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 by David Sacks’s Craft Ventures, with participation from Andreessen Horowitz’s Martin Casado and Okta co-founder Frederic Kerrest.
“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.
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