Thursday, August 13, 2015

How Much Funding Should You Raise?

Most businesses need to raise external funding from investors to take their company to the next level. An early stage startup will want to access funds to help further validate its business proposition.

A more established business that already has traction may be looking for funding to help accelerate growth. Whatever stage your business is in, if you are seeking investment, determining how much funding you should raise is absolutely critical.

The dangers of raising too little:
Incorrectly assessing your funding need has serious repercussions on your business. It will lead to inadequate validation of your proposition, or to executing growth initiatives that do not materially move the needle. Whatever the case, the business is left in limbo.

The dangers of raising too much:
So, raising more funds than are needed is the right approach to take, right? Not necessarily. Just as raising too little is risky, raising too much funding is fraught with its own dangers.

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