Fundraising stage selector

Fundraising Stage Selector

Every later step - deck, targeting, terms - is wrong if the stage is wrong. The most common founder error is raising at the stage they wish they were at, not the one their evidence supports. This skill fixes the stage first.

When to use this skill

Reach for it before writing a deck or emailing an investor, whenever the founder asks how much to raise, what valuation is realistic, or whether to raise at all yet. It produces the envelope; everything downstream is calibrated to it.

Read the stage off evidence, not ambition

Place the company by what is proven, not what is hoped:

• Pre-seed: a team and an insight, maybe a prototype or design partners. You are selling the founder and the bet. Typical raise $250k-$1.5M.
• Seed: a shipped product and the first signal of pull - early revenue, retention, or week-over-week usage growth. Typical raise $1.5M-$4M.
• Series A: a working engine. Repeatable acquisition, real retention, and a metric that scales (often ~$1M+ ARR for SaaS, with strong growth/retention). Typical raise $6M-$15M.

If the evidence straddles two stages, you are at the lower one. Investors price the floor of your story, not the ceiling.

Size the raise from the milestone, not the market

Do not raise "as much as you can." Raise the amount that buys the next fundable milestone plus margin:

1. Name the milestone the next round requires (e.g. "$1M ARR at 120% NRR").
2. Estimate monthly burn to get there and the months it takes.
3. Raise milestone-cost x 1.5 (18-24 months of runway, never under 12).
4. Sanity-check dilution: a healthy round sells 15-25%. If your target amount forces >25% at a realistic valuation, the amount is too big or the valuation too low - fix one.

Valuation envelope

Triangulate, never anchor on a single hope:

• Comparables: what companies with your traction raised recently, in your geography and sector.
• Dilution math: amount ÷ target dilution = post-money. ($2M for 20% => $10M post.)
• Instrument: pre-seed/seed usually a SAFE with a valuation cap; priced rounds start at seed/A. Pair with [[safe-vs-priced-round]].

The number you can defend beats the number you can dream. An overpriced round you barely fill creates a down-round trap next time.

Should you raise at all?

Push back before pulling forward. Don't raise if: the milestone is reachable on revenue, the story has no proof and no clock, or dilution buys less than a clear step-change. Bootstrapping a quarter to add proof often beats raising weak.

Anti-patterns

• Pricing on TAM instead of traction.
• A round so large it sets a Series A bar you cannot clear in 24 months.
• Raising on "everyone is raising" with no milestone to point the cash at.

Deliverable

A one-page raise thesis: stage (with the evidence that fixes it), amount, the named milestone it funds, months of runway, target dilution, and a defensible valuation range with its comparables. Hand this to [[fundraise-readiness-audit]] before going out.