How much should a startup raise?
Work backwards from milestones and runway instead of picking a round size that sounds right.
Start from the next milestone
A round should fund the company to a point where it is clearly worth more: a launch, a revenue level, a retention figure. Write that milestone down first, with a date.
Then list everything it costs to get there month by month: salaries, tools, marketing, legal and one-off equipment.
Add runway buffer
Fundraising takes longer than planned. Most founders add 6 months of buffer on top of the milestone date so they are not raising again under pressure.
The amount to raise is the cumulative cash shortfall up to the milestone plus that buffer.
Separate OPEX and CAPEX
Investors want to know how money is used. Operating costs (people, software) recur; capital costs (hardware, build-outs) are one-off. Showing them separately makes the ask easier to defend.
Sanity-check dilution
Divide the raise by the post-money valuation to see what share you give up. Early rounds commonly land between 10% and 25%. If your number is far outside that, revisit either the amount or the valuation evidence.
This guide is general information, not financial or legal advice.