Should You Raise Venture Capital?

👋 Hi my name is Roslyn, I’m a founder and executive coach. I help purpose-led founders scale their impact without burning out. Learn about working 1:1 here.

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Hi there,

This is the very first edition of the second iteration of the Within newsletter!

As a reminder, each month, I’ll be going deep on one startup topic. 

I’ll be sharing both the strategic/tactical advice (the outer work) and the personal development guidance (the inner work) to navigate this topic successfully and in a way that feels good.

May is all about fundraising. 

Should you raise capital? How do you run a fundraising process? How do you hold your vision steady while also dealing with the sting of no’s? How can your nervous system support you?

The first two newsletters of this month are going to handle the outer work of fundraising, and the second two are going to cover the inner work. 

Today’s newsletter is all about:

• Whether you should seek external funding for your company

• The pros & cons and questions to consider around raising venture capital

• The non-VC funding options available to you

• How we approached funding at The GIST (my last startup)

By the way, since this is a new format, I highly appreciate your feedback. Reply to this email or let me know in the poll at the bottom. I read and respond to everything.

Okay, let’s dive in.

Where we go deep on the outer work or the inner work of building a startup.

SHOULD I FUNDRAISE OR NOT?

While the media makes it seem like fundraising is a prerequisite to startup success, in reality only about 5 in 10,000 startups receive venture funding (less than 0.05%). 

In startup culture, we’ve come to view raising capital as the goal we’re working towards. But really, building a profitable, lasting business should be our goal, with fundraising merely as a tool to support it.

What most people don’t realize is that many startups are actually a much better fit for bootstrapping or choosing an alternative funding source to venture capital. 

In the earlier days of The GIST (my last startup), we went back and forth on whether we felt we were a true fit for venture capital (and also received many no’s from VC’s early on!). As a result, we used many alternative sources of funding (grants, accelerators, angel investors, debt) in order to fund our growth while keeping our options open and maintaining more control of our company.

It’s a deeply personal decision that depends on your needs, preferences, long-term goals, desired speed and the kind of company you’re building. 

We’ll start by talking about what Venture Capitalists (VC’s) are looking for in companies to help you decide if it’s the right path or not for you. We’ll cover the pros and cons, and alternative funding options. And I’ll share in more detail what our earlier fundraising path was at The GIST.

WHAT VC’S ARE LOOKING FOR

VC’s are typically looking for companies with high growth potential and a clear path to significant returns. 

More specifically…

 1. Massive Market Potential

• TAM (Total Addressable Market) usually in the billions

• Scalable across geographies or sectors

2. Scalability

• A business model that scales quickly and efficiently with tech or automation

• High gross margins and low marginal costs

3. Traction

• Early revenue, fast-growing user base, or strong engagement metrics

• Proof of demand (waitlists, paid pilots, viral growth)

4. Compelling Team

• Founders with domain expertise (or founder-market fit) and an ability to execute

• Ideally a technical cofounder or product-savvy team

5. Clear Exit Potential

• Acquirable or IPO-able

• Operating in a space with past VC wins or recent M&A activity

If this isn’t you (or you don’t know yet if this is the type of company you want to build), that’s completely fine. In many cases, you’re actually better off delaying outside funding as long as possible anyways. The longer you build independently, the more equity and control you retain. 

Some of the strongest companies are the ones that prove they can thrive without venture capital because it forces them to get creative and solve problems that having extra capital can sometimes cover up. 

And consequently, the more you build a thriving, profitable business that doesn’t need funding but merely wants it to accelerate what’s already going well, the better position you’ll be in to get demand from investors and obtain favorable investment terms.

If you’re not 100% certain VC is right for you at this moment, but your business would benefit from some additional capital, there are lots of alternatives to VC available to you, which we’ll get into shortly. 

For now, let’s talk about some of the tradeoffs of raising VC.

PROS & CONS OF VC, FOR PURPOSE-LED FOUNDERS

In my opinion, some of the cons can be mitigated by finding investors that are truly a good fit for you and believe in your vision. This requires open and upfront conversations in the fundraising process, understanding how they work with and support founders and talking to other founders in their portfolio, especially the ones that aren’t the star companies of the portfolio. It’s also really important to listen to your intuition when deciding on investors.

If you’re unsure, check out the reflection questions in the next section — try journaling on these to help you get some clarity on what truly feels aligned for you.

TYPES OF FUNDING AVAILABLE TO YOU

If you don’t feel VC is for you (either at this stage or ever), there are plenty of other options available! While they might not come with the flashy news headlines, they may be a much better fit for your goals. 

For some, it can make sense to start with one of these alternative options and over time you may get more clarity on whether or not you’re building a VC-backable business (or if you want to). If you think you might be, you can use the alternative funding to fund finding product-market fit, early traction and the proof points you’d need to raise VC.

