Complete seed stage burn rate benchmarks for 2025. Learn how to scale your team, invest in go-to-market, and manage burn while pursuing product-market fit.
Seed stage represents the critical transition from product validation to product-market fit (PMF) and early scaling. Unlike pre-seed, where lean operations dominate, seed-stage companies strategically increase burn to accelerate growth, build out teams, and invest in go-to-market strategies. The key challenge is scaling burn rate in alignment with traction, avoiding the trap of premature scaling that killed countless 2022-2023 startups.
According to Carta's 2024 Seed Stage Report, median seed-stage burn rates now range from $80,000 to $200,000 per month, with most companies clustering around $120,000-$150,000 monthly. This represents a 20-30% decrease from 2021 peaks but higher than pre-seed by 2-3x, reflecting intentional team expansion and market investment.
Industry dynamics fundamentally shape appropriate seed-stage burn rates:
Typical Monthly Burn: $100,000-$180,000
B2B SaaS companies at seed typically scale to 8-15 employees, including 3-5 engineers, 2-3 go-to-market hires (sales, marketing, customer success), and operational roles. The burn breakdown looks like this:
High-end burn ($150K-$180K/month) typically includes senior engineering hires, aggressive customer acquisition, or competitive markets requiring faster execution.
Typical Monthly Burn: $120,000-$200,000
Enterprise SaaS burns higher than SMB SaaS due to longer sales cycles, need for solutions engineers, and emphasis on customer success to prevent churn. Many enterprise seed-stage companies allocate 40-50% of burn to go-to-market versus 30-35% for product-led SaaS.
The additional burn funds field sales reps ($150K-$200K OTE), solutions engineers ($140K-$180K), and enterprise marketing (conferences, ABM campaigns, analyst relations).
Typical Monthly Burn: $120,000-$250,000
Consumer companies show the widest variance, with burn driven almost entirely by user acquisition costs (UAC). Successful consumer founders at seed have validated core retention metrics (D1/D7/D30) and now invest heavily in paid acquisition to find scalable channels.
A typical consumer seed burn includes $40K-$80K/month in paid acquisition (Meta, Google, TikTok), $50K-$90K in engineering and product, $20K-$40K in content and community, and $10K-$20K in operations.
Marketplaces face additional complexity with two-sided burn. Smart marketplace founders focus 70% of acquisition spend on the constrained side (usually supply), using manual outreach and partnerships rather than pure paid ads to keep burn manageable.
Typical Monthly Burn: $130,000-$220,000
Fintech burn rates exceed typical SaaS due to regulatory compliance, security infrastructure, fraud prevention, and customer acquisition in a crowded market. Seed-stage fintech companies typically allocate:
Typical Monthly Burn: $150,000-$300,000
Hardware and deep tech startups burn significantly more at seed, driven by prototyping costs, manufacturing tooling, longer R&D cycles, and specialized talent. According to NFX, hardware founders should plan for 24-30 month seed runways versus 18-24 months for software.
A hardware seed burn includes $70K-$120K/month in engineering (hardware, firmware, and software engineers), $30K-$80K/month in prototyping and manufacturing, $15K-$30K/month in supply chain and operations, and $20K-$40K/month in regulatory and testing.
Typical Monthly Burn: $140,000-$250,000
AI infrastructure startups face elevated burn rates due to compute costs, specialized ML engineering talent, and research-intensive development. A typical AI seed burn allocates $70K-$120K/month to engineering (ML engineers command 20-40% premiums), $20K-$50K/month to cloud and compute (training, inference, data pipelines), and $30K-$50K/month to go-to-market.
Application-layer AI companies (using third-party models) burn closer to standard SaaS rates, while infrastructure and model developers burn at the high end.
The transition from pre-seed to seed fundamentally changes team composition and burn rate:
The optimal hiring sequence at seed depends on your primary constraint:
Product-Constrained (Need to Build Faster):
Market-Constrained (Have Product, Need Customers):
Most successful seed-stage companies balance product and GTM, growing both functions in parallel but weighted toward their primary constraint.
Median Burn: $150,000-$220,000/month
SF continues to show the highest seed burns, driven by talent costs. A 10-person team in SF burns $120K-$180K in salaries alone, versus $80K-$130K for equivalent talent in Austin or remote markets.
However, SF proximity to customers (for B2B), investors, and talent can accelerate growth enough to justify the premium for certain startups.
Median Burn: $130,000-$200,000/month
NYC burn rates track 10-20% below SF, with slightly lower engineering salaries offset by similar GTM costs (sales and marketing compensation is location-agnostic).
Median Burn: $100,000-$160,000/month
Tier 2 US markets offer 25-35% lower burn rates than SF/NYC while maintaining access to experienced talent. Many 2025 seed-stage companies default to these markets or remote-first models to maximize runway.
Median Burn: $90,000-$140,000/month
Remote-first seed companies can hire globally, accessing senior talent in lower-cost markets. A senior engineer in Poland, Portugal, or Mexico often costs $80K-$120K versus $150K-$220K in SF, reducing burn by 30-50% without sacrificing quality.
However, remote companies face hidden costs: team offsites ($10K-$25K quarterly), collaboration tools, and sometimes slower execution due to time zone challenges.
