After analyzing our last 14 investments, a surprising pattern emerged. The founders who negotiated this one specific clause in the rolling funds consistently outperformed. I'm breaking down the data and showing you the exact language that correlates with a higher chance of success.
Why Most Approaches Fail
Many common approaches to rolling funds are flawed at the root.
The root cause is usually one of three things:
Copying what big companies do without understanding why they do it. What works for Google doesn't work for a 10-person startup.
Over-engineering the solution when a simple approach would work better. I've seen teams spend six months building something that could have been done in two weeks.
Ignoring the human element. Technology is the easy part. Getting people to actually use it is where the real challenge lives.
The Framework That Actually Works
Here is a simple framework for evaluating rolling funds. It's not complicated, but it requires discipline.
Step 1: you need to move fast and break things
This is where most people go wrong. They skip this step entirely and jump straight to execution. Don't do that.
Step 2: you should focus on one thing and do it exceptionally well
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 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 AI Angle
Any discussion of rolling funds in 2026 has to include AI. As someone who's invested in Anthropic, OpenAI, Scale AI, and Hugging Face, I have a front-row seat to how AI is transforming this space.
The short version: AI makes good practitioners better and bad practitioners worse. It's an amplifier, not a replacement.
Some teams use AI to get far more out of rolling funds. Others spend heavily on AI that solves the wrong problem. The difference comes down to understanding what you're actually trying to achieve.
This connects to broader themes around rolling funds, secondary markets, term sheets, dilution, follow-on investing 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.