A tightening capital market is forcing global entrepreneurs to ditch rapid expansion plans in favor of immediate profitability and disciplined growth. New research from EY-Parthenon reveals that 59% of surveyed founders find growth capital more constrained than it was a year ago, with 20% citing reduced capital access as a significant risk compared to just 11% of large enterprise CEOs.
This funding squeeze has pushed 91% of entrepreneurs to prioritize margin preservation, cash flow improvement, and long-term resilience over scaling quickly into new geographic markets. Andrea Guerzoni, Global Vice Vice Chair at EY-Parthenon, stated that "tolerance for missteps has narrowed, making execution, quality and financial control more important than headline expansion."
Despite these capital constraints, artificial intelligence has become a standardized line item in the entrepreneurial budget, with 80% of founders planning to increase AI investments this year. However, the pressure is mounting to connect this spending to tangible returns, as many firms struggle to track whether the technology actually improves revenue or operational margins.
Beyond measurement hurdles, talent remains a bottleneck to execution; 25% of respondents identified limited AI and data skills in their current workforce as the primary obstacle to generating value from the technology. To bridge this gap, 46% of entrepreneurs are focusing their workforce strategies on reskilling and upskilling existing staff, while 41% are actively redesigning operational roles to combine human and machine capabilities.
The study also exposes a stark strategic divide between agile startups and large corporations regarding external collaborations. Only 32% of entrepreneurs plan to pursue strategic alliances, and just 26% are open to joint ventures, compared to 57% and 45% of large enterprise CEOs, respectively. This cautious stance reflects a deliberate effort by founders to maintain control and agility while managing limited corporate bandwidth.
Guerzoni noted that while many founders remain cautious, "alliances are an underused lever for founders, offering access to a broader ecosystem to power scale, skills and market reach without the cost or complexity of building everything alone."