When to Double Down and When to Walk Away, According to Adrian Vanzyl

Every investor eventually faces the same uncomfortable moment. A portfolio company is struggling, and a follow-on round is on the table. Adrian Vanzyl has sat across that decision many times. He’s done this both as an investor deciding whether to write another check, and as a board member watching a founder fight to keep momentum alive. There’s no formula that makes this decision easy. However, there are patterns worth understanding before the moment arrives.

This isn’t really about picking winners in advance. Instead, it’s about recognizing which signals actually matter once a company is already underway.

Why Sunk Cost Is the Biggest Trap in This Decision

The single most common mistake in follow-on investing is anchoring to money already spent. This happens rather than focusing on the company’s actual prospects going forward. Specifically, an investor who’s already committed significant capital can feel pressure to protect that investment. As a result, they write another check regardless of whether the underlying business has genuinely improved.

This instinct is completely understandable. After all, nobody wants to admit an earlier bet isn’t working. Yet the money already invested is gone either way. The only question that should matter for a new check is simple: does the company, as it exists today, represent a good investment on its own merits? Everything invested before that point is irrelevant to that specific question, even though it rarely feels that way in the moment.

The Difference Between a Struggling Company and a Broken One

Not every company that’s missing targets is in genuine trouble. Some are simply early, or navigating a market that’s taking longer to mature than expected. Others have a fundamentally broken model that no amount of additional capital will fix. In practice, telling these two situations apart is the actual skill here. It’s also far harder than it sounds from the outside.

A struggling-but-viable company usually shows specific signs. The founder understands exactly what isn’t working and has a credible plan to address it. Metrics are moving in the right direction, even if slowly. Notably, the market opportunity hasn’t fundamentally shrunk. A broken company, by contrast, tends to look very different. The founder keeps changing the explanation for underperformance. Metrics stay flat or decline despite repeated pivots. The market itself has moved on entirely.

Why Founder Behavior Under Pressure Reveals More Than Metrics

Metrics matter, but they lag reality. Founder behavior under pressure often reveals what’s actually happening faster than any dashboard can. Consider a founder who gets more transparent as things get harder. That founder shares bad news early and asks for help before it’s requested. This is exactly the trait that predicts recovery.

By contrast, a founder who becomes defensive shows a very different pattern. The same is true of one who starts hiding bad numbers, or blames external factors exclusively. This behavior doesn’t guarantee failure on its own. Even so, it removes a critical ingredient that struggling companies need most. Specifically, it removes an accurate, shared understanding of the actual situation between founder and investor.

The Case for Walking Away Even When It’s Painful

Declining to participate in a follow-on round feels like giving up. This is especially true on a company an investor has believed in for years. In the end, that emotional weight is real, and it shouldn’t be dismissed. Still, continuing to invest capital into a company with a genuinely broken model doesn’t actually help anyone in the long run.

It delays a founder’s ability to face reality and make necessary changes. On top of that, it ties up capital that could go toward companies with a real path forward. In fact, walking away from a struggling investment isn’t a failure of loyalty. Rather, it’s an acknowledgment that continued capital only helps when the underlying business can actually use it productively.

What Adrian Vanzyl Says Doubling Down the Right Way Looks Like

When doubling down does make sense, it should come with more than just money. The investors who add real value during a difficult stretch increase their engagement alongside their capital. They make more introductions, ask harder questions, and show up more frequently, not less.

This pairing matters more than it might first appear. A check without increased engagement signals confidence in the wrong thing. It’s often mistaken for confidence in the founder, when it may really just be confidence in the sunk cost already spent. Real conviction shows up as time and attention, not simply as capital.

What This Means for Investors Facing This Decision

For any investor sitting across from a difficult follow-on decision, the practical discipline is straightforward, even if it’s not comfortable. Evaluate the company as it exists today, not as it existed when the first check was written. Watch founder behavior under pressure as closely as the metrics. And if the decision is to double down, commit real engagement alongside the capital, not capital alone.

That’s the discipline Adrian Vanzyl applies to every difficult follow-on decision, whether the outcome is another check or a hard conversation about walking away. It’s a discipline any investor facing the same crossroads can apply just as well.