Raising a Series A right now is brutal. VCs have plenty of capital, but they're deploying it into their existing portfolio or chasing AI deals — not writing checks for a B2B SaaS company growing 50% year-over-year. If you're a post-seed founder whose growth has plateaued, you need to make a hard call: keep swinging for venture-scale outcomes, or pivot to a path where you control your own destiny.
The VC track
You know this one. Raise capital, pour it into growth, target 100-200%+ YoY expansion, and bet that the next round of funding will unlock the channel or product breakthrough that gets you to escape velocity. The endgame is a big acquisition or IPO. It works brilliantly when it works. But it requires genuine hypergrowth, and right now, most post-seed SaaS companies don't have it.
The PE track
Cut burn, get to profitability, and grow at a sustainable 20-50% per year. You stop needing anyone's permission to exist. From there, you have real options: sell to a PE firm, keep running the business and taking distributions, or — if the market turns — go back to raising venture with much better leverage. At TinySeed, we've backed over 200 companies on this exact path, and the ones who get to profitability almost always end up with better outcomes than the ones who kept chasing the next round.
How to decide
Start with your growth numbers — and be honest. If you're not at 100%+ YoY, the VC track is probably closed to you regardless of what you want. We see founders burn six months pitching investors before accepting this. Don't be that founder.
Then look at your runway. Not just "months of cash left," but how many months you'd need to reignite growth, prove it to investors, and actually close a round. That's usually 12-18 months minimum. If you don't have that, the math doesn't work.
Finally, think about what you actually want. The PE path means you stay in control once you're profitable. The VC path means dilution, board seats, and someone else's timeline. Neither is wrong, but we've watched too many founders sleepwalk into the VC track because it felt like the default, only to end up with nothing.
The hard part
Switching to the PE track means cuts. Layoffs, killing marketing spend, dropping the nice office. Nobody enjoys this. But we've seen the alternative play out dozens of times: founders delay the hard decisions, burn through their remaining runway, and end up selling from a position of desperation — or shutting down entirely.
The median tech startup has about 15 months of runway and $500K in reserves. That sounds like a lot until you realize how fast it goes. Every month you wait to make the switch is a month of leverage you'll never get back. Buyers and investors can smell desperation, and they price it in.
What to do right now
Give yourself 2-3 weeks to run the numbers honestly. What's your actual burn? What does growth look like under realistic (not optimistic) assumptions? How much would you need to cut to reach profitability, and how fast? Don't skip this — we've seen founders make this decision on vibes and regret it.
Talk to people who've been through it. Not your VC friends who'll tell you to keep raising — talk to founders who've made the switch, or advisors who work with companies in your ARR range. If you're going PE track, figure out exactly how much runway you need to get profitable and what a good exit looks like at your size.
The fundraising market is rough, but that's not the point. Plenty of SaaS companies in the $2-20M ARR range are building excellent businesses without ever raising another round. The founders who thrive are the ones who pick a lane early and commit to it.
Want to discuss your options? Reach out to einar@discretioncapital.com or schedule a call.