Salvatore Tirabassi, Founder and Managing Director of CFO Pro+Analytics, joins hosts Anthony Franco and Chris Franks on How To Founder to settle one of the messiest decisions in early-stage business: should you take outside money, and if so, how much, when, and from whom?

Table of Contents

• Should You Even Be Raising Capital?

• When Speed and Sales Cycle Justify the Raise

• How Much to Raise: Budget, Then Add 100%

• Why “Punch Up the Expense Side” Never Gets Asked

• Defining Real Milestones for Pre-Seed, Seed, and Series A

• Bizarro World: Why Capital Markets Don’t Make Sense

• Run Investor Relations in Parallel With Product

• What Happens When You Fall Out of the Top Tier

Anthony Franco: Why should I, as a founder, care? Don’t I just go raise as much money as I can?

Salvatore Tirabassi: There’s a phrase often floated in venture capital: if the capital’s available, you might as well take it—and take more if you can. You have to balance that with price and cost. If it’s equity, how much will it dilute you? Are there weird terms? On the debt side, what are the payment terms? My view is, if you’re doing a good job and someone puts a deal in front of you and they feel like a good partner, take it very seriously.

Anthony Franco: I think the list of why you should raise capital is much shorter than why you shouldn’t. Less than 1% of startups should actually raise. Most founder-run businesses are bootstrapped. We’ve seen great bootstrap companies completely ruined by capital they didn’t need.

Chris Franks: What are the criteria where a founder company should go out and seek capital?

Salvatore Tirabassi: If you are on an express lane to product-market fit—getting adoption and pricing traction early—you could actually take your foot off the gas and self-finance through revenue. If you aren’t in that situation, or if you have a long sales cycle, you need to think about funding to insulate yourself while you figure things out. Many founders are product people, not revenue people. If you’re heads-down in product, you need more money because you’re “learning on the job” regarding sales and messaging.

Chris Franks: Speed is one. Sales cycle is another. I’ll add a third: capital-intensive businesses. If you’re prototyping medical devices, you just need capital.

Chris Franks: How much capital do you need to raise?

Anthony Franco: As much as you can possibly get. Founders underestimate how far capital will take them. Investors often have a more objective perspective; if they offer you 2 million, take it. If they offer 20, take the 20.

Salvatore Tirabassi: Regardless of stage, build a budget for how much and how long things will take, and then double it. Add 100%. You need a solid cushion. You also don’t want to hit the market with a number that lacks credibility. If you ask for 2 million but the investor sees you clearly need 5, you lose authority.

Chris Franks: Founders never say, “I need you to punch up my expense side,” yet it’s one of the most important elements of planning. They guess they can hire a VP of Sales for $36k a year. Have you checked the market rates?

Salvatore Tirabassi: Exactly. Once that money is in, you need to project what it’s worth if you’re successful. I have a calculator on my website for forward dilution analysis. You can put in valuations through Series D to see how much you’ll be diluted over time. It helps level-set: is it enough money, and do I appear credible to the investor?

Chris Franks: Take me through the milestones for each stage.

Salvatore Tirabassi:

• Pre-Seed: Having an MVP in the hands of 3 to 5 “legit” potential buyers who give formalized feedback.

• Seed: Proving product-market fit by selling to someone at near full price who wasn’t part of your initial beta group.

• Series A: You have the mechanics of a P&L that is actually working. You need to be a great networker—offer people things unrelated to your product to build rapport before you need them.

Anthony Franco: Venture capital is counterintuitive. I’ve seen companies get measured on revenue instead of imagination, causing their valuation to drop even as they grow. You have to set aside logic and figure out the investors’ motivation.

Salvatore Tirabassi: It boils down to the credibility of your story. You need a large market opportunity and a viable product. Investors look at pattern recognition—what else has been funded in this space? If you show up with something “unique,” people might assume it isn’t a real thing. You have to convince them differently.

Chris Franks: I advocate for derisking the investment as much as possible to keep the founder in the driver’s seat. Is that fair?

Salvatore Tirabassi: Yes, as long as you manage your runway. Capital raising takes time. You should run parallel paths—maintain a presence in the investment community while you’re working on product-market fit. If you wait until you have the “perfect” result but you’re running on fumes, you lose your leverage.

Anthony Franco: Most VCs aren’t builders; they’re money people. Is that true?

Salvatore Tirabassi: Somewhat. Investors who have seen many cycles recognize patterns, but they aren’t in the trenches building. If a deal goes sideways, junior people on the team may struggle to help you out of the hole. Investors spend their time on successful deals; if you fall out of that “top tier,” you’ll get less attention. You should be prepared to do more on your own if you aren’t the clear winner in the portfolio.

Chris Franks: Where can people find out more about you?

Salvatore Tirabassi: I run a CFO services business at cfoproanalytics.com. We provide full-stack CFO services and business intelligence for emerging companies. I also blog on Substack and LinkedIn, distilling complex financial and analytical topics for general audiences.

Salvatore Tirabassi is a fractional CFO and founder of CFO Pro+Analytics, helping founder-owned and family businesses build the financial infrastructure to grow, delegate, and exit on their terms.

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