How to Build a Capital Stack That Gives Your Startup More Control

For most of the last decade, “financing strategy” for a startup meant one thing: Raise the next round on schedule, at a higher price, from a recognizable name. That approach worked when capital was free and every fund needed to deploy.

It doesn’t work now, and founders who are still building around a single fundraise as the entire plan are exposed in a way they may not realize yet.

What actually broke

Venture didn’t just get slower. It got structurally different, and the causes are worth naming plainly because they explain what to do next.

Rates did the first damage. Global VC fundraising fell to just under $70 billion in 2023, a 60% drop from the prior year and the lowest total since 2015. Every model that justified a 40x revenue multiple on an unprofitable company was built on a near-zero cost of capital. When that cost went to 5%, the multiple went with it, and so did the pace of new unicorns, most of which were already valued at 2020-2022 peak prices and hadn’t grown into them.

Second, VCs themselves got stuck. Funds raised in 2021 and 2022 are now four and five years into their life and still haven’t returned money to their own backers. 2021-vintage funds have distributed roughly 8 cents back for every dollar committed, and LP distributions across the industry are running at about 6% of assets versus a historical average near 14%. A partner asking for three extra meetings before writing a check isn’t being difficult for its own sake. Their fund’s own investors are asking why they haven’t seen a return in half a decade.

Third, the exit valve stuck shut for years before easing in 2025, when IPO activity and secondary volume both picked up meaningfully after a prolonged drought. That recovery is real but narrow, and it’s concentrated in a small number of large, late-stage names rather than spread across the market.

Fourth, whatever capital is moving is concentrated at the extreme top end. Mega-rounds, mostly AI, absorb the large majority of dollars in any given quarter, which means everyone outside that lane is competing for a shrinking remainder. Dry powder raised in 2021 and 2022 is aging out and creating pressure on funds to deploy it in 2026, which should loosen things somewhat, but it doesn’t undo the underlying scarcity for companies outside the hottest categories.

None of this means venture is gone. It means venture is one tool, priced correctly for the first time in years, and no longer a default.

The financing stack for 2026

The practical shift is to stop thinking in terms of “the next round” and start thinking in terms of a stack — three sources of capital that each do a different job and that don’t all depend on the same market conditions being favorable at the same time.

Equity still makes sense when you’re buying speed you can’t otherwise afford, entering a market where being first matters more than being cheap or funding R&D with no near-term revenue attached to it. It’s the most expensive capital you’ll ever raise, so it should fund the things that specifically require dilution to work, not general operations.

Debt, venture debt, revenue-based financing or straightforward asset-backed lending works once you have predictable revenue or hard assets to underwrite against. It’s cheaper than equity, doesn’t touch your cap table and forces a discipline that equity doesn’t: You have to actually pay it back, on a schedule, regardless of how the market feels that quarter.

At NewCampus, we’ve used all three levers at different points: venture rounds when we needed to move fast, debt when the economics could carry the interest payment without giving up another point of ownership and a deliberate push toward profitability so that neither of the first two was ever the only option left on the table.

Profitability, or at minimum a credible path to default-alive status, is the lever that makes the other two optional rather than mandatory. A company that can survive on its own revenue negotiates every financing conversation from a position of choice. A company that runs out of cash in five months negotiates from a position of need, and every term sheet you sign under those conditions will show it.

The bottom line

Start by modeling runway against at least two scenarios, not one: What happens if the round you’re counting on doesn’t close, or closes at half the size? If the honest answer is “the company runs out of money,” that’s the problem to fix before it’s a fundraising problem. From there, get familiar with debt before you need it, since venture debt and revenue-based financing take real underwriting time, and the worst moment to start that relationship is right after equity has fallen through.

Treat profitability, or a credible line of sight to it, as a financing instrument rather than just a milestone. It’s the only source of capital that never says no and never asks for a board seat, and it’s what turns the other two levers into choices instead of emergencies. Diversify who’s writing the check as much as how much they’re writing: A cap table, a debt facility and a revenue line answering to different incentives hold up better than three VCs who all read the market the same way at the same time.

Raise venture capital when it buys you something specific, not because it’s the only playbook you were handed. The founders who do best in 2026 will be the ones treating a term sheet as one option among several, not the plan itself.