Round Size
In the fundraising process, a common question from investors is around the target round size and the underlying thinking behind that. The response to this question is often reflective of the precision and rigor in how a given user is approaching critical questions around the business.
In order to determine how much to raise, users first need to answer a set of key questions:
| Question | How to Answer |
|---|---|
| With this financing, what objectives does the Company need to achieve? | Determine what the Company needs to qualify for the round after this one. And then build your objectives around that. |
| What resources does the Company need to achieve the said objectives? | How many engineers and/or full-time teammates are needed to achieve the said objective? |
Thoughtful answers to the above questions need to drive perspectives on how much to raise. Each business is unique and founders need to answer the above questions for their specific business.
Users that develop a precise and rigorous perspective on how much to raise will also be able to demonstrate that in fundraising discussions.
A common mistake is to try to raise as much as possible, or to set a raise target based on whatever is the norm for that round.