Ask HN: How long should money the 1st investment last?

[MateuszMucha]

It's a bit weird situation. I got accepted into an accelerator, will go with them unless there's something I like more and there's just ~10 days left before I have to sign the papers.

I just finished an initial Skype call with two guys from a really nice VC fund (made of people who have created successful startups themselves). They like my startup and are willing to work under this unusual time pressure. My gut tells me that when it comes to non-financial aspects of the relationship, it could be better to go with them.

They asked me to send them a list of expected expenses. I know pretty well how much I'm gonna need, but I don't know how much it should last for. While I have some income and it's likely it will increase over the next 6 months, it's not guaranteed and I think I should assume it won't go up, just to be safe.

So how long do I need to be able to run on this 1st investment? 6 months? 12? 18?

[toddkazakov]

The most important question before raising money is what do you want to achieve with it. Raising a round just for the sake of raising a round might not be the best thing for your business. Set a goal and the resources you need, multiply by 2. This is the rule of thumb I go with, because the work you'll do will take more time than expected and you need to have a buffer on top of this. Keep in mind that raising a bigger round takes time. Make sure you have long enough runway after you've completed your goals, so you can start raising a second round if needed.

[MateuszMucha]

Thank you. So I think that I can build what I want in 3-4 months, but most likely will not be able to support that operation just yet. And I will not want to scale down just because my MVP is done.