I read a very interesting article in Mass High Tech on properly sizing your funding when going for VC / Angel money. It was written by Justin Perreault from Commonwealth Ventures. I am pretty sure I submitted a plan to them when I was trying to start my own venture. I never heard anything back, but I will not hold that against them
There is one statement that really got my attention. “..since most companies raise multiple rounds, it is always critical that the funding be used wisely to reach important milestones that subsequent investors will recognize.” In my experience one of the questions that will cause heartburn during discussions is “what did you do with the money you raised in the previous round?”. You would be surprised how many people seeking investors can’t answer that question.