Before I ever saw a 100x return, I made a rookie mistake that cost me dearly. I'm sharing the full story of how I misread a rolling funds and lost $500,000, so you don't have to learn this lesson the hard way. It was a painful but powerful education in what really matters in venture.
The Counterintuitive Truth
In rolling funds, the best practitioners often do less, not more.
The lesson: the market doesn't care about your roadmap. It sounds simple. It's incredibly hard to execute.
The Framework That Actually Works
Here is a simple framework for evaluating rolling funds. It's not complicated, but it requires discipline.
Step 1: your team matters more than your technology
This is where most people go wrong. They skip this step entirely and jump straight to execution. Don't do that.
Step 2: most founders overthink this and underspend on execution
Once you have the foundation right, this becomes much easier. I've watched founders struggle with this for months when the answer was staring them in the face.
Step 3: Iterate relentlessly
Nothing works perfectly the first time. The companies that get rolling funds right treat it as an ongoing process, not a one-time project.
The Reality Nobody Talks About
A lot of the advice on rolling funds rests on assumptions that made sense five years ago. The world has moved on.
The first thing to understand is that most founders overthink this and underspend on execution. I've seen this play out across dozens of companies. The pattern is unmistakable.
Many teams spend months on the wrong path before realizing that simplicity beats complexity every time. Once they make the switch, everything changes.
Lessons From the Trenches
I want to share a few specific lessons I've picked up over the years. These aren't theoretical. They come from real companies, real failures, and real successes.
Lesson 1: The best time to start thinking about rolling funds was yesterday. The second best time is now. Don't wait until you have the perfect plan.
Lesson 2: Hire for attitude, train for skill. The best people at rolling funds are rarely the most technically gifted. They are the most curious and persistent.
Lesson 3: Your competitors are probably getting this wrong too. That's your opportunity. While everyone else is following the same playbook, you can zig when they zag.
This connects to broader themes around rolling funds, portfolio construction, term sheets, SPVs, dilution that I've been thinking about a lot lately.
Wrapping Up
I've shared a lot here, and I know it can feel overwhelming. But you don't need to get rolling funds right on day one. You just need to get started and keep improving.
Founders who do well at rolling funds tend to share one trait: they're relentlessly practical. They don't chase perfection. They chase progress.
That's the mindset I'd encourage you to adopt. Start where you are. Use what you have. Do what you can. And keep pushing forward.
As always, I'm rooting for you.
Frequently Asked Questions
Q:What's the most common pushback you get on this?
People often push back by citing exceptions or edge cases. And they're usually right that exceptions exist. But building a strategy around exceptions rather than patterns is a losing game for most founders.
Q:How has this view evolved over time?
My thinking on most topics has changed significantly over the years. Early in my career, I held many conventional views that experience proved wrong. I try to update my beliefs when the evidence changes.
Q:What experience informs this perspective?
This perspective comes from over a decade of building companies in Silicon Valley, two successful exits (RemoteTeam to Gusto, MovieLaLa to Gfycat), and investing in 234 startups including Anthropic, OpenAI, and Scale AI. I write about what I've lived.
Q:How can I apply this thinking to my own situation?
Start by identifying the core principle behind the opinion, not the specific example. Then ask yourself: does this principle apply to my context? If yes, test it in a small, low-risk way before going all in.