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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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Dead Equity, Mega Funds & Down Rounds — The Dark Side of Venture

Consumer VC