How Long Should Pre-Seed Funds Last? Here’s What Investors Expect

How Long Should Pre-Seed Funds Last? Here’s What Investors Expect

At the pre-seed stage, figuring out “how much should I raise?” can feel like a guessing game. Too little, and you’re running out of cash before real traction. Too much, and you’re giving away more equity than you need, sometimes years before it matters.

The truth is, there’s no magic number. But there is a proven framework. Pre-seed fundraising isn’t about raising the biggest round possible. It’s about raising enough to reach the milestones that unlock your next round, without losing control of your company too early.

In this guide, we’ll walk through how to calculate the right amount of pre-seed runway, what investors expect to see, and how to plan your raise with confidence.

Why Runway Matters More Than Round Size

Most founders obsess over the size of their pre-seed round. But investors don’t fund you based on a number, they fund you based on momentum.

• Raise too much: You give away unnecessary equity and set expectations sky-high. If you don’t deliver, your next round gets harder.
• Raise too little: You end up back in fundraising mode in 6 months, distracted from building and signaling instability to investors.

Runway is the real question. How many months of breathing room do you need to build, test, and prove enough for the next round? The current industry rule of thumb is 18-24 months. Anything shorter is risky, and anything much longer can look like you’re over-raising before you’ve earned it.

Step 1: Understand Your Monthly Burn

Before you can decide how much to raise, you need to know what you’re actually spending. Monthly burn = your fixed + variable costs.

• Fixed costs: salaries, rent, core software, legal/accounting.
• Variable costs: marketing, contractors, experiments.
• Hidden costs: the things founders forget, insurance, taxes, travel, unexpected vendor fees.

A lean pre-seed startup might burn $15K–$30K/month depending on location and team size. Don’t guess. Build a simple spreadsheet that shows where every dollar goes.

Step 2: Choose Your Target Runway

Now that you know burn, you can multiply it by the number of months you want to buy yourself.

• 18 months runway = minimum survival. Enough to build MVP + some traction.
• 24 months runway = safer bet. Gives buffer to hit key metrics and raise without desperation.

Example: If you burn $30K/month →

• 18 months = $540K
• 24 months = $720K

Add a 20%+ buffer for surprises. That $540K becomes ~$750K. That $720K becomes ~$1M.

Step 3: Sanity-Check With Dilution

Investors expect 10–20% equity at pre-seed. That’s your dilution range.

• If you raise $750K on a $4M valuation cap, that’s ~19% dilution.
• If you raise $1M on a $10M cap, that’s ~10% dilution.

Too low a raise looks underprepared. Too high a raise looks greedy (and signals you don’t understand milestones). Smart founders raise enough to justify 18-24 months of progress, no more, no less.

Step 4: Anchor Raise Amount to Milestones

Investors don’t fund time, they fund outcomes. Your pre-seed raise should be tied to specific, investor-visible milestones:

• Building and launching MVP
• Securing first 100–1,000 users (depending on market)
• Proving initial revenue or pilots
• Hiring 1–2 critical team members
• Lining up early partnerships

Frame your raise around these milestones: “We’re raising $750K to launch our MVP, onboard 500 users, and reach $10K MRR within 15 months.” That’s concrete. That’s fundable.

Common Mistakes Founders Make

• Guessing the number: Saying “we’re raising $1M” because it sounds good. Investors see through it.
• Overfunding: Taking $1.5M at pre-seed when your plan only calls for $400K. You give up leverage too early.
• Not leaving buffer: Running out of cash in month 11 because you didn’t plan for hiring delays or slower traction.
• Ignoring dilution math: Ending up at seed with only 60% of your company left.

Quick Checklist for Founders

✅ Know your monthly burn.
✅ Decide on 18-24 months runway.
✅ Add a 20%+ buffer.
✅ Check dilution range (10–20%).
✅ Tie raise to investor-friendly milestones.

Do this, and your “How much should I raise?” question will answer itself.

Pre-seed fundraising isn’t about hitting a magic number. It’s about designing a raise that gives you time, traction, and momentum without compromising ownership. Investors respect founders who can justify their raise logically, because it shows you’re not just building a product, you’re building a company.

At Capwave AI, we help founders answer these questions with clarity. From pitch deck feedback to investor matching, our tools make sure your raise is sized right, story-driven, and targeted to the right investors.

Want to calculate your runway and plan your round with confidence? Download our Pre-Seed MVF guide and start mapping your raise today.