Budgeting for the team you haven't hired yet
Pre-close budgeting is a skill nobody teaches. Here's the framework we use with every Series A customer in their first ninety days.
July 24, 2024 · Maya Laurent
Most early-stage startups build their budget bottoms-up: take the last quarter’s spend, add 10%, extrapolate. It’s fast. It’s also how you end up with four open roles you can’t afford in month eight.
A different anchor
Start with the ARR plan. Work backwards to the gross margin you need to support it. From there, derive the headcount shape. Only then do you allocate cash across functions.
A rough template
| Cost block | Range (as % of burn) |
|---|---|
| Engineering | 50–65% |
| Go-to-market | 15–25% |
| Ops + G&A | 10–15% |
| Tooling & infra | 5–10% |
Numbers inside those ranges aren’t universal. They are the shape a B2B SaaS company at $1M–$10M ARR tends to land on if their plan is working. Outside those ranges, there’s usually a real story being told: aggressive investment into sales, or infra debt coming due.
The deliverable
Your quarterly board deck should show this table twice: once for the budget, once for actuals. If they drift more than ten points in any cell, the board should hear why before they ask.