FundraisingTips
How Much Should You Raise? The Complete Guide to Startup Fundraising in 2025
Learn how to calculate your raise amount, choose between SAFEs and priced rounds, and navigate term sheets strategically.
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VC isn't right for every startup. Learn the 8 questions to ask before raising, how to find investors who actually fit your company, and the systematic process that closes deals.
Mark Bugas
Venture capital. For many founders, those two words represent validation, growth potential, and that coveted spot on the front page of TechCrunch. But the reality is that VC isn't right for every company, and an absolutely ridiculous number of founders waste months pitching investors who could never write them a check.
If you're considering raising venture capital, you need to understand what you're signing up for, what alternatives exist, and how to actually find investors who are a genuine fit. Let's break it down.
1️⃣ Can you realistically reach $100M in revenue within 8-10 years?
This isn't about ambition or vision. It's math. VCs need massive exits because most of their portfolio companies will fail. If your business model can't scale to that level within that timeframe, VC economics simply don't work.
2️⃣ Is your market large enough to support that growth?
Small markets cap your upside. VCs invest in companies that can dominate large, expanding markets. If you're targeting a niche that tops out at $50M total addressable market, you're not a fit.
3️⃣ Is your business model actually scalable?
Service businesses, lifestyle companies, and businesses with unfavorable unit economics don't scale the way VCs need them to. Understanding your financial model isn't optional.
4️⃣ Do you have a clear path to significant revenue?
Everything we're discussing doesn't matter if there's no clear path to generating substantial revenue. VCs invest in businesses, not science experiments.
1️⃣ Are you willing to give up control and ownership?
With each funding round, you'll own less of your company (check out Dilution Calculator) and have less decision-making authority. More investors mean more board members, more opinions, and more constraints. If you want full control, bootstrap.
2️⃣ Can you navigate 8-10 years of intense stress?
Building a venture-backed company is a marathon sprint. The pressure is relentless. The expectations are enormous. If you're not built for that duration and intensity, reconsider.
3️⃣ Are you willing to exit?
Here's the duality: you need to commit to 8-10 years of building, but you can't plan to run a lifestyle business in perpetuity. VCs need liquidity events. If you want to build a company you run forever, VC isn't the path.
4️⃣ Have you explored alternatives to VC?
Most founders jump straight to venture capital without considering other options. That's a mistake.
Before you spend months chasing VCs, understand what else is available:
We're seeing a surge in debt financing across the venture ecosystem, from seed-stage companies to growth rounds:
There's been a recent surge in founders leveraging grants. It's free money if you qualify and can navigate the application process.
The most underrated source of capital. If you can build a business that generates cash, you maintain control and avoid dilution entirely.
If you've answered "yes" to those eight questions and determined VC is right for you, here's what the landscape looks like:
Important caveat: These numbers vary dramatically by geography. Silicon Valley and New York command premium valuations. A YC company might raise at a $20M post-money valuation for pre-seed, which would be insane for a Midwest or Southern startup. Austin falls somewhere in the middle.
For geographic-specific data, check out Carta's state-by-state analysis and PitchBook's regional breakdowns in their quarterly Venture Monitor reports.
According to PitchBook-NVCA's Venture Monitor (as of September 30, 2025), here's where median valuations and deal sizes actually landed across all stages:
Here's where most founders waste their time: they pitch anyone with "Ventures" in their name.
When VCs raise their funds, they make explicit promises to their limited partners (LPs) about their investment strategy:
This is not flexible. An early-stage fund that invests in pre-seed and seed cannot write a Series B check. A growth-stage fund requiring $5M ARR will not invest in a pre-product company.
Yet founders ignore this constantly.
Before you add an investor to your target list, verify:
This isn't hard research. It's publicly available information on their websites, Crunchbase, and LinkedIn. Doing this basic homework separates you from 80% of founders. Flowlie can also help with that, see how.
