Chris Dixon General Partner Andreessen Horowitz, angel investor and former entrepreneur
The short answer for how much seed money to raise is “ enough to get [a] startup to an accretive milestone plus some fudge factor” of say, a 50% round size increase.
““Accretive milestone” [means] getting [a] company [where it] can raise money at a higher valuation” and is a function of market conditions and the startup’s nature. “As a rule of thumb,  a successful Series A is one where good VCs invest at a pre-money [valuation] that is at least twice the post-money of the seed round. So if [a] seed round  raised $1M at $2M pre ($3M post-money valuation),  the Series A  should be  a minimum of $6M pre (but hopefully  significantly higher).
The worst thing a seed-stage company can do is raise too little money and only reach part way to a milestone. Pitching new investors in that case is very hard; often the only way to keep the company alive is to get the existing investors to reinvest at the last round valuation (“reopen the last round”). The second worst thing  is rais[ing] too much money in the seed round , hence taking too much dilution too soon.”
A startup should determine its expected biggest risk and how to eliminate that risk. “For consumer internet companies [and SMBs (small/medium businesses)], eliminating the biggest risk almost always means getting “traction” – user growth, engagement, etc. For online advertising companies you probably want revenues. If  selling to enterprises you probably want  credible beta customers.
The biggest mistake founders make is thinking that building a product by itself will be perceived as an accretive milestone. Building a product is only accretive  where there is significant technical risk ”. Chris Dixon What’s the right amount of seed money to raise? Dec. 28, 2009; http://cdixon.org/2009/12/28/whats-the-right-amount-of-seed-money-to-raise/