How much to raise is driven by: (1) What milestones you need to hit before the next round, (2) Monthly burn rate to achieve those milestones, (3) Buffer for unexpected delays (add 30%). The formula: Raise = (Monthly Burn × Months to Next Milestone) × 1.3 buffer.
Amount to Raise
Raise = Monthly Burn × Months to Milestone × 1.3
18-24 months of runway is standard for each round.
Key Takeaways
- Raise = Burn × Months × 1.3 buffer.
- Target 18-24 months of runway per round.
- Factor in revenue growth to reduce net burn.
- Raising too little is worse than raising too much.