The VC Funding Treadmill

Accepting venture capital can be a powerful accelerator for a startup, but it can also place the company on a "VC funding treadmill." This is a relentless cycle of high-growth expectations and subsequent fundraising rounds that can fundamentally change the nature of the business.

How the Cycle Works:

The Initial Investment: A company takes on VC funding, and with it, the expectation of hyper-growth.
Growth at all Costs: The focus shifts from profitability to rapid growth to justify the valuation and attract the next round of funding. This often involves burning large amounts of cash on sales and marketing.
The Fundraising Loop: As the cash runs out, the CEO's primary job becomes raising the next, larger round of funding (Series A to B, B to C, etc.).
Loss of Control: With each round, the founders' equity is diluted, and a board of directors is often established. The company's destiny is no longer solely in the hands of the founders.

The Downsides:

Distraction from the Core Business: The constant need to fundraise can distract from building the product and serving customers.
Pressure and Burnout: The immense pressure to meet growth targets can lead to a stressful, unsustainable work environment.
Loss of Autonomy: The freedom to run the business as you see fit is exchanged for the obligation to satisfy investor demands. This is the opposite of the state where Profitability is Control.

For founders who value autonomy and sustainable growth, Bootstrapping Forces Efficiency and Customer Focus can be a more attractive path.