Three most common barriers startup founders face in early stages

The early days of building a startup are some of the most exciting. You’ve got the energy, the ideas, and the drive to build something from scratch. But those early days can also be incredibly tough.

Ask any founder, and they’ll tell you: the biggest challenges aren’t always the ones you expect. It’s not just technical hurdles or market risk. It’s often the more fundamental stuff – getting enough funding, focusing on the right things, and finding the right people to come along for the ride.

We sat down with a group of startup founders working across medtech, software, and emerging tech to understand what slowed them down early on. While their industries varied, the same three roadblocks kept coming up.

If you’re building something now or thinking about taking the leap, knowing what’s ahead can help you move smarter and faster.

1. Raising capital is tough

Most startups need money to grow and running out of it is one of the most common reasons startups fail. But getting that first injection of funding can be tougher than expected.

In theory, it sounds straightforward: have a great idea, pitch it, get cash. In practice, it’s far more complex.

1a. Startups need to show real potential to scale

Investors are looking for businesses that can grow quickly and generate a big return. If your idea doesn’t clearly show how it can bring in customers, expand across markets, and deliver solid revenue, it’s likely to get passed over.

It’s not enough to have a good idea. You’ve got to show how that idea becomes a sustainable business. That means clear traction, a strong value proposition, and a plan to grow.

1b. Funding doesn’t always come from where you think

Daish Malani is the founder of Add-Life Technologies, a medtech company using virtual reality to help stroke survivors through rehabilitation. Despite building something tangible and clearly impactful, he found it hard to raise capital from traditional investors.

“Money seems to come from completely different sources than I originally thought,” Daish told us.

He ended up searching for non-traditional backers, like government grants, impact-focused investors, and health innovation funds. These groups often have different priorities than venture capitalists, and are a worthy path to explore.

1c. Preparation makes all the difference

Marcos Salinas, co-founder of Hubble, put it simply: "Too many founders aren’t ready when they start raising money."

That might mean launching into conversations with investors before the product is validated, or going out with financials that don’t hold up under scrutiny. Often, it’s a case of unclear messaging, a story that doesn’t land or slides that confuse rather than clarify.

Investors are backing you as much as they’re backing the business. They want to feel confident that you understand your customers, your numbers, and the pathway ahead. The more prepared you are, the easier that trust is to build.

2. Founders focus on the wrong things

In the early stages, it’s easy to mistake motion for progress. You're busy – tweaking designs, building features, reworking branding. It feels productive, but often it’s not what matters most.

Again and again, founders told us they made their biggest leaps forward when they simplified. When they stopped trying to impress and started zeroing in on one real, specific problem their customers needed solved.

Daish pointed out that some of the most successful products didn’t have perfect design when they launched. “Some of the companies that do well don’t care at all about their UI,” he said.

That doesn’t mean design isn’t important. But polish only matters once the product is clearly working. If people don’t need it, no amount of slick animation or branding will save it.

James Thompson, a UX designer with 20 years of experience, put it this way: “The best products do one thing, and they do it better than anything else out there.”

Trying to be everything to everyone is a trap. Early wins come from nailing one use case, for one group of users, in a way that genuinely improves their lives. Once that foundation is in place, you can expand and improve. But until then, keep it simple.

3. Hiring the right people is critical and complicated

Your team is everything. The people you bring in during the early stages help shape your product, your culture, and your momentum. But finding the right people, and affording them, can be a real challenge.

Founders often hit two major roadblocks here: high costs and poor fit.

3a. Great talent doesn’t come cheap

In-demand roles like software engineers, product managers, and growth specialists can be expensive. In emerging fields like VR or AI, salaries can be even higher. For early-stage startups, that’s a tough pill to swallow – especially when there’s not much revenue coming in yet.

Some founders get creative, offering equity, flexible working, or the opportunity to work on something meaningful. These trade-offs can work well, but only if expectations are clear and everyone’s aligned. One bad hire in a small team can slow the whole business down.

3b. Fit matters more than a perfect resume

Again and again, founders said their best team members weren’t always the most qualified on paper. They were the ones who shared the mission, who wanted to learn, and who thrived in a fast-paced, uncertain environment.

People who were curious, proactive, and good communicators often outperformed those with fancy credentials but little startup grit. Startups need people who can figure things out, adapt quickly, and pitch in wherever needed. Skills can be learned. Attitude can’t.

Final thoughts

These three challenges – raising money, setting the right focus, and hiring the right people – are nearly universal. Every founder hits them in some form. The trick is not avoiding them, but being ready for them.

• Raising capital takes more than passion. It requires proof, planning, and persistence. You need to find the right backers for your stage, your vision, and your market.

• Finding focus means resisting the urge to build too much. You don’t need to do it all. You just need to solve one thing for someone who really needs it.

• Hiring right isn’t never building a team of superheroes. It’s finding people who care about the work as much as you do and who are willing to grow with the business.

There’s no magic formula for startup success. But if you understand these common barriers and prepare for them, you’ll give yourself a much stronger chance. The early stage of any startup is where the foundation gets laid. Make that foundation clear, focused, and built with the right people beside you – and you’ll be ready to go much further.

At Stone & Chalk, we’ve seen founders overcome these challenges time and again. Whether you’re still validating your idea or scaling your team, you don’t have to figure it out alone. From mentors and funding networks to a community of like-minded builders, we’re here to help you take the next step. Find out more.