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How do investors expect founders to spend cash?
A key element of your company that many investors consider when determining whether to back you is how you manage money. A big part of this is ensuring that you are spending on things that help the company move forward and increase the value of the business.
Many founders (especially first-time founders) spend on things that aren’t vital to the core business. Here are some general guidelines that you should use when determining how to spend based on what investors will be looking for.
This advice doesn’t apply to deep tech companies. It is primarily for SaaS businesses.
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Don’t spend pre-revenue and pre-raising. Most investors hate founders that overspend early on. With AI making it easier to build products and social media helping to attract customers, there isn’t a reason to spend more than $10k to bring a product to market and find product-market fit.
Don’t buy a tech team. You shouldn’t need more than two developers max until you have product-market fit. Those individuals should be on your founding team. If you need to hire developers before you reach product-market fit then there is significant risk in your company that those employees could leave and the company won’t be viable.
Don’t hire full-time. If you don’t have revenue or funding, you should use contractors. People with expertise that you can buy instead of full-time team members, that can be more expensive and often need to learn on the job.
Don’t spend on marketing till you have a proven channel. Most founders waste money “testing” marketing. You should be able to find a channel that works at a low/negligible cost, then pour money into it once you’ve proven it works.
Do you follow these spending rules? |
Marketing That Moves Itself
Most measurement tools stop at telling you what happened. BlueAlpha tells you what to do next.
BlueAlpha unifies MMM, incrementality testing, and AI-driven optimization into a single continuous feedback loop. Models feed actions, actions feed models, and growth compounds.
No dashboards to decipher. No manual analysis. Just weekly, campaign-level recommendations you can trust.
Brands using BlueAlpha have cut CAC, saved millions in wasted spend, and unlocked double-digit growth within weeks, powered by the same team that scaled Tesla’s marketing systems.
Are you looking to grow your business? Here is how I can help:
📱 Book a Strategy Call to get 1:1 feedback on your pitch, pitch deck and/or fundraising strategy. (If you need general startup advice, then reply to this email, and I’ll let you know if/how I can help.)
Onwards and Upwards,
