It’s important to raise “as much as you need to meet the milestones to raise your next round of investment.” It’s not exactly rocket science, yet the great majority of entrepreneurs I speak with are confused about how much money they need to raise.

De-risking a business proposal in stages is what it means to be a startup on the VC treadmill. That is to say, there are significant dangers associated with doing business with you at the moment because of how little is known about your company. That’s why it’s important to build a minimal viable product (which is neither minimum nor viable nor a product) to evaluate a component of your business strategy. When those things have been tried and tested, the risk of the firm decreases, and you may raise your next round of capital to go on with the adventure.

Many startups fail early on because their founders made the common error of trying to acquire capital for an arbitrary number of months or years of “runway.” Logic suggests it, yet investors care little about keeping your firm viable for the next 18 to 24 months. They want you to live long enough to accomplish specific goals, which act as proxies for risk mitigation on their end.

Let’s get further into the best ways to plan your startup’s fundraising journey through the different phases, including a breakdown of how much money you’ll need to raise at each juncture.