There is no shortage of opinions on this topic but Wayne Barz takes a pretty good approach to answering, or not answering, the question How much should I raise?
I certainly can’t answer your specific “how much” question in a single 1,000 word blog post. But I will suggest there are only three main buckets in which to place your answer generally. Once you’ve placed your trust in one of these buckets, then you can get to work on your specific amount:
“raise no money now, keep bootstrapping” (~20% of deals should do this)
“raise only what you need to get the current job done” (~70% of deals should do this)
“go big or go home” (~10% of deals should do this)
I’m planning on discussing how I decided how much money to raise for Plain once our company has our site and blog up and running (tomorrow, hopefully). But I can say that I am generally taking Wayne’s #2 approach; raising enough to get the current job done and go from there. Although I did have the opportunity for #3 I think it is still early on and we have a lot of unknowns so I see no reason to move too quickly and get over our heads.
Great post by someone who has seen a lot of deals. Read the whole thing.