More than you think is the answer.
Typically, when somebody walks in my office and says, “Here’s my business and product. I’ve calculated it all out – this is what I’ll need to get this thing running and to be self-sustaining,” I typically double or triple whatever they tell me in my mind.
They come in and say “Look, this is going to cost me $80,000,” then I’m instantly going to $160,000 or $240,000. If they say it is going to cost $1,000,000, I usually immediately tell them, “Let’s plan on $2,000,000 to $3,000,000.” This is usually met with a resounding “What!?” In some ways they might feel sticker shock and think, “I can’t ask for that much money. I’m scared to death to just ask for what I thought it was going to be worth or what I thought I needed, and now you’re telling me to ask for even more.”
Why the need for more?
It’s hard to come back a second or third time to an investor when the results aren’t there. Get enough to get the job done and have a cushion. Make sure you have plenty to get the job done. There will be a lot of surprises on the road, so having plenty of money to handle those surprises is good business planning.