NON-VC FUNDING OPTIONS

1. Bootstrapping

• Build with your own funds, reinvest revenue in business growth

• ✅ Total control, no dilution

• ⚠️ Slower growth, high personal financial risk

2. Friends & Family

• Early seed money from people who believe in you

• ✅ Lower pressure, early support from your network

• ⚠️ Risk of strained relationships if things go south

3. Accelerators & Incubators

• Programs like Y Combinator, Techstars, Antler, Entrepreneur First, and 500 Startups

• ✅ Small investment + mentorship + visibility + community

• ⚠️ Competitive, and equity is often exchanged for a small check

4. Grants & Competitions

• Non-dilutive capital from governments, foundations, or pitch contests

• ✅ Free money + recognition

• ⚠️ Time-consuming applications, often restricted by eligibility or purpose

5. Crowdfunding

• Platforms like Kickstarter, Indiegogo, or equity-based ones like Wefunder

• ✅ Builds community and validates demand

• ⚠️ Requires strong marketing effort and fulfillment logistics

6. Revenue-Based Financing

• Repay a percentage of monthly revenue until a cap is hit (e.g. Clearco)

• ✅ No equity dilution, flexible repayment tied to growth

• ⚠️ Not ideal for early-stage or pre-revenue businesses

7. Angel Investors

• Wealthy individuals who invest before or alongside VC

• ✅ More flexible and aligned than institutional VCs

• ⚠️ Still involves equity dilution and expectation of returns

8. Loans & Debt Financing

• Traditional bank loans, SBA loans, lines of credit, or venture debt

• ✅ No equity loss; good for businesses with predictable cash flow

• ⚠️ Requires personal or business credit, and you’re on the hook for repayment—regardless of success

MY EXPERIENCE WITH STARTUP FUNDING

When I was co-leading The GIST, we were pretty scrappy with funding because we weren’t sure if we wanted to go the VC route. As a result we used most of the above funding sources (with the exception of revenue-based financing and crowd-funding).

In our earliest days, we did pitch competitions, raised with friends, family & angel investors and took part in a few different incubators and accelerators, including Techstars. At that point our media audience was in the <10,000 range, but the engagement and excitement for the brand was strong, we had a lot of conviction around the problem we were solving and the growth of the space we were in.

We didn’t feel we were fully a fit for institutional VC (or maybe it was that they didn’t think we were a fit for them — we did pitch some and got lots of no’s!). We were also conservative about wanting to maintain control of our company, especially as a mission-driven business, so we relied on angel investors to raise some early capital (about $400k before heading into Techstars, another $120k from Techstars, and then we raised an additional ~$200k coming out of the program from additional angels).

This was incredibly helpful for us because we were pre-revenue at that point and needed to build out an audience to a certain size in order to be able to start monetizing it with brands. So those early funding sources allowed us to build out our offering, hire an early team (and eventually start paying ourselves!), and grow our audience. 

Once we grew our audience and were able to start monetizing it at a 5-figure monthly revenue, we were then able to raise a $1M equity round (about a year later), again with mainly angel investors (including repeat investors from the earlier round). At this point, we also took on a $300k loan from a bank (the BDC, a bank that supports innovation and technology in Canada) to supplement the raise. (Often banks, especially venture banks, are willing to fund companies at the same time or right after they raise an equity round.)

We applied for government grants that specifically fund innovation (again in Canada — with the National Research Council) which covered technical salaries and expenses related to building custom, unique technology for The GIST. We also found grants in Canada that funded wages for interns. Grants can be a bit of a pain to apply and maintain reporting for, but since they’re non-dilutive, it can absolutely be worth the time.

Finally, we received an additional $500k as part of our participation in a women in sports accelerator called Trailblazer, which was backed by Billie Jean King Enterprises, RGA and a venture firm — this was our only true institutional venture capital check and it wasn’t a big one.

I share my personal experience to illustrate that there’s no one right way to fund your startup. Everyone will have a different path based on their needs, preferences, timing and the type of company they're building. Know what your options are, talk to other founders about their experiences, and listen to your intuition. 

I’m curious about your startup funding experience.

Questions to consider on whether venture capital backing is right for you:

1. 🧭 Is my mission compatible with hypergrowth?

• Will scaling fast amplify my impact or compromise it?

• VCs want rapid, exponential growth. If growth would force shortcuts that undermine your mission or values (e.g., ethics, sustainability, inclusion), that’s a red flag.

2. 🤝 Do I want to share decision-making with investors?

• Am I ready to share decision-making power with investors who may not share my priorities?

• VCs become part-owners and often board members. Even supportive ones have a say—and their north star is ROI, not always your purpose.

3. 🧨 Am I building a VC-backable business model?

• Does my business have the potential to return 10x+?

• VCs fund models that can dominate markets. If your venture has a steady impact but more moderate returns, alternative funding may be a better fit.

4. 🌱 What’s my definition of success?

• Do I want to build to exit or build to last?

• VCs typically expect a liquidity event (sale or IPO) within 5–10 years. If your dream is long-term sustainability, VC might conflict with your timeline.

5. 💡 What would I do differently if I didn’t need to raise money?

• Could I test, grow, or monetize in a way that keeps me aligned and in control?

• Sometimes the assumption that funding = progress blocks creativity. Removing that pressure can spark more authentic, sustainable growth strategies.

• 1:1 Coaching: If you’d like support with building a remarkable company without sacrificing yourself, let’s chat. You can book a free strategic coaching consultation.

• Let’s be friends: If you want to see the BTS of building Within and receive more tips and ideas on building with integrity, connect with me on LinkedIn and Instagram.

• I’m hosting a free online event about the inner work of fundraising on May 28th. We’ll talk about how to stay confident, grounded, and energetically aligned—no matter how many no’s you hear. Reserve your spot (limited space).

Finally, tell me how you liked this newsletter below. I read every piece of feedback.

Thanks for rocking with me as I evolve the Within newsletter.

With love,
Roslyn 💚