🔀 raising big to avoid raising again
This week in The Pivot: over-raising to dodge your next round — giving away more equity, taking on a milestone you can't hit, and winding up back at the table anyway. From a worse spot.
Hey friends 👋
Every Monday in The Pivot, we share one mistake we’re seeing founders make, and the quick redirect that makes all the difference — in just 250 words.
Here’s this week’s:
The antipattern: sizing your raise around runway, not milestones.
Fundraising is brutal — so the temptation to just do it once and be done makes total sense: lock in three years of runway, and never think about it again.
Founders pitch this as a feature. Investors love the confidence.
Except the math doesn’t work. You:
Gave away more equity at a lower valuation.
Committed to a milestone sized for the capital, not your actual evidence.
Will raise again anyway if reality drifts (and it will).
Except… now you’ve burned runway, missed a milestone, and have less equity.
The fix: raise for the next proof point.
Size your round to one specific, measurable milestone: the exact thing you need to prove before the next raise.
Then model it out — two smaller raises at better valuations vs. one big raise at an earlier-stage one. Run the dilution numbers. The math almost always favors milestone-based raises.
Reframe the next raise as a reward, not a chore.
You hit the proof point; now you come back with leverage.
The tool: dilution modeling
Before you take the big round, build a simple two-path model: Path A (raise big now), Path B (raise lean, hit milestone, raise again). Compare the remaining equity in each exit scenario. Most founders who do this exercise take the smaller check.
It takes 20 minutes with a tool like Pulley.
Until next week,
—jdm
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