Shifting Fundraising Landscape: Should Founders Reassess the VC Path? For years, founders were advised to raise enough capital to last 18-24 months. But recent data from Carta suggests this is changing. Time between rounds is growing, and raising capital is becoming more difficult and costly. The VC Playbook: A One-Size-Fits-All? When capital was cheap and abundant, founders gravitated toward a model focused on rapid, top-line growth. The trade-off? (Significant) dilution in exchange for the potential of eventually owning a small slice of a large business. But as the economic landscape shifts, several critical challenges have emerged: Extended Fundraising Cycles: The growing gap between rounds means founders need to stretch capital longer, which can stall growth or lead to decisions around scaling back which in itself may impact the ability to raise again. Rising scarcity and higher Costs of Capital: Inflationary years and market corrections have made it more expensive to achieve the same milestones. The capital that seemed sufficient two years ago may now fall short. And capital is harder to access. These realities prompt an important question: have founders fully assessed the risks associated with the venture capital path? The truth is, not every business can—or should—scale at the aggressive rates that VC funding demands. Is There Another Way? A more sustainable approach is gaining traction—one that prioritises profitability earlier in the life cycle. For many founders, this could lead to a better risk-adjusted outcome. The Transition Challenge However, shifting from VC to a more private equity-style model isn’t easy. Many companies find themselves stuck—too slow for VC but not profitable enough for PE. At Resurge Growth Partners, we’ve noticed that more and more founders are asking these very questions and re-evaluating which path is best. We’re increasingly working with founders who are navigating this shift, helping them find the right balance between growth and profitability. It’s a conversation worth having. #ventureequity #privateequity #venturecapital
Aaron M.
2mo
Nice Oren Peleg. The longer span between raises also dampens the market sentiment whiplash of what companies are “supposed to be doing” depending on VC fads and fund cycles.
Great article & graph ✅
The evolving fundraising landscape presents challenges and opportunities for founders. Oren Peleg
CEO & Founder at Briton Media Group | Empowering Businesses Through Podcasting
2moThe VC landscape is certainly shifting, and it's important for founders to reassess their approach to fundraising. The emphasis on rapid growth can be challenging, especially in today's economic climate. A more sustainable approach that prioritizes profitability is definitely worth considering. It's essential to find the right balance between growth and profitability to achieve a better risk-adjusted outcome.