

Ask HN: Early Stage Fund Allocation: What is it Put Towards? - wallawe

What proportion of money is put toward what types of things in seed/early stage startups? It will obviously vary depending on the company but I would like to see (in a pie chart even better) how much typically goes to marketing, bringing on new employees, servers, etc.
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benologist
Salaries ... everything else is (usually) tiny by comparison. Conferences can
get expensive if you're going to a lot with flying/hotels.

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wallawe
So you're saying that an early stage company trying to grow exponentially is
spending the majority of its early funding on salaries? I find that hard to
believe. Especially for some of the biggest tech players in the industry
today.

I'm trying to figure out the nuances of spending for these companies in their
early stages and how important certain things are relative to others. As a
founder, what would you have spent more money on and what less?

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benologist
People cost a lot. We raised a bit of money, and about 80% of our budget is
for salaries.

We spend a few grand a month on hosting and services, and all of that is less
than a single month's pay for someone.

Computers and software ... unless you're using some very expensive software
it's not even going to add up to 1 month's salary for a person.

Office rent etc is negligible compared to the people in that office.

It's not even a competition really ... one person can cost you more than your
hosting, office space and computers and stuff combined, and you're probably
hiring more than 1. You don't even have to go to extremes and hire a ton of
people like silverbax88 mentions, if you're hiring 5 people that's 100s of
thousands of dollars.