The relationship between burn rate and PMF is critical at seed stage:
Before achieving product-market fit, burn should remain relatively conservative. Premature scaling—hiring aggressively before PMF—is the leading cause of seed-stage failure.
Target burn: $80K-$130K/month
Focus spending on product iteration, customer development, and small-scale GTM experiments. A lean engineering team plus one GTM generalist can move quickly while preserving capital for post-PMF scaling.
Once you've achieved PMF (strong retention, organic growth, positive customer feedback), intentionally increase burn to accelerate growth before competitors establish market position.
Target burn: $130K-$200K+/month
Hire aggressively in areas with proven ROI: if paid ads are working, hire growth marketers; if sales outreach is converting, hire SDRs and AEs; if product is the constraint, expand engineering.
The standard seed runway target is 18-24 months, longer than pre-seed's 12-18 months. Here's why:
Seed-stage companies need time to find product-market fit, iterate on go-to-market strategies, and build enough traction to raise Series A (typically $1M-$3M ARR). Achieving this in under 18 months is possible but uncommon, especially for first-time founders.
Additionally, Series A fundraising takes 4-6 months, meaning you should start raising when you have 9-12 months of runway remaining to avoid desperation.
Twenty-four month runways provide flexibility to experiment, pivot if needed, and optimize Series A timing. According to Y Combinator, founders who raise Series A with 12+ months of remaining runway achieve 20-25% higher valuations than founders raising with under 6 months.
Use this formula:
Runway (Months) = (Total Seed Capital × 0.92) ÷ Average Monthly Burn
The 0.92 multiplier accounts for one-time expenses (legal, recruitment, signing bonuses) that consume approximately 8% of the round.
Note: "average" monthly burn is critical—you might start at $70K/month and ramp to $120K/month as you hire, averaging around $92K.
At seed stage, investors increasingly evaluate burn multiple: the ratio of capital burned to net new ARR generated.
Burn Multiple = Net Burn / Net New ARR
If you burn $120K/month ($1.44M annually) and add $720K net new ARR, your burn multiple is 2.0x ($1.44M / $720K = 2.0). This is solid efficiency for a seed-stage company.
If you burned $1.44M but only added $360K ARR, your burn multiple is 4.0x—a signal you're scaling costs faster than revenue, which will hurt Series A prospects.
Warning signs your burn is unsustainable:
If you're burning six figures monthly but lack clear PMF indicators (strong retention, organic growth, positive unit economics), you've likely over-hired or invested prematurely in growth channels.
Burn should scale with revenue, not ahead of it. If burn is growing 15%/month but revenue is flat or growing 5%/month, you're on track for a down round or bridge financing.
If you have fewer than 12 months of cash, you should already be in fundraising mode or implementing immediate cost cuts. Most seed extensions or bridge rounds happen because founders waited too long to address runway issues.
If your CAC payback exceeds 18 months or LTV:CAC is below 2:1, increasing burn to "grow faster" will only accelerate your path to insolvency. Fix unit economics before scaling spend.
Every hire should unlock new capabilities or accelerate progress on critical paths. Avoid "nice to have" hires like executive assistants, office managers, or junior generalists who provide coverage but not leverage.
For specialized needs (design, data analytics, recruiting), use contractors or fractional executives rather than full-time hires. A fractional CFO costs $5K-$10K/month versus $15K-$25K/month for full-time.
At seed stage, you have leverage to negotiate: AWS/GCP credits through accelerator programs, startup discounts from Salesforce, HubSpot, and other SaaS vendors. These savings can reduce burn by $3K-$8K/month.
Review burn monthly but set budgets quarterly. This forces intentional spending decisions and prevents slow drift toward unsustainable burn rates.
Break down burn into Engineering, GTM, Operations, and Other. If one function is growing disproportionately without corresponding output, you've identified waste.
Your round size should align with your burn rate and runway targets:
Target Burn: $60K-$85K/month
Runway: 12-18 months
Smaller seed rounds require conservative burn. Founders typically remain lean (5-8 employees), prioritize capital-efficient growth, and plan for Series A at $500K-$1M ARR.
Target Burn: $90K-$140K/month
Runway: 18-24 months
Standard seed rounds in 2025. Founders can hire strategically (8-12 employees), invest in early GTM, and target $1M-$2M ARR for Series A.
Target Burn: $130K-$200K/month
Runway: 20-24 months
Larger seeds support aggressive scaling in competitive markets. Expect to build a 12-18 person team, invest heavily in GTM, and target $2M-$3M ARR for Series A.
Smart founders phase burn rate increases with milestone achievements:
Target Burn: $80K-$120K/month
Stay lean while iterating toward PMF. Hire slowly, focus on product and customer development, run small GTM experiments.
Target Burn: $110K-$160K/month
Once PMF is clear, increase burn to scale proven channels. Hire 2-4 additional team members in high-ROI functions.
Target Burn: $130K-$190K/month
Formalize processes, build GTM playbooks, expand team to 12-18 people. Focus on consistent execution at scale.
Target Burn: $140K-$200K/month
Optimize metrics for Series A (ARR growth, net retention, gross margins), build executive team, establish board rhythms.
Use ICanPitch's runway and burn rate calculator to model different hiring plans, compare your burn against industry benchmarks, and optimize your path to product-market fit and Series A readiness. Get data-driven insights for your specific stage and market.
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