The short answer
Raise enough to hit the milestones that make your next round or profitability possible, plus the months it takes to raise again and a buffer of roughly 20% to 30%, minus cash on hand. Then check the dilution (raise divided by post-money) and make sure the round can be filled by the check sizes your target investors actually write.
- Start from milestones, convert to months, then multiply by net burn and add a buffer.
- Include the months it takes to raise your next round in the runway.
- Investor ownership is roughly the raise divided by the post-money valuation.
- Raising too little is usually riskier than a few extra points of dilution.
- In Zalarma's data, $50K to $250K is the largest group of pre-seed check sizes, so plan for several checks.
- Pitch one number tied to one plan, and know your minimum for a first close.
The method: milestones, then months, then money
"How much should we raise?" has a practical answer: enough to reach the milestones that make your next round (or profitability) possible, with a buffer for things taking longer than planned. Not the biggest number an investor might say yes to, and not the smallest number that gets you through next quarter.
Work it out in three steps:
- Milestones. What must be true for the next round to be easy? For example: $40K in monthly recurring revenue, a completed clinical pilot with outcome data, a first production run, or 20 paying customers with strong retention.
- Months. How long will it realistically take to hit those milestones? Then add time to raise the next round, since raising takes months too.
- Money. Monthly net burn over that period, plus a buffer.
The formula, with a worked example
Raise = (Monthly net burn × Months to milestones)
+ (Monthly net burn × Months to raise the next round)
+ Buffer (often 20% to 30% of the total)
− Cash you already have
Hypothetical example: a two-founder B2B SaaS company in Columbus plans to hire two engineers and one salesperson.
| Line | Hypothetical number |
|---|---|
| Average monthly net burn after hires | $55,000 |
| Months to hit seed-ready milestones | 15 |
| Months to raise the next round | 4 |
| Subtotal (19 months × $55K) | $1,045,000 |
| Buffer at 20% | $209,000 |
| Cash already in the bank | −$150,000 |
| Target raise | About $1.1M |
Round it to a number that's easy to say and defend: "We're raising $1.1M to reach $40K MRR and a seed round in about 18 months." Every part of that sentence should be backed by your model. The runway calculator and the use-of-funds template help.
Check the dilution
Then look at what the raise costs in ownership. With a post-money SAFE or a priced round, the investors' ownership is roughly the raise divided by the post-money valuation. Y Combinator's SAFE guidance gives a worked example: targeting a $1M raise while selling 15% implies a post-money valuation cap of about $6.7M.
| Raise (hypothetical) | At a $5M post-money | At an $8M post-money | At a $12M post-money |
|---|---|---|---|
| $500K | 10% | 6.3% | 4.2% |
| $1M | 20% | 12.5% | 8.3% |
| $1.5M | 30% | 18.8% | 12.5% |
| $2M | 40% | 25% | 16.7% |
If the dilution looks too high, you have three levers: raise less and hit a smaller milestone, cut burn, or build more proof first so a higher valuation is credible. Remember that future rounds will dilute you again, so keep enough ownership to stay motivated through Series A and beyond. See how pre-seed valuations are set.
Show where the money goes
Investors want to see that the number came from a plan, not a guess. A use-of-funds breakdown makes that visible in one slide or one table. Keep it to four to six lines and tie each to a milestone.
| Use (hypothetical $1.1M raise) | Amount | Milestone it funds |
|---|---|---|
| Two engineers for 18 months | $520K | Integrations that unlock mid-market customers |
| One salesperson plus founder-led sales | $230K | From 12 to 40 paying customers |
| Marketing and events | $90K | Repeatable lead flow in two regional markets |
| Founder salaries (modest) | $160K | Two full-time founders through the next round |
| Software, legal, accounting, insurance | $100K | Clean books and contracts for seed diligence |
A table like this answers the questions investors would otherwise ask one by one: Are the founders paying themselves? Is the hiring plan realistic? Will this money actually get you to the next round? The use-of-funds template has a ready-made version.
How sector and stage change the math
The same method works everywhere, but the inputs move a lot by sector:
- B2B SaaS: burn is mostly people. Milestones are usually revenue and retention, so the plan hinges on how long your sales cycle really is.
- Healthcare and digital health: pilots, clinical evidence and regulatory steps can take longer than any software roadmap. Add months, not just money.
