Why Founders Should Skip VCs And Go Straight To LPs

By Hebron Sher

For years, startup founders have treated venture capital like a rite of passage — raise a round, land some splashy headlines, grow fast or die trying. But that playbook is worn out. And it doesn’t work for every company.

The VC model was built to swing for the fences. Which is fine — if you’re building the next Uber. But if you’re building a real business with real customers and real economics, you may find yourself trapped in a system that demands moonshots and punishes discipline.

Here’s the hard truth: most founders don’t need VCs. At least, not out of the gate. In many cases, it’s smarter to go straight to the source — limited partners, family offices, high-net-worth individuals. Skip the middleman. Source the capital. Keep your company.

Here are three reasons to consider this route.

VCs and founders are playing different games

Venture capital runs on a timer. Most funds have seven- to 10-year life cycles. That means VCs need you to exit at a specific time — whether or not it’s the right move for your company. Their incentives are tied to the fund, and to outliner returns, not to your timeline.

This can create a misalignment. You might want to build something durable. They want to 10x their money. That’s not inherently bad — but if you’re not aware of it, you’ll end up chasing someone else’s goals with your company.

Worse, big exits often don’t help founders as much as you think. If you’ve raised multiple rounds at ballooning valuations, even a $100 million exit can leave you with table scraps. Meanwhile, the VCs pull out a solid return and move on.

And let’s be honest: many VCs get theirs regardless. They earn fees whether your company wins or dies. You don’t.

LPs, on the other hand — the pension funds, family offices, and wealthy individuals who actually provide the money — tend to be more patient. When you go straight to them, you’re dealing with people who don’t need a return on a timeline. They’re happy with real value over time.

Too much money too soon might kill you

Everyone wants to raise a big round. It feels like momentum. But overcapitalization is a silent killer. It drives up burn. It forces you to hire too fast. It pushes you into fake growth before you’ve nailed product-market fit.

I’ve seen it happen: smart founders raise $10 million and suddenly feel pressure to act like a $100 million company. They start building teams for scale before they’ve built something people want. That pressure often comes from the boardroom. They lose focus.

If you raise from aligned angels or LPs, you raise what you need. Not what makes a headline.

That’s a better way to build. Lean. Focused. Controlled. When you grow on your own terms, you don’t need the startup hype cycle to validate your worth. Your customers will do that for you.

The past few years proved this. When the market tightened in 2022–2024, the companies that survived weren’t the ones who raised the most — they were the ones who ran tight, found traction and didn’t get addicted to outside capital.

Autonomy is everything

The second you take venture money, your company starts to become a group project. You’ll have new voices in the room, some helpful, some not. And you might still be running the company — but you’re no longer owning it.

Control is more than a board vote. It’s the ability to say no. To take your time. To build the thing you actually believe in.

Take Mailchimp. No VC money. Sold for $12 billion. Founders owned the whole thing. That’s an edge case, sure — but it proves what’s possible when you own your path.

Not every founder wants to blitzscale or IPO. Some want to build a profitable $50 million company that lasts. Some want to exit early and clean. Others want to go the distance. VCs often support one outcome: swing for the fences, or bust. LPs and direct investors? They’re often more flexible.

And let’s not forget: many angels and LPs are former operators themselves. They’ve been in the trenches and might actually have the time — and wisdom — to help you.

Venture capital isn’t evil by any means. It has its place. But it’s a tool — not a requirement. And not all tools are right for all jobs. So if you’re a founder thinking about your next raise, ask yourself: Do I need venture capital, or do I just want the status that comes with it? Can I build the next milestone with less money and more control? Who do I want sitting across the table from me when things get hard?

You may be shocked at what you can do with the right capital partners — especially when they’re not racing to flip your company on someone else’s schedule.

Skip the VC meeting. Call some LPs directly. You might just like the conversation better.

Hebron Sher is the co-founder and CEO of Zevo, a Dallas-based peer-to-peer EV sharing platform founded in 2021. Originally from London, Sher bootstrapped Zevo and later raised capital from a small group of high-net-worth individuals to build a 100% electric, contactless rental experience. His work focuses on making EVs more accessible, monetizable and usable for everyday drivers.

Illustration: Dom Guzman