How Much Should You Raise in a Funding Round?
Size a funding round from your plan: monthly burn, months to the next milestone, plus a buffer for delays. Then check what that amount means for ownership and for what investors expect you to achieve.
- Core formula
- Monthly net burn x months to the next milestone, plus a buffer
- Typical buffer
- Several extra months of runway, because plans slip
- Start from
- A financial model, not a round number
15+ years in finance: 100+ financial models built, €40m+ raised for clients, Forbes contributor and lecturer.
Short answer: raise enough to reach your next clear milestone, plus a buffer for delays. Work it out from your financial model, then test the result against what you are willing to give up and what investors will expect from you afterwards. This is general information, not investment advice.
Start from the milestone, not the amount
Investors fund progress. Before you decide on a figure, define what the money must achieve: for example a revenue level, proof of healthy unit economics, a product launch in a new market or reaching break-even. Choose one or two milestones, not ten. The milestone tells you how long the money has to last.
A simple way to size the round
Amount to raise = monthly net burn x months to the milestone + buffer
Net burn is the cash you lose each month after your revenue. An illustrative example with round numbers: net burn is 50,000 a month, the milestone is expected in 15 months, and you want a 6-month buffer. That is 50,000 x 21 = 1,050,000.
| Item | Illustrative value |
|---|---|
| Monthly net burn | 50,000 |
| Months to milestone | 15 |
| Buffer months | 6 |
| Amount to raise | 1,050,000 |
Burn rarely stays flat. If you plan to hire or spend more on marketing, build a month-by-month forecast instead of multiplying one number. Our guide to startup runway shows how to calculate it, and the free runway and burn tool helps you check the result.
Why the buffer matters
Fundraising takes time, often longer than founders expect. Sales cycles stretch, launches slip and customers pay late. If you start the next raise with only a few months of cash left, you negotiate from a weak position. A buffer buys you the time to say no to a bad offer.
Check the other side: what you give up
Every round changes your ownership. Before you commit to an amount, model what the round means for your share and for the next round. A larger raise brings more money but also more dilution and usually higher expectations on growth. Smaller and sufficient is often better than larger and demanding.
What investors will want to see
You will need to show how you arrived at the number. Be ready with:
- A financial model with clear assumptions
- A use-of-funds breakdown by area and by month
- The milestone and the timeline to reach it
- A view of what happens if results come in lower than planned
Our article on getting investor ready covers what to prepare before the first meeting.
Common mistakes
- Picking a round number first and building the plan afterwards
- Forgetting that burn grows after the money arrives
- Raising for 12 months and having to raise again at month 8
- Not linking the amount to a milestone
- Ignoring cash timing, such as late customer payments (see profit vs cash flow)
What to do this week
Open your model and answer three questions: what is the next milestone, in which month will we reach it on the current plan, and how much cash do we need until then? If you cannot answer them from a model, that is the first thing to fix.
Book a CFO diagnostic call - 30 minutes, no pitch, a real CFO.
Related questions
Is there a standard amount to raise?
No. The right amount depends on your burn, your plan and the milestone you need to reach before the next round or before you become self-funding. Round numbers copied from other companies are a poor guide.
Should I raise as much as investors will give me?
Not automatically. More money usually means more dilution and higher expectations. Raise what your plan needs, with a sensible buffer, and be able to explain how every part of it will be used.
What is a milestone in this context?
A concrete result that makes the next stage of funding easier or unnecessary, such as a revenue level, a profitable unit economics proof, a product launch, or reaching break-even.
