Why Saying YES to Your Investors Could Make Your Next Round HARDER

I once had a founder tell me, “Our investors want to fund us again. This is great, right?”

Well... maybe. But maybe not. An in-house round sounds easy—but it can set you up for failure.

If you think you’re getting an easy win, think again.

There’s a hidden downside, and if you don’t play this right, your next round could be way harder to raise.

Most founders are skeptical, but don’t realize what they really need to do:

When investors are begging to fill this round, start thinking about the next one.

Listen, this is a gift horse and we’re not gonna look it in the mouth.

At first glance, this feels like a no-brainer.

Your existing investors know you. They trust you. They want in.

So why stop & think? Because...

• It can send the wrong signal. If external investors see you relying only on insiders, they might wonder, Why aren’t new investors interested?
• You might be underpricing yourself (!). Your existing investors already own a piece of your company—will they give you the best terms?
• It could make your next raise harder (!!!). If you don’t expand your investor base now, will your next round look riskier?
• You may be locking yourself into future limitations. Are you deepening your capital pool—or making yourself dependent on the same small group?

But we are going to cover what you’ve gotta do when your investors want to fill their boots.

Step 0: Ask why.

So many founders get blinded by the money, that they forget to ask the most important questions:

• Why do you want to take this round?
• Would you be able to follow-on?

It’s wonderful to have a supportive investor, but you need to get to the bottom of their motivations first.

Step 1: Act like this round isn’t happening.

I get it—your investors are saying all the right things. They’re excited. They’re “in.” But until the money is wired, it’s not real.

• Keep networking. Keep pitching. Keep building relationships with new investors.
• Do a gut check: If this round didn’t happen, do you still have a strong funding strategy?
• Never assume verbal commitments = real money. Investors can (and do) change their minds.

The worst thing you can do?

Stop looking for outside capital just because your existing investors seem eager.

Step 2: Expand your capital pool now

You don’t just need money—you need strategic money. Your existing investors got you this far, but who do you need for the next phase?

• Identify who can open the next set of doors. Which investors have the networks and expertise you need for your next stage of growth?
• Leverage warm intros. If your current investors are confident, ask them to introduce you to external investors.
• Think beyond VC. Strategic angels, corporate investors, and alternative funding sources could all be better options.

The stronger your investor pipeline, the more negotiating power you have.

Don’t limit yourself just because the “easy” money is there.

Ask yourself:

Would it be smarter to bring in another investor? Would we get access to another pool of capital that could be useful for next round?

Step 3: Ask the hard question—will this make my next round harder?

It’s easy to focus on today. But how will this round affect your next one?

• Will new investors be skeptical? If you only raise from existing investors, will outsiders see that as a red flag?
• Will you be undervaluing your company? Are your insiders investing because they truly believe, or because they see a discount?
• Will this make your cap table less attractive? Are you giving up too much equity in a way that could hurt you later?

A great investor round isn’t just about raising money—it’s about setting yourself up for future success.

Don’t trade short-term ease for long-term difficulty.

One founder I know had to turn down a $50M offer, because it was from a strategic that would limit the company’s exit options…

…to only that investor.

Be careful.

Step 4: Casually shop around - but not too much

But most founders really mess this part up: even though they have deal heat, they phone it in, and end up

Don’t get lazy just because money is on the table

An in-house round can work—but only if you approach it strategically.

Treat it like any other raise.

Explore your options. Casually shop around - but not too much.

Approach it professionally, and prep your materials as if you’re going out to a totally new cohort.

And remember:

The deal’s never done until the money’s in the bank.

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