Respect The Round
Excerpt #7 From My Upcoming Book
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Before we get into the more tactical parts of fundraising — things like how much to raise or how to price your round — I want to talk about a major mistake I’ve made. Not once, but twice. At two different companies: PubLoft and Seedscout.
The mistake? I didn’t respect the concept of rounds.
We hear about rounds all the time in the startup world. Company A raises a $3 million seed round. Company B closes a $30 million Series B. Or Company C secures an $800,000 pre-seed. I used to think this kind of labeling was just packaging. Marketing. Something to announce on Twitter. I figured if you had money in the bank — enough to operate — you were good to go. Time to build.
But over time, especially while running Seedscout, I learned how wrong that mindset was.
At Seedscout, we raised around $400,000 total. But it didn’t come in all at once. It trickled in slowly — in $25K and $30K chunks — over the course of three years. We never had more than maybe $20K or $30K in the account at any given time. That meant we were constantly playing defense. Constantly making short-term decisions. Constantly wondering if we could make payroll, or survive another month.
It was exhausting. It killed our ability to plan. And it crushed me mentally as a founder.
What I eventually realized is that raising in a proper round gives you breathing room. It gives you the ability to plan strategically, instead of reactively. It allows you to say: “Okay, our burn is $20K a month. My salary is X, my co-founder’s is Y. We need two growth hires. That gives us 12 months of runway at minimum, so we should raise $350K — ideally $500K — to actually give ourselves a shot.”
That kind of back-of-the-napkin math is simple, but it’s powerful. And once you’ve done it, your job is to raise toward that goal, not to just take the first check and get back to work.
Let’s say someone offers you $50K. That’s great — but you have a choice. You can take that $50K and try to build with it (and run out of money again in two months). Or you can take that $50K and use it as leverage to get to $100K, then $200K, then $500K — building a proper round that gives you time, structure, and alignment with your early investors.
I know this all sounds obvious. But trust me, when you’re in the middle of a raise and someone wires money, it’s tempting to call it a win and go back to building. You’re tired. Fundraising is hard. You want to escape. But stopping too early is dangerous.
The whole point of a round is to give yourself enough capital to reach a clear milestone. You need to raise the amount that matches your plan. And if you stop raising early, not only do you risk falling short of your runway — you risk falling short of the expectations you set with your earliest backers.
So here’s the takeaway: Don’t stop fundraising after one check. Decide on a round size, commit to it, and don’t close the laptop until you’ve hit it. That’s the only way to build with clarity, confidence, and time on your side.
Of course, the one exception is if your company is already profitable and you’re generating more than enough cash to self-fund. But that’s rare. And even in those cases, if you’re raising money to hit a big milestone, the same logic applies — structure your raise. Pick a number. Get there. Then execute.
Trust me, it’ll save you a lot of mahem.