, precise market positioning, and robust growth strategies.

7. IPOs and Public Offerings: Is It Time to Go Public?

Public offerings remain a viable but complex path for startups:

• The number of IPOs in 2024 was well below 2021 levels, but there are signs of a rebound.

• Small public companies accounted for 40% of IPOs but only 4% of deal value, reflecting valuation struggles.

• Many founders are exploring alternatives to IPOs, such as private placements or mergers and acquisitions.

For startups considering going public in 2025, weighing the benefits of enhanced liquidity against the costs of regulatory compliance and market volatility is essential.

8. Policy Recommendations and Their Implications for Founders

The OASB report includes several key policy recommendations to improve capital access:

• Expanding educational resources to help founders navigate the complexities of fundraising.

• Supporting diverse capital allocators to ensure equitable funding opportunities.

• Encouraging mentorship to connect early-stage entrepreneurs with experienced advisors.

By aligning with these initiatives, startups can benefit from emerging opportunities.

9. Navigating the Capital Landscape in 2025

Preparation is key for startups aiming to secure funding in 2025:

• Build a strong operational foundation and focus on achieving sustainable growth.

• Develop a compelling pitch deck that articulates your value proposition and market opportunity.

• Leverage platforms like crowdfunding and venture debt to diversify your funding sources.

Founders should also stay informed about industry trends and actively participate in networking events to expand their opportunities.

10. Conclusion: Seizing Opportunities in 2025

The 2024 OASB Annual Report provides a roadmap for navigating the challenges and opportunities in the capital markets. For startup founders, the key to success in 2025 lies in adaptability, strategic planning, and leveraging available resources.

Understanding the trends and taking proactive steps to address funding challenges can position your business for long-term growth and success. Let’s make 2025 the year of your startup's transformation and achievement.

If you're considering raising capital in the new year, contact Jeff "Fuzzy" Wenzel, CEO of Pre-IPO Hype. With years of equity crowdfunding and startup funding expertise, Jeff can help you navigate the complexities of raising capital and scaling your business. Connect with him to learn how to turn your vision into a thriving reality in 2025.

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