Every startup divides equity based on contribution. A technical co-founder might get half the company because they build the product. A business co-founder might get half because they handle distribution, sales, partnerships—the work that actually puts the product in front of customers. Even early employees get meaningful ownership when they take on responsibilities that directly create value.

Equity, in other words, matches contribution.
You give up a piece of your company when someone takes on a core function of it.

Except when you talk to VCs.

VCs often take 10–20% of a startup—sometimes more—while providing exactly one thing: capital. Not product. Not distribution. Not sales. Not execution. Just money.

And don’t get me wrong—capital is important. But it’s not a core function of the business. It’s fuel. Someone else still has to build the engine, drive the car, and figure out where the road even is.

That mismatch is what’s been bothering me.

Why capital alone isn’t enough

Most early-stage startups don’t fail because the product is bad. Most founders today can build an MVP. Technical talent is common. Tooling is good. You can stand up a real SaaS in a few weeks.

The real failure point is distribution.
Getting customers.
Finding channels.
Getting attention.
Creating momentum.

This is the part that kills companies.
This is the part founders struggle with.
This is the part that actually determines whether a startup lives or dies.

Yet this is the one area VCs contribute almost nothing to.

Instead, the typical pattern looks like this:

  • you build an MVP
  • you raise money
  • you get a few warm intros
  • you have some office-hour chats
  • and then… you’re on your own to figure out distribution

Everyone nods along as if this is normal—but step back for a second and it’s odd. Very odd. You give away a meaningful piece of your company, but the hardest, most existential part of the business is still entirely on you.

Imagine giving a technical co-founder 20% and then they did no IC work, no architecture, no infrastructure. They tell you they want to hire engineers and “manage” them, but never actually build anything themselves.

No founder would ever accept that. Yet somehow, that exact arrangement is considered totally normal when the person taking the equity is a VC.

Why put this on VCs?

Because if VCs are going to take founder-level equity at the earliest stage, then the value they provide should match the importance of the function they’re supporting. And in an early-stage startup, nothing determines survival more than distribution. You can raise money, build product, hire engineers—none of it matters if you can’t get customers.

VCs want exponential outcomes. But exponential outcomes only come from one place: distribution. Not product, not meetings, not “warm intros.” Distribution is what decides whether a startup grows or quietly disappears.

So if VCs are going to take double-digit ownership—the kind of ownership normally reserved for someone performing a core function—then the function that makes the most sense for them to specialize in is the one founders struggle with the most, and the one most aligned with their own incentives.

Distribution is the function VCs are most aligned with, yet the one they contribute almost nothing to.

What would it look like if VCs actually helped with distribution?

To be clear, I’m not saying VCs need to hire an army of growth hackers and run everyone’s outbound. That wouldn’t scale. But there are very real, very practical ways VCs could meaningfully contribute to distribution—ways that match the size of the equity they take and the incentives they already have.

For example:

  • Negotiated advertising deals.
    Imagine AWS credits, but for ad networks. A VC with a portfolio of 50–200 companies has real bargaining power. They could negotiate discounted rates or matched spend with TikTok, Meta, Google, Reddit, even niche B2B networks. That alone could extend runway and dramatically lower CAC.

  • A real content and backlink engine.
    Many VCs already produce content, but it’s surface-level thought leadership. If a VC spent years building deep, authoritative content in major startup categories, they could plug new companies into that ecosystem instantly. Instant backlinks. Instant domain authority. Instant traffic. This is the exact playbook niche publishers use—it works.

  • Influencer and distribution partnerships.
    VCs love to talk about “networks,” but most of those networks are other founders and other VCs. The people who actually move markets today are creators, analysts, niche operators, and small media brands. A VC could build real relationships here. Not surface-level “follow us on Twitter,” but actual distribution partnerships startups can tap into.

  • Channel expertise.
    Not a generic “growth person,” but someone who’s run tens of millions in spend across a channel and can help a portfolio company avoid burning cash. Someone who can say, “Don’t bother with LinkedIn ads for your product—we already tested that playbook across five other companies.”

