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Overfunding is as dangerous as underfunding because high valuations set insurmountable hurdles for future fundraising rounds. Companies that raise too much too early often face "indigestion" and collapse when they cannot clear the next valuation bar.

Impact: Founders and VCs enforcing capital discipline and realistic valuation milestones will reduce the risk of down-rounds and preserve company longevity during market corrections.

— from Andreessen on VC Psychology, AI Economics, and Founder Evaluation · a16z Podcast· Mar 30, 2026