An entrepreneur I know is thinking of leaving his current company to start a new one. He asked me how much money he should raise.

I told him he should either raise a small amount of money or raise a very large one. A small round will be easier to raise, as you need only one VC. But, you’ll have to pick judiciously which milestones you can hit. You can’t get them all.

A large round can give enough cushion to hit more milestones, but it will take longer to find two VCs. And, if you raise a large round and things don’t go swimmingly well, the next round could be a down round.

I also advise founders to pull together an operating budget and then add a 30% to 50% cushion in case progress slips. And, it usually does.

Last, I encourage entrepreneurs to usually start with a smaller round. Then, if demand is there, increase the round’s size. As with an IPO, you always lead with a smaller number. The optics look better. It is easier to grow the financing from a small number to a larger one. It is harder to retreat from a big number because it signals that you couldn’t find enough demand.

So, there’s never a right or wrong answer here, but it’s always about “The Horse-race between Fear and Greed.”  Fear means the risk of running out of money too early. Greed is minimizing founders’ dilution. It’s a never-ending balance for the entrepreneur.