  • Shared outbound infrastructure.
    Not running sales for founders, but providing the tools: vetted contact databases, deliverability expertise, email warmup, messaging frameworks, connection automation, ICP research libraries. The unsexy stuff that makes outbound actually work.

None of these ideas require a VC to become an agency. They require a VC to stop thinking of themselves as only capital allocators and start thinking like distribution multipliers. And if a firm provided even a fraction of this, founders would line up around the block to give them their equity.

The distribution gap

The truth is simple: distribution talent is extremely rare. It’s so rare that people don’t even think to talk about it or research it. Successful distribution is basically equal to the success of startups, period. And the term “growth hacker” has been exiled from the industry to the point where it’s almost embarrassing to say out loud. Not marketing, not advice, not frameworks—actual, hands-on distribution:

  • building repeatable outbound
  • cracking niche SEO and driving traffic quickly
  • identifying the real purchase triggers
  • writing messaging that actually converts
  • understanding the sales cycle
  • knowing where your customers actually hang out

Most successful startups end up hacking together their own odd little distribution engine—and it almost never works for anyone else. There’s no template. No playbook. No guaranteed lever.

And don’t tell me funding solves this. You can’t brute-force your way through it with paid inbound. Even with a few million, you won’t make a dent. Your CAC will be too high and you’ll burn through your cash long before you figure out a repeatable channel.

So you hope your founding team has someone good at growth. But if they’ve never done it before, you’re gambling the entire company on them. And realistically? They probably haven’t done it before. Because the people who can do this well usually do it once, get their payday, and never return to full-time roles again.

The supply of real distribution talent is incredibly tiny.

VCs know this, which is why they screen for it— “Who’s your GTM person?”
“Who owns distribution?”
“Who’s driving growth?”

But they don’t provide it.
They simply require founders to already have it.

This is the flaw people don’t talk about:
VCs select for distribution, but they don’t contribute distribution.

And that’s fine—if they were taking a small slice.
But they’re not.
They’re taking founder-sized chunks while providing investor-level value.

A note on TinySeed (they’re closer than most)

I’ll give credit where it’s due.
TinySeed is one of the few funds that actually tries to support go-to-market. They offer:

  • hands-on help with pricing, funnels, and messaging
  • a network of founders solving similar problems
  • structured sessions where growth is treated as a craft
  • people who have actually built and sold SaaS before

It’s the closest thing I’ve seen to “capital + distribution help” in early-stage funding.

But even TinySeed stops at the advisory layer. They don’t run your outbound engine, manage your channels, or plug you into a distribution system. And that’s not a criticism—it just highlights how rare real distribution support is.

The fact that TinySeed stands out so much only proves the point:
founders would jump at a VC that provides real distribution infrastructure, because nobody does.

What a future VC model could look like

The future VC firm—the one that actually deserves the 10–20% it takes—won’t just write a check. It will provide a core function, the same way a co-founder would.

Not advice.
Not vibes.
Not a Slack community.

But actual distribution:

  • outbound engines founders can plug into
  • built-in channels and partnerships
  • tested messaging frameworks
  • early access to real buyers
  • a repeatable playbook that actually works
  • an in-house growth operator who ships, not talks

This is the part of the business founders struggle with.
This is the part of the business VCs don’t help with.
This is the part of the business that determines success.

It’s strange that no one has built this yet.
It seems almost embarrassingly obvious once you say it out loud.

Until then…

Founders will keep doing what they’ve always done: build a product, raise money, then hope they can figure out distribution before the runway runs out.

VCs will continue taking meaningful equity stakes while contributing far less than any other person or function that earns a similar percentage.

And the hardest part of starting a company—the one thing that determines whether any of it works—will remain the one thing founders are left to solve entirely alone.

Maybe someday that changes. But for now, it’s the gap no one seems eager to fill.