Capital allocation for tech startups
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How do the startups that raise millions of dollars spend that money? Like what do they spend it on? I understand like $1-10 million. But how can a team of like max 50 people need like $50 million? Only thing I can think of is advertising. I am currently running my second tech startup, and it is angel funded. But what would I ever need that much money for?
Enlighten me.
>>1013403
Advertising. Shit that they file under miscellaneous expenses that isn't actually 'miscellaneous', but is basically 'using company money for personal pleasure'.
>>1013405
So basically advertising and unnecessary perks?
Unbelievable. I can't even spend $50k on my company without worrying about it being a good investment, even though I'm relatively well funded.
There is a sweet spot in advertising. And unless you are planning a national expansion instead of targeting specific areas, millions of dollars are way too high.
>>1013403
Just because your company is valued at X$ doesn't mean you spend X$.
>>1013409
Yes, but a Billion dollar company that gives out 5% of equity in a round is still raising $50 million. Even companies like Docusign are raising tons of money.
