This document discusses factors to consider when determining how much funding to raise for a startup. It recommends calculating needs based on milestones and assumptions, and either raising just what is needed close to need, or raising more than needed well in advance. Timing is important to plan. It also suggests defining milestones like product beta, customers, and 18 months of runway. Non-financial proofs like metrics, customers, and execution should be evaluated along with financial projections.

1. HOW MUCH DO
YOU NEED
• RUN THE NUMBERS
• BUILD ASSUMPTIONS
• ASSES THE DEPENDENCES
• DEFINE THE MILESTONES
WHAT SHOULD YOU
RAISE
• STRATEGY #1 DILUTION
SENSITIVE RISK TOLERANCE
RAISE JUST WHAT YOU NEED
JUST BEFORE YOU NEED IT
• STRATEGY #2 DILUTION
INSENSITIVE RISK
INTOLERANT
RAISE MORE THAN YOU NEED
WELL BEFORE YOU NEED
…AND MANY POINTS IN
BETWEEN
EITHER WAY
TIMING IS EVERYTHING TO
PLAN
HOW MUCH DO
YOU WANT
• ENOUGH TO MAKE
BUILD REAL VALUE
• DEFINE THE MILESTONES
• KEY HIRES
• PRODUCT BETA, SHIP
• FIRST CUSTOMERS
• CHANNEL PARTNERS
• 18 MONTHS OF RUNWAY
DONT JUST
VALUE-EVALUATE
• PROOFS: METRICS,
MILESTONES
• CUSTOMERS
PARTNERS, GTM,
PRODUCT, BM
• ALLOW FOR UNKNOWS,
TIME TO FUNDRAISE
FACTORS
PREDICTABILITY OF YOUR
BUSINESS
YOUR EXECUTION
MARKET ADOPTION
CASH FLOWS
POTENTIAL OUTCOME
COMPETITORS BALANCE
SHEET
VALUATION
ULTIMATE EXIT
POTENTIAL
POTENTIAL ACQUIRERS
THEIR MOTIVATIONS
RECENT TRANSACTIONS
INDEPENDENT BEYODND IPO
COMPARABLE VALUATIONS
MORE IMPORTANT
THAN SPREADSHEET
INVESTORS
TERMS
• OWNERSHIP
• GOVERNANCE
• DILUTION
• EXITS
A
VALUATION
METHODS
• DCF
• .
• .
• .
• .
• .
A
ADVANCED/DETAILED PROCESS
EXIT STRATEGIES
A
INTANGIBLE
VALUATION
STARTUPS
VALUATION
• .
• .
• .
• .
• .
• .
A
FINANCING GROWTH
• SOURCES
• RISK
• COST
• REQUIREMENTS
RAISING DECISIONS
• TYPE OF VCS
• OWNERSHIP AFTER THE
FUNDING ROUND
• TIMING OF FUNDING
• (NEW)EXIT STRATEGY
THE FUND
• COMMITMENT
• PORTFOLIO
• SIZE
• TYPE &
STRUCTURE
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