Rethinking the Silicon Valley Playbook
In the startup world, a familiar script often unfolds: create an idea, secure venture capital (VC), build sales, raise more VC, and repeat until an exit through an IPO or acquisition. For many, this cycle represents the only way forward. But some founders are beginning to question whether this high-burn model is sustainable.
One such founder is Pukar Hamal, CEO of SecurityPal AI, who took a different approach after nearly running out of money just a year after raising a $21 million Series A in 2021. That round, led by David Sacks’ Craft Ventures, also included backing from Andreessen Horowitz’s Martin Casado and Okta co-founder Frederic Kerrest.
Lessons from a First Startup
On the TechCrunch Equity Podcast, Hamal shared how his first venture—eventually acquired via acqui-hire—raised funding before reaching product-market fit. Looking back, he described that as a critical “mistake.” Determined not to repeat it, he structured SecurityPal differently. The company achieved $1 million in annual recurring revenue (ARR) before raising its first and only funding round.
SecurityPal leverages AI to streamline enterprise security due diligence, a lengthy process in large IT contracts. Its technology reduces review timelines from months to days or even hours, enabling faster deals and cost savings. Today, its customer list includes Airtable, Figma, LangChain, and Grammarly.
The 2022 Wake-Up Call
Despite initial success, 2022 brought new challenges. As interest rates climbed and VC markets cooled, raising additional capital became far more difficult. “We were burning a lot of capital,” Hamal admitted. “We were, like, 14 months away from running out of money.”
To survive, SecurityPal cut costs, including painful layoffs. This moment reshaped Hamal’s strategy. “We extended our runway, and we tried to drive the company towards cash flow break-even, cash flow positive profitability,” he said.
Rethinking Growth vs. Profitability
Even though funding has returned in 2025—particularly for AI startups—Hamal has chosen not to raise again. His reasoning: VC comes with hidden costs. “The more capital we raise, the more expectations there are going to be, the more we’re going to sort of give up control of the company, the more pressure we’re going to feel to just hire a bunch of people that might not work out.”
For venture firms, growth often outweighs margins. This pressure can drive companies deeper into losses, banking on profitability later. If fresh funding dries up, survival becomes uncertain.
Hamal instead emphasizes what he calls “durable growth.” By onboarding fewer customers at a time, SecurityPal ensures strong adoption and renewals. “That story happens all the time because there’s so much pressure on companies to grow,” he said, referring to churn from rushed expansion. By contrast, slow growth supports “healthy gross margins, great cash collection.”
A Balanced View on VC
Hamal isn’t opposed to venture funding. Some startups, depending on their sector and timing, may need multiple rounds to scale effectively. He hasn’t ruled out raising again for SecurityPal. But he wants more founders to weigh sustainable, slower-growth models instead of assuming constant fundraising is the only path.
“I raised venture capital. And I haven’t raised it again because what I’m trying to do is put the business in a position where it doesn’t need venture capital over and over again,” Hamal explained.
Final Thoughts
The Silicon Valley playbook may not suit every company. While VC can accelerate growth, it can also amplify risk and dilute founder control. Hamal’s journey with SecurityPal highlights that profitability-focused strategies can be a viable alternative—especially in uncertain financial climates.
For the full conversation, including Hamal’s thoughts on alternative funding sources, tune in to the Equity Podcast.
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