A milestone-driven, needs-based approach to determining the right amount to raise in a seed round requires building a financial model, adjusting for real-world scenarios and considerations, adding a fudge factor, and accounting for optics.

But before you get that far, there is one additional factor to consider to determine the right amount of seed capital to raise: an honest reflection on your fundraising ability.

Numerous dimensions can affect an entrepreneur’s capacity to fundraise: experience in both depth and relevance, amount of traction in the business to date, industry category, geography, accelerator involvement, and so on. Fundraising is rarely easy, but it can be much less difficult for some than for others.

So how do you weave these many factors, especially your ability to fundraise as a founder, into a headline “target” for your seed fundraise deck?

Let’s first consider a correlation between effort (on the x axis) resulting in more capital raised (y axis).

At first, fundraising goes slowly (…until it goes fast), as it takes a while to set the direction for prospects and to work through the kinks in the story and pitch. Those first few days and maybe weeks won’t yield much capital if any at all:

But soon, for any successful fundraising effort, the more effort you put into fundraising, the more results it will yield in meetings and eventually in capital:

Spreading your network broader to pitch more potential investors will inevitably result in more capital being available:

So far, this is somewhat expected – if it’s a good team, product, and market, then effort in translates into results out. However, this is where the model becomes crucial. At some point, an entrepreneur begins to exhaust her network, and her network’s network, and the incremental hours devoted to fundraising will begin to yield less capital raised than the previous.

There begin to be diminishing returns to devoting more time to fundraising:

Eventually, a founder reaches a point where, given the state of the company, the team, and the traction to date (and all of the various factors), more time devoted to fundraising just isn’t worth it.

This means there is a theoretical “maximum” amount an entrepreneur can raise in the seed stage at any point in time. For some, it may be just a couple hundred thousand, and for some, it may be $1M or $2M, or for others $5M, or even more.

Here’s the biggest takeaway in this exercise:

DON’T GET TO THAT POINT.

That point of diminishing returns is NOT actually the magic number you want to raise. Instead, your magic fundraising number is actually the one which corresponds to approximately 80% of effort devoted to reach that highest point. Right when the curve begins to bend and fundraising begins feeling increasingly difficult is the moment where you’re better off ending your fundraising process and devoting the entirety of your attention to building the business.

At this point, a founder/CEO’s energy should be focused on efforts that will increase their ability to raise capital in the future, which is now best done through accomplishing key business milestones rather than more legwork on an existing fundraise.

Of course, it’s impossible to know before embarking on a fundraising process — seed or otherwise — what that exact, optimal fundraising target should be. But the above heuristic does force you to ask the right questions. The point is not to ask, “What’s the most seed capital I can raise?” but rather, “What’s the most amount of seed capital I can raise without increasing difficulty?”

The answer to that question provides the most useful data point to then answer the real question: “How much seed capital should I try to raise?”

The goal of fundraising shouldn’t be about maximizing dollars raised, but rather optimizing the balance between effort and amount.