Silicon Valley has a commonly accepted script. Identify startup ideas. Sell company chunks to source venture capital. We will sell. We will raise more venture capital and sell more. Repeat until the company is publicly available or acquired.
But what if you didn't take part in the fundraising treadmill after getting your first round? What if, like many VC-backed companies, you can form your company through slower, sustainable growth rather than the other way around?
This is a question that SecurityPal AI founder and CEO Pukar Hamal asked himself after raising a $21 million Series A round in 2021, and spent most of his money a year later. The round was led by David Sacks' Craft Ventures with participation from Andreessen Horowitz's Martin Casado and Okta co-founder Frederic Kerrest.
“I started the company in March 2020. My second company was founded,” he told TechCrunch's Equity Podcast this week.
His previous company was sold through acquisitions and raised initial capital before it fitted into the product market, he said. That's pretty common. Founders often grow products that their customers know to pay for before they get it.
Looking back, Hamal described the decision as his major “mistake.”
For SecurityPal, he did the opposite. He waited for the company to reach $1 million, but that took about a year. He then became his first and only promotion, Series A.
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However, in 2022 he faced a crisis. Interest rates rose, crashing the venture capital market. It's going to be difficult to raise more funds. “We were burning a lot of capital,” he said. “We were 14 months away after we ran out of money.”
It was a wake-up call. Hamal had to cut costs significantly. This meant a major layoff. It was very painful, he said, he vowed to do things differently. “We tried to extend the runway and drive the company towards cash flow damage.
In 2025, VC money is flowing again, especially for AI startups, but “we're not raising another round,” he said. reason? He now believes VC Money has its own price tag.
“The more capital you raise, the higher your expectations, the more you give up control of the company, the more pressure you put in to hire people who don't do well,” he said.
“For venture capital, growth is what matters,” he said. For some investors, revenue growth is important than improving gross profits, he said.
This means that companies can still deepen their reds, even if they sell more. VCS trusts founders to 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 “durable growth” in Security Pal: slow and solid. If sales were always limited to a small number of deployments, his team can ensure that all customers are well onboarded, even in edge cases.
He didn't want customers to use their customers without using their products, not only to get renewal time, but also to sell fast. “That story happens all the time because there is so much pressure on growing companies,” he said.
Meanwhile, he said he discovered that slow ARRs could lead to “healthy gross profits, great cash collection.”
Hamal makes it clear that he is not opposed to venture capital. Other startups may need to keep up and chase fast arr. He has not ruled out another round of SecurityPal. He hopes more founders will think about slower, subtle alternatives.
“I've raised venture capital, and what I'm trying to do is put the business in a position where you don't need it over and over again,” he said.
Listen to the entire conversation on the Equity Podcast. This includes Hamal's suggestions on how to find capital outside of ventures.
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