GoKawiilFounders Urged to Diversify Startup Funding Beyond Venture Capital
An Entrepreneur contributor argues that startups can no longer rely solely on a single venture capital raise as their financing plan, citing a sharp drop in global VC fundraising and slower exits that have left many funds unable to return money to their own investors. The piece recommends founders build a three-part capital stack combining equity, debt-based instruments and profitability to reduce dependence on favorable market timing.
GoKawiil's interpretation of the reporting above, not reported fact.
With VC fundraising down roughly 60% from its peak and funds delaying payouts to backers, startups that plan around a single funding round face heightened risk of running out of runway. Diversifying into debt, revenue-based financing and a path to profitability gives founders more leverage and control when equity markets tighten.
- Global VC fundraising dropped nearly 60% from 2022 to 2023, reaching its lowest level since 2015.
- A diversified capital stack—equity, debt-like instruments, and profitability—reduces reliance on any single funding source.
- Achieving default-alive status or a credible path to profitability makes external financing optional rather than essential.
Venture Deals by Brad Feld and Jason Mendelson — If you're rethinking your capital stack, this is the classic founder's guide to how term sheets, equity, debt and investor dynamics actually work. It's a practical companion to the article's argument that you should understand every financing option before defaulting to the next VC round.
See Venture Deals by Brad Feld and Jason Mendelson on Amazon → Affiliate link — we may earn a commission on purchases, at no extra cost to you. Product picked by AI based on this article; it is not a tested recommendation.Source: entrepreneur.com — Will Fan, 2026-08-28
Published there as: “How to Build a Capital Stack That Gives Your Startup More Control”
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