Ask ten founders how they sized their round and most will admit some version of "it sounded right." A number that sounds right is how you end up raising too little and coming back to the market early, or raising too much and giving away the company for cash that sat in the bank.
There is a calmer way. A round is not a trophy, it is a purchase: you are buying months. Decide how many months you need, price them honestly, and the round sizes itself.
Step 1: pick the milestone, not the number
Investors fund progress between rounds, so the question is never "how much money do I want," it is "what must be true at the next raise." Concrete versions look like:
- €50,000 MRR with three consecutive months of growth
- The enterprise product live with five paying logos
- Break-even, so the next round is optional
Write yours down in one sentence. If you cannot, the sizing problem is upstream of the money.
Step 2: price the months
Estimate the monthly burn of the company that achieves that milestone, not the company you have today. If the plan includes three hires, price them at full cost, salary times 1.3 plus tools, from their start dates. Then count the months honestly: how long to hit the milestone at a realistic pace, not the pace of the pitch deck.
raise = (monthly burn of the planned team) x (months to milestone + buffer)
Step 3: add the buffer you will actually need
Everything takes longer than planned, and the next fundraise itself takes six months of calendar time. The standard practice is to fund 18 to 24 months even if the milestone plan says 12: the extra months cover the slip you cannot foresee and the raise you must run before the money ends.
| Amount | |
|---|---|
| Planned team burn | €45,000 / month |
| Months to milestone | 14 |
| Buffer | 6 months |
| Round size | €900,000 |
If that number is bigger than the market will give you, do not shave the buffer. Shrink the plan: fewer hires, a nearer milestone. A smaller funded plan beats a larger unfunded one every time.
The two classic sizing mistakes
Raising to a valuation. Working backwards from "we want to give up 20%" produces a round sized by ego arithmetic instead of months. Dilution matters, but it is the second constraint, not the first.
Raising for the old burn. Founders often compute the round from today's burn, then use the money to triple the team. The runway they announced evaporates in two quarters and everyone acts surprised. Size the round for the team the money creates.
Keep the model live after the wire lands
The day the money arrives, your job flips from raising to not wasting the months you just bought. That means the same discipline as before: burn and runway visible, every hire committed into the model before the offer goes out, the milestone date checked against the cash date monthly. Plainhub keeps that math live as you record what happens, but any system works if the two dates, milestone and money-out, stay in the same field of view.
Rounds are months. Buy the right number of them, then spend them like they are the last ones, because sometimes they are.