Once you have a list of investors who can invest in your company, you need to determine who should invest.
Capital is abundant. Strategic partners are rare.
When you bring on an investor, especially one leading your round with a board seat, you're entering a multi-year partnership. Choose poorly and you'll have someone without expertise or network giving you bad advice and making decisions about your company.
What to look for beyond the check:
Don't assume that because someone invests in your sector, they're an expert. There are plenty of "generalist" partners at sector-focused firms who don't actually understand your business.
The single biggest mistake founders make: they start pitching before they're ready.
Here's the truth: the moment you tell investors "I'm raising," a clock starts ticking. Momentum matters. If your process drags on for months, investors get nervous. If you're not prepared with answers to basic questions, you look amateur.
Spend 70% of your time preparing, 30% executing.
Not all introductions are created equal. Here's the hierarchy:
They have the strongest incentive to help you succeed. They've committed capital. Their reputation is on the line. These intros carry serious weight.
If you're connected to founders who've raised from your target investors, these intros are gold. VCs trust their portfolio founders' judgment implicitly.
Alumni networks, accelerator connections, mutual friends. These work, but carry less weight than the top two.
Cold email works, but conversion rates are significantly lower. If you're going this route, make it count.
Do not ask an investor who passed on you to introduce you to other investors – with one exception. If they passed because you're too early for their stage focus but want to stay in touch, that's different. They're signaling genuine interest in your trajectory. But if they passed because they didn't believe in your business, team, or market? You're asking someone who judged you unworthy of their capital to vouch for you. It never works.
Most founders dramatically underestimate their network reach. You're not just connected to your first-degree contacts – you have access to their networks too. The problem? Manually mapping those connections is impossible at scale.
Flowlie's network analysis solves this. We analyze your LinkedIn data to surface introduction paths you didn't know existed, then score each path based on dual relationship strength: yours to the connector, and the connector's relationship to the target investor. You discover warm paths to investors you thought required cold outreach and prioritize the connectors most likely to make strong introductions on your behalf.
If you need to go cold, keep it ruthlessly concise and clear.
Structure:
Critical rules:
Remember: nobody has ever received a term sheet from a first email. You're optimizing for step one – getting a meeting.
Once you start taking meetings, execution is everything.
Try to schedule most of your investor meetings within a compressed timeframe (2-4 weeks) rather than spreading them over months. Why?
Even if you don't have major news, send bi-weekly updates to investors you've met with. Share small wins, customer conversations, product progress. This keeps you top of mind and demonstrates momentum.
Identify and broadcast exciting milestones as they happen:
These create urgency and give investors a reason to move faster.
Most founders underestimate how many investors they need to talk to.
Typical conversion funnel:
If your conversion rates are worse than this (and they might be for first-time founders), you need a bigger top of funnel. If you need to talk to 50 investors to get one check, and you want to close 10 investors, you need 500 investor conversations.
That's not a failure. That's math. Adjust your expectations and work accordingly.
Venture capital is a tool, not a trophy. It's right for companies with massive growth potential and founders willing to embrace the trade-offs.
Before you spend six months pitching, ask yourself:
If you're ready to raise, remember: 70% of your time should be spent preparing, not pitching. Build a qualified list, map your network, prepare your materials, and run a tight process.
Do the basic research. Understand thesis fit. Optimize for warm introductions. Keep your outreach concise and clear. Create calendar density and maintain momentum.
The founders who raise capital aren't necessarily the ones with the best companies. They're the ones who treat fundraising as a systematic process with clear inputs and measurable outputs.
Stop winging it. Start systematizing. Try Flowlie today.
Join thousands of founders using our technology to find the right investors and close rounds faster than ever before.
Learn how to calculate your raise amount, choose between SAFEs and priced rounds, and navigate term sheets strategically.
Learn the strategic, two-path system (Warm vs. Cold) founders use to get read.
The real timeline and conversion rates for closing a Series A fundraise, backed by data from an actual round.