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By: Janine Kick

How much money should a startup seek to raise in a round of funding? The same question comes up often from first time entrepreneurs.

Ideally, you’d raise enough money to reach profitability, but if you were profitable this early on you might not need the capital! The reality is that most startups do require multiple rounds of funding. So, to answer the question, how much money should you raise, your goal should be to raise enough money to get to your next “fundable” milestone. This is typically somewhere between 18 to 24 months later. While there is enormous variation in the amount of funding any company will raise, here we are discussing Seed rounds clustering around $1M to $4M for first time founders. 

When choosing how much to raise you should consider multiple factors including how much progress the incoming capital will purchase, credibility with investors, and dilution. It’s typical for most founders to face 10-25% dilution per round. In any scenario, the amount you are asking for must be tied to a plan that investors can buy into. A believable plan will buy you the credibility necessary to persuade investors that their money will have an opportunity to grow while invested in your business. 

“We need to achieve milestone X. To get there, we need Y people and we need Z capital. We believe it will take us W months to get there.”  

Presenting your target raise in this manner allows the conversation to naturally turn to your financial model and business plan. You’ll need to demonstrate you correctly modeled your costs but more importantly, that you correctly modeled-out growth in your key metrics. 

Once you build a robust financial model you should know exactly how much capital you’ll need to raise. Your investors will know you did the work and will operate the business responsibly. And hopefully, at that point, be much more likely to write you a check!

Now you know the math, what’s your number? 


Kerosene Ventures – Helping Great Founders Raise Capital