Ask a Seed VC: How much should I try to raise?

Hadley Harris

By Hadley Harris and Anthony Ha

Welcome back to Ask a Seed VC, our advice column on startup fundraising and investing. We’ll be doing something a little different today: Answering a few questions that were submitted via Twitter.

The first question comes from Howard Stark: How do you determine your “ask”? That number can range from $200k for a bare bones attempt where one mistake can kill you to $1M for a comfortable shot at your goal with room to maneuver. Or should you fit your ask to each VC’s preferred check size?

While there’s not a one-size-fits-all approach that will work for every company, we’d suggest keeping your initial fundraising target on the low side.

One rule of thumb that we use at Eniac is that founders should aim to raise about two years worth of runway. But you can also calculate your fundraising target based on the minimum amount of money required to accomplish your basic goals. Then if you only raise that minimum amount, you’ve still got what you need. And if your fundraising efforts are particularly successful — with investors competing to participate — you can raise an oversubscribed round adding up to a larger amount.

Also, yes, it’s worth knowing how much different funds will usually invest — at Eniac, for example, we tend to write our first checks in $1 million to $4 million rounds, but we’ve also done deals outside that range, particularly recently. And you don’t want to be suggesting different round sizes to different investors, and not just because it might be confusing for you. With the collaborative nature of seed rounds, it also creates the risk that investors will talk to each other and start wondering if you’re being deceptive.

Our next question comes from Eric Futoran, co-founder of our portfolio company Embrace: I get this one all the time bc there is an assumption that volume of mtgs is how to raise: how many VCs should a founder talk to and how do those meetings affect the probability of success?

This will depend on the kind of round you’re raising. When our portfolio companies go out to raise a Series A, we generally work with them to create a list of 30 funds that might invest. For a seed round, you’ll probably need an even longer list, because finding that initial fit between investor and company can take longer when a company is so nascent. And there’s really no downside to creating as comprehensive a list as possible.

At the same time, you don’t want to reach out to everyone on your list at once. Instead, it’s more manageable if you group the list into different tiers, working your way down one tier at a time.

Somewhat counterintuitively, the investors you’re most excited about meeting shouldn’t necessarily go in the first tier. That’s because you’ll usually learn a lot from those early meetings, and your pitch will improve in the process. So don’t blow your best chances with a rough pitch — wait until it’s a bit more polished.

And one more from Howard Stark: Is there a database / web site that suggests which VCs we should be targeting based on a startup’s characteristics? Search parameters include stage, check size, preferred location, technology type, etc.

We’re not aware of a searchable database that does exactly what you’re describing, but you should able to accomplish something similar by using this startup-investor matching tool created by Lolita Taub.

Have a question for “Ask a Seed VC”? Email us at (Requests for investment and pitch decks with no questions beyond “what could I do better?” will be ignored.) Please specify whether or not we should include your name and your company’s name if we publish an answer!

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