Early‑stage entrepreneurs across the United States are feeling the pinch of rising expenses, but a recent Mercury survey reveals they are not backing down. The fintech platform surveyed 1,500 founders who launched companies within the past six years and found that three‑quarters saw costs higher than anticipated—a jump from 66% the previous year.
Cost pressures and how founders are responding
Eight percent of respondents said they had already altered their business models in response to the tougher economic environment. Changes most often involved adjusting pricing, tightening cash reserves, switching suppliers, or postponing non‑essential investments.
Both first‑time and repeat founders reported similar surprise at the cost surge, suggesting the issue is broader than individual inexperience. More than half (51%) blamed inflation for the strain, up from 36% a year earlier.
Cash buffers and modest price hikes
Mercury’s data supports a “cash‑buffer” strategy: companies founded in the last six years are holding, on average, 27% more cash on hand in 2026 than they did in 2024. When founders chose to pass costs on to customers, 68% increased prices by only 5% to 10%, a range most consumers have already become accustomed to.
Staffing decisions stay relatively stable
Despite headlines about widespread layoffs, the survey shows a more measured picture. While the majority of firms remain healthy in hiring—especially those that have embraced artificial intelligence—12% reported laying off or reducing staff at least once over the past year due to higher operating costs.
Customer behavior and new opportunities
Ninety percent of founders observed shifts in customer behavior, whether driven by their own pricing moves, competitors’ actions, or the broader economy. Interestingly, 28% of respondents in technology and 26% in manufacturing reported larger contracts or orders, and another 28% said they attracted new customers when rivals raised prices.
Confidence remains high, especially among AI adopters
Even with tighter budgets, 84% of founders said their confidence in their business outlook improved year over year. This optimism translates into compensation: 81% of confident founders pay themselves a market‑rate salary, compared with just 56% of those whose confidence stagnated or declined.
Adoption of artificial intelligence appears to boost founder pay as well. Eighty percent of founders whose companies use AI report market‑rate salaries, versus 57% of non‑AI adopters. Male founders (82%) are more likely than female founders (63%) to report market‑rate compensation.
What this means for the entrepreneurial ecosystem
The data suggests that higher costs are prompting founders to act with precision rather than panic. Most are modestly repricing, preserving cash, switching vendors when needed, and delaying discretionary investments—all while keeping teams largely intact. The overall picture is one of resilience and adaptability, underscoring the continued vitality of America’s startup community despite a tougher economic backdrop.
These findings, based on a May 2026 online survey of 1,500 U.S. adults involved in starting a company within the last six years, were provided by research panel Sago. Percentages are rounded to whole numbers and may not total 100%.
Original reporting: KEYT (Ventura/Santa Barbara) — read the source article.
