A use-of-funds slide (sometimes "use of proceeds") explains three things: how much you're raising, how you'll allocate it, and — most importantly — what milestones that spending buys before the next round. The strongest ones tie every dollar to a milestone, not a vague percentage, and show the raise buys 18–24 months of runway.
It's one of the most scrutinized slides in a pitch deck because it reveals whether you actually understand the journey ahead. Investors aren't checking your arithmetic — they're checking whether your plan turns their money into a more valuable, more fundable company.
Note: "use of funds" also appears in grant and loan applications as a compliance statement. This guide is about the startup-fundraising version — allocating equity capital against growth milestones.
What a Use-of-Funds Slide Must Contain
- The amount — a specific figure you're raising.
- Allocation by category — in dollars and percentages (product/R&D, go-to-market, team, operations, buffer).
- Milestones per bucket — what each chunk achieves (e.g. "launch v2 + reach 100 paying customers").
- Runway — how many months it buys, ideally to a clear next-round milestone.
- A contingency buffer — typically 5–10% for the unexpected.
The One Rule: Milestones Over Percentages
The most common mistake is presenting abstract splits — "33% product, 33% marketing, 33% team." Even, round percentages signal you haven't actually planned. Investors want concrete dollar amounts tied to outcomes:
Not: "$500K to product."
But: "$500K to engineering → ship v2.0 and onboard 100 pilot customers by Q3."
Every dollar should map to a milestone that de-risks your next raise. Percentages describe; milestones persuade.
Typical Allocation by Stage
Allocations shift as you move from building the product to scaling go-to-market. Rough ranges:
| Bucket | Pre-seed | Seed | Series A |
|---|---|---|---|
| Product / R&D | 15–25% | 30–40% | 25–35% |
| Team / hiring | 60–70% (often the bulk) | 25–35% | (within buckets) |
| Sales & marketing / GTM | 5–10% | 20–30% | 40–50% |
| Operations / G&A | 5–10% | 10–15% | 15–25% |
| Contingency | 5–10% | 5–10% | 5–10% |
The pattern: pre-seed money mostly builds the team and product; by Series A, go-to-market is the largest bucket because you're scaling a proven model. Adjust for your business — deep tech skews to engineering, consumer to marketing, fintech to compliance. These are sanity-check ranges, not targets to copy.
How to Calculate the Runway You're Buying
Amount Raised ÷ Monthly Burn = Runway (months)Tie the figure you raise to the runway it actually buys
Work it backwards. If you burn $150K/month and raise $2M, that's about 13 months — short of the 18–24 months investors expect (many now suggest more, since raising takes longer than it used to). You'd target closer to $2.7–3.6M. Ground this in a real cash flow forecast and burn rate, not a guess.
A Worked Example (Seed, $2M)
- $600K engineering → ship v2.0 and onboard 100 paying customers by Q3
- $400K sales → hire 3 AEs + 1 CS lead, reach $1M ARR by Q4
- $600K marketing → build two repeatable channels at target CAC
- $200K operations → finance, legal, tooling
- $200K buffer → ~10% contingency
Each line states a number and the milestone it buys — exactly what an investor wants to see.
Where It Sits — and Common Mistakes
The use-of-funds slide comes near the end of the deck, right after "the ask." Keep it to one clear slide, usually a chart plus milestone notes. Avoid these traps:
- Even percentage splits (signals no real plan).
- Vague buckets like "operations $200K" with no detail.
- Raising for only ~12 months of runway.
- No contingency.
- Numbers that don't reconcile with the rest of your financial model.
This slide is the bridge between your raise and your plan — see how to secure funding for your early-stage SaaS startup for the full fundraising picture.
Use of Funds FAQ
What is a use-of-funds slide?
A pitch-deck slide showing how much you're raising, how you'll allocate it across categories, and what milestones the spending will achieve before your next round. It demonstrates that you can turn investor capital into a more valuable company.
Should I use percentages or dollar amounts?
Both — but lead with dollar amounts tied to milestones. Percentages alone read as guesswork; specific figures linked to outcomes ("$400K to hire 3 AEs → $1M ARR") show you've actually planned.
How much runway should I raise for?
Aim for 18–24 months to a meaningful next-round milestone; many investors now favor more, because fundraising takes longer than it used to. Calculate it as amount raised ÷ monthly burn.
How should early-stage startups allocate funding?
It shifts by stage: pre-seed money mostly funds team and product; by Series A, sales & marketing is usually the biggest bucket. Always keep a 5–10% contingency and adjust for your industry.
What's the difference between use of funds and use of proceeds?
They're often used interchangeably. "Use of proceeds" is the more formal term (common in loan and securities contexts); "use of funds" is the typical pitch-deck label. Both describe how raised capital will be spent.
