You need to raise money.
You don’t know how much.
You need accurate calculation.
You need funding needs clarity.
Funding needs. Capital requirements. Accurate calculation. Your success.
This guide shows you how.
Step-by-step walkthrough. Calculator usage. Real examples. Your clarity.
Read this. Use calculator. Know your number.
Key Takeaways
- Calculate funding need—use Funding Need Calculator to determine exact capital requirements
- Enter burn rate—input your monthly burn rate to see how much you need
- Set runway target—choose desired runway (12-18 months recommended) to calculate funding
- Include growth plans—account for growth investments and strategic initiatives
- Review results—see total funding need, monthly burn, and runway extension
Table of Contents
Why Calculation Matters
Accurate calculation enables smart fundraising.
What happens without accurate calculation:
- Too little: Undercapitalized and vulnerable
- Too much: Excessive dilution and poor signaling
- Wrong timing: Missed opportunities
- Failed fundraising
What happens with accurate calculation:
- Right amount: Sufficient capital for milestones
- Optimal dilution: Preserves equity
- Right timing: Captures opportunities
- Successful fundraising
The reality: Calculation enables success.
Step 1: Enter Burn Rate
Enter your current burn rate:
Calculate Current Burn Rate
Calculate it first:
- Use our Burn Rate Calculator
- Enter current cash and expenses
- See monthly burn rate
- Use this number in funding calculator
Why it matters: Accurate burn rate enables accurate funding calculation.
Enter Monthly Burn
What to enter:
- Monthly burn rate from calculator
- Or manual calculation
- Gross or net burn (be consistent)
- Current monthly spending
Why it matters: Burn rate drives funding need.
Pro tip: Calculate burn rate first. Use our Burn Rate Calculator for accurate number. Then enter into funding calculator.
Step 2: Set Runway Target
Set your desired runway:
Choose Runway Length
What runway to choose:
- 12-18 months: Standard target
- 18-24 months: Conservative target
- 6-12 months: Aggressive target
- Based on milestones and plans
Why it matters: Runway determines funding amount.
Consider Milestones
What milestones to consider:
- Key product milestones
- Revenue milestones
- Growth milestones
- Next funding round timing
Why it matters: Milestones inform runway needs.
Use Runway Calculator
Calculate it:
- Use our Cash Runway Calculator
- See current runway
- Understand runway needs
- Set appropriate target
Why it matters: Understanding current runway helps set target.
Pro tip: Set runway target. 12-18 months is standard. Consider milestones and next funding round timing.
Step 3: Include Growth Plans
Include growth investments:
Growth Investments
What to include:
- Hiring plans
- Marketing investments
- Product development
- Infrastructure expansion
Why it matters: Growth plans increase funding needs.
Strategic Initiatives
What initiatives to include:
- Market expansion
- New product lines
- Technology investments
- Partnership development
Why it matters: Strategic initiatives require capital.
One-Time Costs
What costs to include:
- Equipment purchases
- Office setup
- Legal and compliance
- Other one-time expenses
Why it matters: One-time costs add to funding need.
Pro tip: Include growth plans. Hiring, marketing, product development, strategic initiatives. Growth plans increase funding needs.
Step 4: Review Results
Review funding need results:
Total Funding Need
What to review:
- Total capital required
- Monthly burn rate
- Runway extension
- Growth investment allocation
Why it matters: Review enables validation.
Check Assumptions
What assumptions to check:
- Burn rate accuracy
- Runway target appropriateness
- Growth plan realism
- One-time cost completeness
Why it matters: Assumption check improves accuracy.
Adjust as Needed
What adjustments to make:
- Refine burn rate
- Adjust runway target
- Revise growth plans
- Update one-time costs
Why it matters: Adjustment improves accuracy.
Pro tip: Review results. Check assumptions, validate numbers, adjust as needed. Review ensures accuracy.
Using Results
Use results for fundraising:
Fundraising Materials
What materials to create:
- Pitch deck with funding ask
- Financial projections
- Milestone plan
- Use of funds breakdown
Why it matters: Materials enable successful fundraising.
Investor Conversations
What conversations to have:
- Explain funding need
- Justify amount
- Show milestone plan
- Demonstrate planning
Why it matters: Conversations build confidence.
Decision Making
What decisions to make:
- Proceed with fundraising
- Adjust plans
- Revise ask amount
- Timing decisions
Why it matters: Decisions enable action.
Pro tip: Use results. Create materials, have conversations, make decisions. Results enable fundraising success.
