What funding you are requesting and what exactly you'll do with those funds is clearly a central issue. You'll need a clear statement of:
- How much funding have you received to-date, and from where
- Exactly how much funding are you requesting
- Exactly what is the purpose of the funding and what will you accomplish with it
- What is the next step beyond this funding round? (A next equity funding round? Funding from some other source? An acquisition? )
Although you will not want to include a detailed budget in your business plan, you'll certainly need to have done that work, so you have a clear idea of how much funding you'll need.
In determining the level of funding you'll request, it's good to remember that:
- Product development will likely take longer than you think
- There will be problems you didn't expect
- The sales cycle (especially early sales) will likely be (much) longer than you think
- The next financing round will take longer than you think.
So when it comes to sizing the round, estimate how much you really think you'll need, then make some pessimistic assumptions and come up with a larger estimate. The latter is likely to be closer to the right number.