What 2,800 funding rounds reveal about how startups spend money

2026-05-11 · Source: Sifted · Field: Business & Management — Entrepreneurship & Start-ups, Corporate Strategy & Leadership, Operations & Process Management · Depth: Intermediate, short

Summary

Sifted analyzed 2,800 European startup funding rounds to understand how spending priorities evolve from pre-seed to growth stages. The analysis reveals that pre-seed startups allocate 91% of their funds to team and hiring, focusing on securing initial talent. As startups mature, their spending shifts significantly towards marketing and sales, which accounts for 21% of pre-seed budgets but jumps to 30% by Series A and 37% by Series C. Technology and product development remain a consistent priority, consuming 71% of pre-seed funds and decreasing slightly to 56% by Series C. Operational expenses, including legal and accounting, also increase with scale, while real estate and infrastructure costs remain relatively low across all stages, peaking at 10% in later rounds.

Key takeaway

For entrepreneurs planning your next funding round, understand that investors expect a clear evolution in your spending strategy. Your initial capital should heavily favor team building, but as you progress to Series A and beyond, you must demonstrate a significant shift towards marketing and sales to drive growth, while still maintaining robust technology investment. Aligning your budget allocation with these stage-specific priorities will strengthen your pitch and operational efficiency.

Key insights

Startup spending priorities shift from team-centric in early stages to marketing and technology as they scale.

Principles

• Early-stage funding prioritizes team acquisition.
• Marketing spend scales significantly with growth rounds.
• Technology investment remains a core, consistent priority.

Method

Sifted analyzed 2,800 European funding rounds, categorizing startup expenditures across pre-seed, seed, Series A, B, and C stages to identify spending shifts.

In practice

• Allocate initial funds primarily to talent acquisition.
• Increase marketing budget substantially for growth rounds.
• Maintain consistent investment in product development.

Topics

• Startup Funding
• European Startups
• Spending Priorities
• Pre-seed Stage
• Growth Stage

Best for: Entrepreneur, Investor, Consultant

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Editorial summary, takeaway, and curation by AIssential. Original article published by Sifted.