Article · 10 min read

The Runway Equation: How Much to Raise and When to Spend It

NYU Entrepreneurial Institute · NYU Entrepreneurship Free Beginner

The cleanest milestone-based runway framework we found: raise for 18 to 24 months because fundraising itself burns about 6 months, leaving 12 to 18 months of pure execution to hit the milestones that earn the next check. Its 'first round is raised on a promise, second round is measured by performance' line is the exact logic your use-of-funds slide has to survive.

  • Budget 6 months to actually close a round, so a 12-month raise leaves almost no execution time; target 18 to 24 months to give milestones room to land
  • Define the specific go or no-go milestones that make the next round fundable before you set the amount, then back into the number from there
  • Your first round is judged on the promise (team and vision) but your next round is judged on whether you deployed capital to hit exactly what you said, so the use-of-funds slide is a commitment, not a wish list
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The question it answers

  1. How do I present my ask and use of funds so it does not sound like a random number?

Read with it

  1. The canonical, no-nonsense overview of how seed fundraising works, written by a former YC president who has seen thousands of... Y Combinator Startup Library Article · 20 min read A Guide to Seed Fundraising Geoff Ralston
  2. This is the sharpest framing of why your ask is really a bet on the next valuation step. It introduces 'accretive milestones'... The Holloway Guide to Raising Venture Capital Article · 15 min read Determining How Much to Raise Holloway (Andy Sparks et al.)
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