There is a generally accepted scenario in Silicon Valley: Identify a boot idea. Sell a piece of your company to raise business funds. Make sales. Increase more business risk funds and make more sales. Repeat until the company is public or acquired, we hope that for billions in every way.
But what if you didn’t get a capital concentration corridor after receiving a first round? What if you set up your company to promote profitability through slower, sustainable growth, rather than in reverse-not profitable growth-as many companies supported by VC do?
This is the question that Pukar Hamal, founder and chief executive of SecurityPal aiHe asked himself after a round of $ 21 million in 2021 and, a year later, is almost exhausted by the money. The round was driven by David Sacks’s Craft Ventures, with the participation of Martin Casado’s Andreessen Horowitz and co -founder Okta Frederic Kerrest.
“I started the company in March 2020. It’s my second company I founded,” TechCrunch told PodCast Equity this week.
His previous company, which was sold through an Acci-Hire, had increased its first chapter before buying products, he said. This is quite common. Founders often increase before they have a product that know that customers will pay well.
In the aftermath, Hamal described this decision as his big “mistake”.
So for security, it did the other way around. Wait until the company would hit $ 1 million ARR, which took about a year, and then made the first to increase, the series A.
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SecurityPal uses AI to accelerate due diligence of business security, which appears in every major business transaction when signing new IT contracts. SecurityPal promises to shrink security revision from months to days or even hours, helping companies save money in the process while closing faster. It has a big name such as Airtable, Figma, Langchain and Grammarly, among others.
But in 2022, he faced a crisis. Interest rates rose and crushed the business capital market. The concentration of more chapters would be tough. “We ended up a lot of capital,” he said. “We were, as, 14 months away from exhaustion of money.”
It was an awakening call. Hamal had to drastically reduce costs, which meant a great dismissal. This was so painful, he said, that he swore to do things differently. “We expanded our corridor and tried to drive the company to cash flow, even cash flows positive profitability,” he said.
Although in 2025, VC money is again flowing, especially for the newly established AI companies, “we haven’t uploaded another round,” he said. The reason? He now sees that VC money comes with his own price.
“The more capital we increase, the more expectations are going to be, the more we will give up on the company control, the more pressure we will feel to hire only one bunch of people who may not work,” he said.
“For business capital, what matters is growth,” he said. For some investors, rapid revenue increase is more important than improved mixed margins, he said.
This means that a company can fall deeper into red, even when selling more. VCS trust that the founders will understand profitability later. Until then, they can continue to raise funds. And if they can’t, the company may not survive.
Hamal wanted what he described as “resistant development” for security: slow and steady. If sales were limited to a handful of developments at any time, his team could ensure that all customers were well embarked on, even for their limbs.
He did not want quick sales only to have customers not to use the product and to refresh the refresh time. “This story happens all the time because there is so much pressure on companies to grow,” he said.
On the other hand, he said that he found that the crude ARR could lead to “healthy gross margins, a large collection of cash”.
Hamal is clear that he does not support business capital capital. Other newly established businesses may need to continue to grow and hunt fast ARR. It doesn’t even exclude another round for securitypal. He just wants more founders to think about the nights, separate alternatives.
“I put the capital capital capital and I haven’t uploaded it again because what I am trying to do is put the business in a position where no business capital needs again and again,” he said.
Listen to the whole discussion about Podcast Equity, which includes Hamal’s suggestions on how to find out -of -business capital.
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