The Day You Raised Capital Was the Day You Sold Your Company

Last week, during a HyperscaleCEO Masters session in New York, we found ourselves in one of those conversations that tends to linger long after you’ve headed for the airport. The group were reflecting openly on the long journey of building a company, the highs, the lows and everything in between. What stood out wasn’t regret about the work or the ambition. It was a shared realization of how, almost imperceptibly over time, control had slipped away. Not through any single dramatic decision, but through the steady accumulation of capital, quietly reshaping their autonomy and influence round by round.

This story is not unusual. In fact, it is far more common than most founders are willing to admit publicly, which is precisely why this conversation matters.

Founders naturally put enormous energy into product, customers, hiring and growth in the early days, but very few put the same level of thought into how they actually want their company to be structured and run over the long term. Governance, ownership, control and end-game thinking are often postponed with the belief that they can be “sorted out later.” The problem is that “later” usually arrives when momentum is high, expectations are set and options are already constrained.

The uncomfortable truth is that founders don’t usually lose control of their companies in the middle of the journey: They give much of it away at the beginning, often without fully understanding the consequences.

From my 20 years as a CEO coach it's clear that early decisions around funding, board composition, voting rights, growth pace and investor expectations are not temporary. They compound, shaping the company’s trajectory in ways that are extremely difficult to unwind years down the line. What feels like a small compromise at seed or Series A can become a defining limitation a decade later.

One of the most powerful moments in our New York discussion was when we explored the idea that every company journey has an ending, whether founders like to acknowledge it or not. The moment a CEO takes their first meaningful tranche of external capital, there is an implicit agreement that a transaction will occur at some point in the future to return that capital, ideally with a substantial multiple. In a very real sense, you as a Founder have already sold your company. The only open questions are when, how, and on whose terms.

This is not an argument against raising capital. Capital can be an extraordinary accelerant. It can realize ambition, attract talent and allow companies to tackle problems at a scale that would otherwise be impossible. But capital is not neutral. It comes with expectations, timelines and pressure that are entirely rational from an investor’s perspective, but are deeply personal and complicated from a founder’s point of view.

Where founders often struggle is in the emotional gap between these two realities. On the one hand, they understand intellectually that investors expect an exit. On the other hand, they become increasingly attached to the company as their identity, their life’s work and their sense of purpose as I have discussed in previous articles. Over time, as dilution increases and boards become more entrenched, founder control erodes. Wanting to hold on indefinitely in those circumstances is human and understandable. 

It is also, in most cases, unrealistic.

Boards do not become difficult by accident. They behave precisely as they were designed to behave. Funding structures do not become restrictive by surprise. They play out the logic embedded in the original agreements. The pain many founders feel years later is rarely the result of bad intent. It is far more often the result of early decisions made under pressure, optimism or incomplete understanding.

This is why thinking about the end at the beginning is not pessimistic. It is responsible. Good founders don’t just design products and strategies; they design journeys. They think carefully about what success actually means for them personally, not just financially or reputationally. They ask themselves how much control they truly want, how they feel about external accountability and what kind of role they want to be playing five, ten, or fifteen years down the line.

If founders don’t define the ending, the capital will. And when that happens, frustration is almost inevitable.

The purpose of conversations like the one we had in New York is not to judge past decisions. It is to help the next generation of founders make more conscious ones. To think earlier. To design with intent. And to recognise that how you choose to structure and fund your company in the first chapter will shape far more of the story than most people realise.

In my next article we will discuss how as a founder you can design a company that preserves optionality, leverage and humanity especially in an AI-enabled world. Photo by Anne Nygård on Unsplash