- Manufacturing and hardware: tooling, inventory and certification create lumpy spend. Model cash month by month, not as an average burn.
- Consumer: marketing spend can scale fast. Fund enough to prove a repeatable channel, not to buy growth you can't sustain.
- Climate and energy: projects, permits and pilots can be capital-heavy. Combine equity with grants or project finance where you can.
Pre-seed vs seed matters too. A pre-seed round usually funds proof: a product in customers' hands and early signs it works. A seed round usually funds a repeatable motion: a sales or growth engine you can show is starting to work. If you can't name the proof your pre-seed money buys, the number isn't ready.
The cost of raising too much or too little
| Raise too little | Raise too much |
|---|---|
| You run out of runway before the milestone | You give up more ownership than needed |
| You raise again from a weak position | A high valuation sets a high bar for the next round |
| You spend the year fundraising, not building | Easy money can lead to slow, expensive decisions |
| Bridge rounds on worse terms | A bigger target can take longer to fill |
For most pre-seed founders, the bigger risk is too little. Running out of money six months before your milestone is far worse than a few extra points of dilution.
Match the raise to the checks you can actually get
Your raise also has to fit the investors you can reach. In the Zalarma investor database, among US records that list pre-seed and a check size range, 1,546 list under $50K, 3,820 list $50K to $250K, 1,185 list $250K to $1M and 879 list $1M or more. That means a pre-seed round is usually assembled from several checks, with one or two larger ones anchoring it.
Do the round math before you announce a number:
- A $500K round from angels writing $25K each needs 20 investors.
- The same $500K with a $200K lead and $50K checks needs seven investors.
- A $2M seed often needs a fund that can write $750K or more to lead. If there are few such funds for your sector and region, plan a smaller round or a longer search.
Founders outside the big hubs often do best with a raise that local angels, angel groups and regional funds can fill together, and a lead that may be remote. Look up your state on the investor lists to see how many local records list your stage.
Ranges, minimums and rolling closes
- Give one number, not a range. "Raising $750K to $1.5M" makes investors wonder which milestone you're actually funding. Pick one plan.
- Know your minimum. Know the smallest amount that still reaches a meaningful milestone. If the round is slow, you can do a first close at that amount.
- Rolling SAFEs. Many pre-seed rounds close investor by investor on SAFEs, which lets you start using the money before the round is full. Agree the cap and terms once and keep them consistent. See SAFE vs priced round.
- Oversubscribed? Decide in advance whether you'll take more. Extra money is only useful if it funds a better plan.
Don't forget non-dilutive money
Grants, state programs and customer prepayments can reduce how much equity you need. A healthcare, climate or manufacturing founder may qualify for programs that a consumer app doesn't. Subtract any committed non-dilutive funding from your raise, and mention it in your pitch: investors like seeing their money go further. See non-dilutive funding.
How to say the number in a pitch
One sentence carries the whole answer: the amount, the milestone and the time. For example (hypothetical): "We're raising $1.1M to go from 12 to 40 paying clinics and $40K MRR over 18 months, which sets us up for a seed round." If an investor pushes back on the size, walk them through the burn, the months and the buffer. A clear plan is often more persuasive than a smaller ask.
Source for Zalarma figures: Zalarma investor database, as of 2026-11-01. Counts are records in our database, not the whole market; a record can list more than one stage or sector.
Frequently asked questions
How much should I raise at pre-seed?
Enough to reach the milestones that make your next round easy, plus the time it takes to raise it and a buffer, minus cash on hand. The right number comes from your burn and milestones, not from an industry average.
How many months of runway should a seed round give me?
Enough to hit your next-round milestones plus the several months it takes to raise again, with a buffer on top. In this guide's hypothetical example that comes to 19 months before the buffer; your own milestones decide it.
How much dilution is normal at pre-seed?
There's no single right number. Model the raise against a few post-money valuations, as in this guide's table, and keep enough ownership to stay motivated through later rounds. Y Combinator's example uses selling 15% in a $1M raise.
Should I give investors a range for my raise?
Usually no. One number tied to one plan is clearer. Know your minimum privately so you can do a first close if the round is slow.
Does grant funding reduce how much I need to raise?
Yes. Committed grants, state programs or customer prepayments reduce the equity you need. Subtract them from your target and mention them in your pitch.