The right amount to raise is the amount that gets you to your next milestone with a real reserve, and you only find it by modeling what each option does to you at the exit. "Raise as much as you can" and "raise as little as you can" are both shortcuts. They feel like strategy. They're guesses.
The problem: round size gets decided by mood
In most raises, the size of the round is set early and almost casually. Someone runs a burn number, multiplies by 18 or 24 months, rounds up, and that's the ask. Then the market decides. If investors are excited, the round grows. If they're cautious, it shrinks.
Neither of those is a decision.
And round size touches everything. It sets how much you give up now, how long you can go before you have to raise again, what valuation you need next time to avoid a flat or down round, and what you actually walk away with when the company sells.
Why both common answers fail
"Take all the money." The logic sounds safe: capital is a cushion, and nobody knows what next year brings. But a bigger round costs more ownership, and it quietly raises the bar for the next raise. Investors in the following round will want to see progress that justifies a meaningful step up. If the extra money didn't buy extra progress, you've made the next raise harder.
"Take as little as possible." This one protects ownership on paper. The reality is it often leaves you back in market 9 months later, with less runway and less room to negotiate. "Just enough, just in time" is how founders end up raising from the floor. I've seen it trap more good companies than bad terms ever have.
The framework: three sizes, two future events
Here's how I'd size any round.
Model three sizes. A smaller round, your target, and a larger one. Keep everything else the same so the only variable is the amount.
Test each against a downside and upside valuation. The price you get isn't fully in your control. See how each size holds up if the valuation comes in lower than you hoped.
Run each one through the next round. Assume you'll raise again. How much more ownership does each path give up, and what does the company need to show to make that next round work?
Run each one to the exit. Pick three exit values: disappointing, solid, great. For each round size, look at one line: what the founders actually take home.
That last line is the one that matters. When you put it side by side, the right size is usually obvious. And it's rarely the biggest number or the smallest one.
The move: tie the extra dollars to extra progress
The test for a bigger round is simple. What does the extra capital buy that the smaller round doesn't? If the answer is a specific milestone, sooner, the bigger round might be right. If the answer is "more cushion," you're paying for comfort with ownership.
When an investor offers to go bigger, ask them directly: "Walk me through what you think this extra capital buys that the smaller round doesn't." Good investors will have a real answer. Some will point to a hire or a market you've been underweighting. That's useful. If they can't answer, you've learned something about how they think.
Fundraising is just closing a deal. Good salespeople don't take a bigger order the customer can't use. Good founders don't take a bigger round the business can't turn into value.
What to do this week
- Write your milestone and the date you need to hit it.
- Build a monthly plan that gets there, then add a reserve for one bad quarter.
- Model that number as your target, plus a round 30% smaller and 30% larger.
- Run all three to a low, middle, and high exit, and compare what the founders take home.
Feldman Dilution
Feldman Dilution takes you from your ownership today through the proposed round, then puts a smaller, target, and larger round side by side against downside and upside valuations. Stage 04 models a future round and three exit values, so you can see founder proceeds for each path before you commit. It ends with a decision brief you can bring to your board or co-founder.
Open Feldman Dilution →Get the next lesson in your inbox
Short, practical lessons like this one for founders running $1M–$20M companies, plus every new free tool before anyone else.
If this is the call in front of you, let's talk it through.
A focused 30-minute conversation. No pitch. Just a direct discussion about the decision and whether I can help.
Book a call with Danny →
Danny Feldman is a 3× founder and the advisor behind Feldman Advisory. He founded and scaled Stellar to $100M in annual revenue across 15 states, raised $55M+ as a founder, and used AI to double revenue before exiting to private equity. Earlier, he recruited and trained 55,000+ sales reps at Cutco and grew a division from 1 to 58 locations. Operator to operator, he now helps founders of $1M–$20M companies get out of the middle of the business, build the leadership team, and raise capital. Book a 30-minute call →