Angel investor explains why it's hard — but not impossible — for startups to get funding right now (2025)

Mon, Apr 28, 2025, 5:10 PM 3 min read

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Obtaining funding for a growing business during times of economic uncertainty can be particularly difficult, one angel fund investor said.

But despite the current market climate, it's not impossible if you take the right steps.

"What [macro uncertainty] typically means is when the stock market's not doing super well, you are likely to have fewer new companies," angel fund investor and entrepreneur Sarah Kunst explained on Yahoo Finance's Financial Freestyle podcast (see video above or listen below). "And then because of that, it means that venture investors, like me, we're not getting those early investment dollars back, because we tend to get them back when companies get acquired through an M&A process, which has also been slower."

Budding entrepreneurs can still obtain capital from angel investors like Kunst, but they will want to ensure their business plans are ironclad.

For starters, it's important for entrepreneurs to know the growth potential of the sectors they're in. Kunst said she's keeping a close eye on the cybersecurity sector for potential new investments.

If the market isn't large enough for your business to grow into and make immense profits, then it'll be harder to secure investment.

"What it's a lot easier to do is to be a billion-dollar company in a trillion-dollar space, because that means you're still a big company," Kunst explained. "I, as an investor, might be investing at a $2 [million] or $5 [million] or whatever million valuation, but I can still make a ton of money because I can see a path where you can sort of mess up everything, hit lots of bad luck, and still become that billion-dollar company."

Angel investors are also looking for an explanation of why you are the best person to found and run the company. Without experience in your given field to back up your idea, it may be harder to secure investors.

When being pitched, Kunst said she wants entrepreneurs to be able to tell her about the knock-on effects, the problem they're solving, and the consumer base that will pay for their idea. Furthermore, she said, she wants entrepreneurs to tell her, "Here's why I'm a good fit for it. I've worked in this space for five years."

"You typically see people have either education, lived experience, or professional experience in a space," she added.

Ultimately, Kunst acknowledged that the current market situation is not ideal for investors to sign on to new ideas. Because of the consistent market fluctuations, Kunst said there's "less money to deploy and to invest in new companies," which will ultimately hurt an entrepreneur's chances.