Will Price covers a recently popular theme in this post regarding the optimum amount of money to raise. Whilst many contend you should raise as much as you can, those with a marketing bent advise that it’s better to show a path of increasing valuation in each round.
But how much is typically raised in the various rounds?
Will refers to Fewnwick’s recent report on trends in venture capital which reported that the median valuations for A-D rounds were $5m, $12m, $23.5m, and $41.71m respectively.
Patterns and data suggest that for software companies an $8-10m “A” post appears to maximize the probability of a healthy B round.
What you can’t ignore though is being ready with a sensible answer to the question – “So how do you plan to use this funding?”.