Research from Startups.co.uk found a 68% year on year rise in UK founders choosing to self fund. The data comes from businesses that applied to the 2025 and 2026 Startups 100 Index and answered questions on how their ventures were financed.
Self funding now ranks top among funding choices and Startups.co.uk reports that 40.2% of applicants to the 2026 index said they bootstrapped their business. That compares with 23.9% in 2025. The data comes from surveys of index applicants, who could select more than one funding type.
Other routes appear less popular with angel funding at 33.2% in 2026, down from 42.6% a year earlier, according to Startups.co.uk. Venture capital use edged down to 15.9% from 17.0%. Private equity also went down, from 14.2% to 12.6%.
What Makes Self Funding Attractive Right Now?
Flow Collingwood, founder and chief executive of Pan Galactic, gives a reason. His company ranked 23rd in the 2026 Startups 100 Index and has been entirely self funded. 鈥淲hat we are building operates in areas that are still emerging, and early on it did not fit neatly into traditional funding frameworks used by investors, grant bodies, or lenders,鈥� he says.
He adds that outside money suits a narrow set of companies. 鈥淰enture capital only makes sense if you are building a business that can scale to venture outcomes, with a credible plan to reach them,鈥� Mr Collingwood says. Debt can work too, though he says it suits firms that already earn steady revenue.
Self funding also gives breathing space. 鈥淓arly on, founders need space to test assumptions, refine the market, resolve internal challenges, and adapt without external pressure,鈥� Mr Collingwood says. 鈥淪elf funding allows that learning to happen on the founder鈥檚 timeline.鈥�
That freedom appears to resonate with many applicants. The rise in bootstrapping runs alongside a drop in founders mixing money sources, likely because founders want to make more decisive choices about how companies get off the ground.
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Are Founders Stepping Away From Mixed Funding Models?
The data shows fewer founders juggle different funding routes. Startups.co.uk found a 22% fall in businesses using more than one funding type. In 2025, 27% of startups said they used a mix. That number went down to 21% in 2026.
Family and friends funding came up quite a bit, reaching 9.3% from 5.2%, according to Startups.co.uk. Business grants also rose to 11.7% from 8.0%. Business loans showed growth too, though from a low base, rising to 4.2% from 1.7%.
Zohra Huda, editor of Startups.co.uk, links the trend to changing tools and costs. 鈥淭he past year has seen bootstrapping going from a last resort to a strategic masterstroke,鈥� she says. She adds that founders can 鈥渓everage AI to build leaner, more capital efficient businesses without the huge overheads and strings attached of traditional venture capital.鈥�
Founders are opting for using their own resources and small personal networks rather than chasing traditional venture capital or loans. That way, companies can grow at a pace that suits their stage and market readiness, while giving founders room to experiment and adapt.
Analysts at Startups.co.uk say this trend may lead to a more resilient and innovative startup community, with businesses better able to respond to challenges without the pressure of external investors.
