Raising funds is often presented as a structuring step in the life of a startup. But if capital injection opens up rapid growth prospects, it also leads to side effects that few founders really anticipate. Dilution of capital, pressure on objectives, loss of control, mental fragility, The cost of the venture capital is also psychological, operational and strategic.
Rarely trivial dilution
During a first round, the founders often yield between 15 and 25 % of their capital. On several successive laps, this dilution can quickly descend under 30 %, or even 20 % at the exit. It is not a problem in itself if the company reaches significant valuation. But when the ambitions do not materialize, the founders find themselves leading a business which they no longer control.
This dilution is not only financial: it also involves increased sharing of decision -making power. A board dominated by investors can redirect the strategy, impose recruitments, or even request the replacement of the CEO. This progressive shift in power often escapes the radar of young founders.
A race imposed against time
The entry of a fund deeply modifies the pace of a business. The objective is no longer the only profitability, but the rapid growth. The model is based on a portfolio logic: the VC accepts that certain startups fail, provided that some explode. For the founder, this means a switch to a logic of “blitzscaling”, with its consequences:
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- rapid increase in payroll,
- opening of sometimes premature markets,
- Structuring of forced march functions,
- Budget arbitrations against stability.
This intensive pace is rarely sustainable over time, especially if the market signals do not follow. The fundraising then becomes a repeated step rather than a springboard, and some founders find themselves “pitching in a loop” instead of consolidating their product or their customer acquisition.
Constant voltage on performance
Behind the invested capital is an explicit expectation: that of a multiple. For funds, an investment only makes sense if it can bring the bet 10 to 100 times. This pressure, even tacit, generates lasting tensions:
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- on strategic choices (growth at all costs vs profitability),
- on recruitments (seniority, packages),
- on governance (quarterly reporting, KPI imposed),
- on temporality (preparation of an exit in 5 to 7 years).
Few founders realize how structural these constraints are. It is not a personal preference, but a logic of funds: each lifting is an accelerated growth pact with scheduled deadline.
A mental charge often kills
Finally, the psychological impact is rarely mentioned. However, stress linked to fundraising often exceeds that of conventional piloting. The fear of “burning the cash” too quickly, the fear of not reaching the Milestones, the isolation of the CEO in the face of a demanding board … as much dimensions that feed the anxiety of the leaders. Several recent studies in the United States and Europe confirm a strong correlation between fundraising and mental health disorders among the founders.
This human cost is rarely integrated into the equation, even though it can question the viability of the project.
Raising funds is a total commitment
Raising funds is not a bad decision. But it is a total commitmentwhich deeply modifies the rules of the game. If for some companies, it is the only possible way, it is not the same for others, for which there are more sober, less dilutive, more progressive paths. The key question is therefore not “Can I get up? »»but “Why get up? »». And above all, “Am I ready to live with the real implications of this choice?” »»
