How Much Should You Actually Raise?
How to calculate your startup's funding ask based on milestones, runway, use of funds, and the next fundable stage.
- The right raise amount is whatever gets you to your next fundable milestone with a buffer, not a round number that sounds ambitious.
- Raising too little forces a rushed, weak-position raise again soon. Raising too much dilutes founders and can inflate a valuation the next round has to live up to.
- The ask should map directly to specific use-of-funds milestones an investor can evaluate, not a vague "18 months of runway."
- Most credible raise amounts fall out of the same financial model used to build the rest of the investment case, not a separate guess.
"How much should we raise?" often gets answered with a round number that sounds appropriately ambitious for the stage: $500K, $1M, $2M.
But those numbers are often chosen more by convention than calculation.
Investors notice when a raise amount doesn't connect to anything specific. It's one of the faster ways to make an otherwise solid pitch feel unfinished.
Why round numbers are usually the wrong starting point
A raise amount without a clear connection to specific milestones invites an obvious question: why this number and not double it, or half it?
If the answer is "that felt right for our stage," the ask hasn't actually been modeled. It's been guessed.
Investors can usually tell the difference.
Sizing a raise to milestones, not months
The stronger approach starts from the next milestone that would make the company meaningfully more fundable.
That could be a specific revenue threshold, a completed pilot, a defined user base, or another milestone that materially changes the company's investment case.
Then work backward to determine what it actually costs to reach that milestone, plus a reasonable buffer for the unexpected.
That's the same logic behind the runway target in Time Miner's Seed raise. The raise was sized around funding a specific runway period tied to reaching a defined ARR objective, rather than stating a generic "18-24 months" without explaining what happens during that time.
The risk of raising too much or too little
Raising too little creates a predictable problem.
The company can run out of runway before hitting a milestone significant enough to justify the next round on strong terms. That can force founders back into fundraising from a weaker negotiating position.
Raising too much creates a quieter but equally important problem: unnecessary dilution now and potentially a valuation the next round has to grow into.
If growth doesn't keep pace, that creates another kind of pressure.
Signs Your Raise Amount Isn't Grounded
| Ungrounded | Grounded |
|---|---|
| Chosen based on what feels typical for the stage | Derived directly from the financial model and use of funds |
| "18-24 months of runway" | "Runway to reach $X ARR / complete Y pilots" |
| No connection to a specific next milestone | Sized to the cost of reaching a defined, fundable milestone |