Rethinking Venture Capital: Why Raising Multiple Rounds May Not Be Right for Your Startup

Lessons from SecurityPal’s founder on choosing profitability over the fundraising treadmill

The fundraising script in Silicon Valley

In Silicon Valley, the standard playbook seems clear: raise venture capital, grow sales, raise more, and repeat until an IPO or acquisition. This fundraising treadmill has propelled many startups to success—but it also leaves countless others stranded when growth outpaces sustainability.

Pukar Hamal’s wake-up call

Pukar Hamal, founder and CEO of SecurityPal AI, followed the script—at least initially. After bootstrapping to $1 million ARR, he raised a $21 million Series A in 2021, backed by top-tier investors like Craft Ventures and Andreessen Horowitz. SecurityPal, which uses AI to streamline enterprise security reviews, quickly attracted customers such as Airtable, Figma, and Grammarly.

But a year later, the company was on the brink of collapse. With rising interest rates crushing the VC market and just 14 months of runway left, Hamal faced the harsh reality of burning too much capital. A painful layoff forced him to rethink how he wanted to grow.

Shifting from growth-at-all-costs to durable growth

Hamal decided to steer away from the VC-fueled growth-at-all-costs mentality. Instead, he focused on durable growth—profitable, steady scaling that prioritized customer success and healthy margins.

• Customer depth over speed: By limiting the number of simultaneous deployments, his team ensured each client had a smooth onboarding process, reducing churn.
• Profitability first: Hamal pushed the business toward cash flow break-even, valuing healthy gross margins and strong cash collection over top-line growth alone.
• Control and focus: With fewer external capital injections, Hamal kept tighter control of SecurityPal’s direction, avoiding pressure to overspend on headcount or chase unsustainable expansion.

The hidden price of venture capital

Hamal acknowledges that venture capital isn’t inherently bad. For some startups, especially those in highly competitive or capital-intensive industries, repeated funding rounds are essential. But he highlights the cost beyond equity dilution:

• Increased investor expectations.
• Pressure to prioritize fast revenue growth over profitability.
• Risk of sacrificing long-term customer health for short-term metrics.

In contrast, a slower, profitability-driven path can give startups resilience—even when the market shifts.

A nuanced alternative for founders

SecurityPal has not raised another round since its Series A. While Hamal isn’t ruling out future fundraising, he’s clear about one thing: his goal is to build a company that doesn’t need constant venture backing to survive.

His experience serves as a reminder to founders: venture capital is a tool, not a mandate. The real question is whether your startup is better served by sprinting for scale or pacing for sustainability.