I’m saying you don’t just change the risk allocation by raising money, you change the risks themselves in a way that may be making your risk as a founder greater, not smaller.
You don’t carry “all” the risk but your risk still goes up.
You don’t carry “all” the risk but your risk still goes up.
There are all sorts of crazy agreements one could think up, but basically if a funding agreement increases your downside risk, it's really not so much about the funding but rather about a fundamental change in the venture. Otherwise, why do it?
Of course you can enter an agreement where you increase the risk of the venture failing significantly. But that's not fundraising, and it's probably not smart, either. And the risk of staying small is sometimes underestimated.
If you enter into a funding agreement where you put in your own money, or a loan you personally guarantee, that would increase your downside risk. But it's also not fundraising, because it's your money.