Your Next Steps
Calculate burn rate. Use funding calculator. Review results.
This Week:
- Review this guide
- Calculate current burn rate
- Use Funding Need Calculator
- Review results
This Month:
- Refine funding need calculation
- Create fundraising materials
- Prepare investor conversations
- Make fundraising decisions
Going Forward:
- Update calculation regularly
- Adjust as plans change
- Use for all fundraising
- Improve accuracy over time
Need help? Check out our Funding Need Calculator for funding calculation, our Burn Rate Calculator for burn rate calculation, our Cash Runway Calculator for runway calculation, our milestone-based funding guide for planning, and our funding plan guide for different capital strategies.
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FAQs - Frequently Asked Questions About How Much Money Do You Actually Need? A Step-by-Step Funding Needs Calculator Wal
Why is accurately calculating your funding need important before raising capital?
Raising too little leaves you undercapitalized and vulnerable, while raising too much causes excessive dilution and poor signaling to investors.
Learn More...
If you raise too little, you will not have enough capital to reach critical milestones, forcing you to fundraise again from a weak position or run out of cash.
Raising too much means giving up more equity than necessary, which dilutes your ownership and can signal to the market that you do not understand your own business economics.
An accurate calculation ensures you raise the right amount at the right time, preserving equity while ensuring sufficient runway to hit the milestones that matter.
How do I calculate my monthly burn rate for the funding needs calculator?
Use a Burn Rate Calculator to input your current cash balance and monthly expenses, which gives you the monthly burn rate to enter into the funding calculator.
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Your burn rate is the amount of cash your business spends each month. Calculate it by tracking all monthly operating expenses including salaries, rent, software, marketing, and overhead.
Be consistent about whether you are using gross burn (total spending) or net burn (spending minus revenue), and use the same definition throughout your funding calculation.
Getting this number right is critical because your burn rate is the foundation of your entire funding calculation. An inaccurate burn rate leads to either under-raising or over-raising.
What runway target should I set when calculating funding needs?
A 12 to 18 month runway is the standard target for most startups, though conservative founders may target 18 to 24 months.
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The standard 12 to 18 month runway gives you enough time to hit key milestones and prepare for a subsequent funding round without excessive dilution.
Your runway target should be based on specific milestones like key product launches, revenue targets, growth benchmarks, and the expected timing of your next funding round.
An aggressive 6 to 12 month target may work if you have near-term revenue or are bootstrapping, but it leaves little margin for unexpected delays or pivots.
What growth plans and one-time costs should I include in my funding needs calculation?
Include hiring plans, marketing investments, product development costs, infrastructure expansion, equipment purchases, office setup, and legal and compliance expenses.
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Growth investments like new hires, marketing campaigns, product development, and market expansion initiatives significantly increase your funding needs beyond just covering current burn.
Strategic initiatives such as entering new markets, launching new product lines, investing in technology, or developing partnerships all require capital that must be accounted for.
Do not forget one-time costs like equipment purchases, office setup, legal fees, and initial compliance costs. These add to your total funding need even though they will not recur monthly.
How should I use the funding needs calculator results to prepare for fundraising?
Use the results to create your pitch deck's funding ask, build financial projections, develop a milestone plan, and prepare a clear use-of-funds breakdown for investors.
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Your total funding number from the calculator becomes the ask amount in your pitch deck, backed by specific data on burn rate, runway target, and growth investment allocation.
Prepare a detailed use-of-funds breakdown showing exactly how each dollar will be deployed across operations, hiring, marketing, product development, and strategic initiatives.
Investors expect you to justify your ask amount, so practice explaining how the funding amount connects to specific milestones that will drive the business forward and position you for the next round.
How often should I update my funding needs calculation?
Update your calculation regularly, at minimum monthly, and always recalculate when plans change, expenses shift, or you are preparing for a new fundraising round.
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Your burn rate changes as you hire, add services, or cut expenses, so a calculation from three months ago may significantly under- or over-estimate your actual needs.
Review and refine assumptions about growth plans, one-time costs, and runway targets as your business evolves. What seemed realistic at planning may need adjustment based on actual performance.
Always recalculate before any investor conversation to ensure your ask amount reflects current reality, not outdated projections.
Sources & Additional Information
This guide provides general information about using the funding needs calculator. Your specific situation may require different considerations.
For funding need calculation, see our Funding Need Calculator.
For burn rate calculation, see our Burn Rate Calculator.
For cash runway calculation, see our Cash Runway Calculator.
Consult with professionals for advice specific to your situation.
