// “How Will You Use the Funds?”

I ask, "How will you use the funds?" of every founder I speak to about advisement or investment.

Not every founder answers it well, but often they can put it into a few buckets.

The next question I ask is, "What does your model say you need to raise?"

--This is where the rubber meets the road.--

How they answer the second question tells me if the founder understands what the money raised will do for them, how detail-oriented they are, and how goal-driven they are.

The decision to raise money - and the amount - should not be arbitrary, an estimate, or ambiguous.

It needs to be based on a real need to drive the growth of the business - and the financial model needs to tell that story precisely.

Every dollar needs to be accounted for with a return on the investment assigned.

Here's what investors want to see:

• Clarity: "We're raising $1M to expand marketing, hire a sales lead, and improve our product," isn't enough. Break it down. How much for each? What specific results do you expect?

• Alignment: Your use of funds should match your stage. Seed-stage? Prove traction. Series A? Scale growth. If you're spending on non-critical things (office space, perks), that's a red flag.

• ROI Focus: Show how every dollar fuels growth. "We'll invest $250K in paid ads, expecting a 4x return in 12 months," inspires confidence. Vague promises don't.

Your use of funds is not just a line in your pitch—it's a statement about your vision, strategy, and accountability.