Finance & Capital mentor Guy Kawasaki responds:
When raising venture funding, start-ups should generally aim to raise enough money to achieve tangible milestones that will allow them to reach profitability or raise additional capital at a substantially higher valuation. Since it has become more difficult to raise venture capital in the current financial environment, seeking to raise a larger amount to provide a safety cushion is, in my opinion, a good idea.
Nevertheless, when you initially approach investors, don't get carried away. Be conservative when you initially discuss investment opportunity with investors. Then, after they show interest, discuss an actual amount that both sides agree makes the most sense.
Copyright © 2000 inc.com LLC
Related resources at inc.com:
Frequently Asked Venture Capital Questions