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When fundraising stalls, valuations reset, and the cap table gets messy—what really happens next?
In this episode, Mike sits down with Steven Finn, Partner at Siddhi Capital, to break down the tough realities of down rounds, recaps, and cap table engineering. Steven has been in the room when brands shift from celebration to survival—and shares what founders and investors need to know when things don’t go as planned:
✅ Why overcapitalization often leads to a “death spiral”
✅ When to use equity vs. debt—and why both can be predatory
✅ How mega funds create distorted valuations (and walk away fast)
✅ The psychology of “dead equity” and how to reset expectations
✅ Why insiders matter most in distressed situations
✅ How to keep founders aligned (and motivated) during a recap
✅ Why margins = runway, and why that matters more than ever
✅ What smart founders can do early to avoid being wiped out
👉 If you’re a founder, investor, or operator navigating today’s tougher fundraising environment, this episode is essential listening.
Timestamps
00:00 Intro
01:00 Why Fundraising Feels Harder Than Ever
04:50 Fuel on the Fire vs. Finding the Fire
07:00 Debt vs. Equity (and Predatory Capital)
12:00 When Equity Deals Get Ugly
16:30 The Mega Fund Trap & Overcapitalization
23:00 How Huge Rounds Re-Risk Companies
27:00 Recaps, Option Pools & Dead Equity
30:00 Why Venture is Now “Financing Risk First”
34:30 Rethinking Portfolio Strategy
39:50 Are Down Rounds Still a Scarlet Letter?
43:00 Why Margins = Runway
46:00 Selling Distressed Assets (and Why It’s So Hard)
50:00 How Founders Can Protect Themselves Early
53:00 Spotting Coachable vs. Uncoachable Founders
56:00 Growing in Retail Without Growing Too Fast
58:00 Steven’s Book Recommendations
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