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- ♞ The value of external capital
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Why you shouldn’t let one VC continuously fund you…
Most founders treat an "internal round" like a victory lap. Your current investors want to double down, they’re skipping the gruelling due diligence, and the cash could be in the bank by Friday.
Your inner voice screams, "Take the path of least resistance!" But before you sign that term sheet, you need to understand the Inside Round Paradox. What feels like a shortcut today is often a trapdoor for your Series A or B.
Today, we’re looking at why "easy money" from existing backers can actually de-value your company in the long run.
In-house funding isn't always a signal of strength. Often, it’s a signal of convenience. When you stop looking for outside capital, you lose the most important thing a founder has in a negotiation: Market Tension.
Here is what most founders miss when they stay "in the family":
The Valuation Ceiling: Your current investors already own a piece of you. They are incentivized to keep the valuation at a level that protects their ownership percentage, not necessarily what the market would pay.
The Overweight Cap Table: If one or two firms own too much of your company too early, it can scare away top-tier lead investors in later rounds who want a larger "slice" for themselves.
The Adverse Signalling: When you go to raise your next "real" round, new investors will ask, "Why didn't you go to market last time?" If they suspect you did an internal
The easiest path today usually creates the hardest path tomorrow. To avoid the trap, treat your current investors as supporters, not a safety net.
High-status founders never stop building relationships with new capital. They know that a diverse cap table is a resilient cap table. If your current investors want to follow on, great, but make them compete for the privilege.
Don't let the comfort of an existing relationship blind you to the cold reality of the venture market.
Are you looking to fundraise? Here is how I can help:
📱 Book a Strategy Call to get 1:1 feedback on your pitch, pitch deck and/or fundraising strategy.
Onwards and Upwards,
