Raise money

How much money should I actually raise in my first round?

The short answer

Raise 18 to 24 months of runway to hit the next real milestone, not the biggest number you can get. Over-raising sets a valuation you then have to grow into, dilutes you before you have leverage, and tempts you to spend on things that do not move the needle. Size the round backwards from one clear milestone (a revenue number, a product proof, a growth rate) plus buffer, then add nothing for vanity.

Go deeper, your way

2 hand-picked resources, 2 link-checked. Pick how you want to dig in.

📄 Article
✓ Link checked Free Intermediate

Why we picked it The most quoted essay on the mechanics of fundraising, distilled from YC Demo Day advice. It reframes fundraising as a sales process with clear rules that still hold up years later.

How to Raise Money

From paulgraham.com by Paul Graham 45 min read

  • Be in fundraising mode or not; don't half-do it while running the company
  • Talk to investors in parallel to create real competition and momentum
  • A 'maybe' is usually a polite no; get to a real yes or move on
Open paulgraham.com →
📄 Article
✓ Link checked India Free Beginner

Why we picked it The Indian mirror to the answer: Kamath built Zerodha to India's largest broker taking zero outside capital, and he is precise about why. Money brings an obligation to manufacture returns, and the reflex to keep raising to lift valuations pushes founders to optimize growth over profit and customer. Read it as the discipline case: every rupee you do not raise is leverage and a decision you never have to defend to an investor, which is exactly why you size to one real milestone instead of grabbing the biggest round.

I wonder why there are only a few businesses like us, built to generate profits and not raise venture capital: Nithin Kamath

From Forbes India by Nithin Kamath (interviewed) 12 min read

  • Raised money carries an obligation to produce investor returns that reshapes your decisions, so raise only what a real milestone needs
  • Chasing bigger rounds to lift valuation trades away profit focus and customer focus, the eChai edge case for restraint in India
  • You can reach real scale in India without the raise-again-every-few-months treadmill; runway discipline beats round size
Open forbesindia.com →

Terms in this answer

Runway

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