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How much seed capital should you raise

I was asked this question yesterday by a founder.

I hear this question all the time so I thought I would write down my thoughts. 

The short answer is you should raise a bit more than you think.

The tension that most founders raising seed capital face is dilution. The seed round is when you sell shares in your company when the price is the lowest it will likely be. So founders naturully want to sell as little of that stock as they can to protect their ownership.

That makes sense.

But based on the seed investments I’ve seen both in and outside of our portfolio in great companies and less great startups, the majority of them wish they had another 3 months or so of runway to make stuff happen. 

I’m not talking about an additional year of runway, I’m talking about another 3-6months more *beyond* their original plan.

I give this advice in good times when capital is easier and in bad times when investors are scared. Raise a bit more. 

The day you close your seed round is an exciting, happy moment for sure. But there will be good days and bad days and having a little extra cash in the bank will be helpful.