Topics

Raising multiple rounds of venture capital might be wrong for your startup

Tech and VC heavyweights join the Disrupt 2025 agenda

Netflix, ElevenLabs, Wayve, Sequoia Capital, Elad Gil — just a few of the heavy hitters joining the Disrupt 2025 agenda. They’re here to deliver the insights that fuel startup growth and sharpen your edge. Don’t miss the 20th anniversary of TechCrunch Disrupt, and a chance to learn from the top voices in tech — grab your ticket now and save up to $600+ before prices rise.

Tech and VC heavyweights join the Disrupt 2025 agenda

Netflix, ElevenLabs, Wayve, Sequoia Capital — just a few of the heavy hitters joining the Disrupt 2025 agenda. They’re here to deliver the insights that fuel startup growth and sharpen your edge. Don’t miss the 20th anniversary of TechCrunch Disrupt, and a chance to learn from the top voices in tech — grab your ticket now and save up to $675 before prices rise.

Most Popular

Appeals court says NLRB structure unconstitutional, in a win for SpaceX

Why Paradigm built a spreadsheet with an AI agent in every cell

HR giant Workday says hackers stole personal data in recent breach

Sam Altman, over bread rolls, explores life after GPT-5

How your solar rooftop became a national security issue

A comprehensive list of 2025 tech layoffs

NASA has sparked a race to develop the data pipeline to Mars

Latest

Amazon

Apps

Biotech & Health

Climate

Cloud Computing

Commerce

Crypto

Enterprise

EVs

Fintech

Fundraising

Gadgets

Gaming

Google

Government & Policy

Hardware

Instagram

Layoffs

Media & Entertainment

Meta

Microsoft

Privacy

Robotics

Security

Social

Space

Startups

TikTok

Transportation

Venture

Events

Startup Battlefield

StrictlyVC

Newsletters

Podcasts

Videos

Partner Content

TechCrunch Brand Studio

Crunchboard

Raising multiple rounds of venture capital might be wrong for your startup Julie Bort AM PDT · August 21, 2025 There’s a generally accepted script in Silicon Valley: Identify a startup idea. Sell a chunk of your company to raise venture capital. Make sales. Raise more venture capital, and make more sales. Repeat until the company goes public, or gets acquired, hopefully for billions either way.

But what if you didn’t get on a fundraising treadmill after taking a first round? What if you structured your company to sprint to profitability through slower, sustainable growth, rather than the reverse — unprofitable growth — as so many VC-backed companies do?

That’s the question that Pukar Hamal, founder and CEO of SecurityPal AI, asked himself after raising a $21 million series A round in 2021 and, a year later, almost running out of money. The round was led

“I started the company back in March of 2020. It’s my second company that I founded,” he said on TechCrunch’s Equity podcast this week.

His previous company, which sold via an acqui-hire, had raised its first capital before product market fit, he said. That’s pretty common. Founders often raise before they’ve got a product that they know customers will pay well for.

In retrospect, Hamal described that decision as his big “mistake.”

So for SecurityPal, he did the reverse. He waited until the company hit $1 million ARR, which took about a year, and then did his first and only raise, the Series A.

Techcrunch event Tech and VC heavyweights join the Disrupt 2025 agenda Netflix, ElevenLabs, Wayve, Sequoia Capital, Elad Gil — just a few of the heavy hitters joining the Disrupt 2025 agenda. They’re here to deliver the insights that fuel startup growth and sharpen your edge. Don’t miss the 20th anniversary of TechCrunch Disrupt, and a chance to learn from the top voices in tech — grab your ticket now and save up to $600+ before prices rise. Tech and VC heavyweights join the Disrupt 2025 agenda Netflix, ElevenLabs, Wayve, Sequoia Capital — just a few of the heavy hitters joining the Disrupt 2025 agenda. They’re here to deliver the insights that fuel startup growth and sharpen your edge. Don’t miss the 20th anniversary of TechCrunch Disrupt, and a chance to learn from the top voices in tech — grab your ticket now and save up to $675 before prices rise. San Francisco | October 27-29, 2025 REGISTER NOW SecurityPal uses AI to speed enterprise security due diligence, which occurs in every large enterprise transaction when signing new IT contracts. SecurityPal promises to shrink the security review from months to days or even hours, helping companies to save money on the process while closing deals faster. It has big-name customers like Airtable, Figma, LangChain, and Grammarly, among others.

But in 2022, he faced a crisis. Interest rates rose and crashed the venture capital market. Raising more funds would be tough. “We were burning a lot of capital,” he said. “We were, like, 14 months away from running out of money.”

It was a wake-up call. Hamal had to drastically cut expenses, which meant a big layoff. That was so painful, he said, that he vowed to do things differently. “We extended our runway, and we tried to drive the company towards cash flow break even, cash flow positive profitability,” he said.

Although in 2025 VC money is flowing again, especially for AI startups, “we haven’t raised another round,” he said. The reason? He sees now that VC money comes with its own price tag.

“The more capital we raise, the more expectations there are going to be, the more we’re going to sort of give up control of the company, the more pressure we’re going to feel to just hire a bunch of people that might not work out,” he said.

“For venture capital, what matters is growth,” he said. For some investors, fast revenue growth is more important than improving gross margins, he said.

That means a company can fall deeper in the red even as it sells more. VCs trust that founders will figure out profitability later. Until then, they can keep raising funds. And if they can’t, the company might not survive.

Hamal wanted what he described as “durable growth” for SecurityPal: slow and solid. If sales were limited to a handful of deployments at any given time, his team could ensure that all customers were well onboarded, even for their edge cases.

He didn’t want fast sales only to have customers not use the product and churn come renewal time. “That story happens all the time because there’s so much pressure on companies to grow,” he said.

On the other hand, he said he found that slow ARR can lead to “healthy gross margins, great cash collection.”

Hamal is clear that he’s not advocating against venture capital. Other startups may have to keep raising and chasing fast ARR. He’s not even ruling out another round for SecurityPal. He just wants more founders to think about the slow-growth, nuanced alternatives.

“I raised venture capital. And I haven’t raised it again because what I’m trying to do is put the business in a position where it doesn’t need venture capital over and over again,” he said.

Listen to the whole conversation on the Equity podcast, which includes Hamal’s suggestions on how to find capital outside of venture.

Topics

Julie Bort Venture Editor

October 27-29, 2025 San Francisco Put your brand in front of 10,000+ tech and VC leaders across all three days of Disrupt 2025. Amplify your reach, spark real connections, and lead the innovation charge. Secure your exhibit space before your competitor does.

Most Popular Appeals court says NLRB structure unconstitutional, in a win for SpaceX Aria Alamalhodaei

Why Paradigm built a spreadsheet with an AI agent in every cell Rebecca Szkutak

HR giant Workday says hackers stole personal data in recent breach Zack Whittaker

Sam Altman, over bread rolls, explores life after GPT-5 Maxwell Zeff

How your solar rooftop became a national security issue Connie Loizos

A comprehensive list of 2025 tech layoffs Cody Corrall Alyssa Stringer Kate Park

NASA has sparked a race to develop the data pipeline to Mars Aria Alamalhodaei

X LinkedIn Facebook Instagram youTube Mastodon Threads Bluesky TechCrunchStaffContact UsAdvertiseCrunchboard JobsSite Map Terms of ServicePrivacy PolicyRSS Terms of UseCode of Conduct Pixel 10Made © 2025 TechCrunch Media LLC.