The use of funds slide is essential to your pitch deck when seeking investment. This slide demonstrates to potential investors how you plan to allocate the capital you request to grow your business.
It shows that you understand how to use the funding wisely and reassures investors that their money will be deployed strategically for maximum impact.
Why the use of funds slide matters
Investors are keen to see how capital will be used to drive growth in your business. They want proof that their investment will be used in key areas that lead to measurable results and not wasted on unnecessary expenses.
A well-crafted use of funds slide provides transparency and helps build trust and confidence with investors. By providing a breakdown of spending, you show investors that you have a clear roadmap for growth, with each dollar allocated to areas that will help the business move forward.
Investor expectations
When VCs and angel investors review a use of funds slide, they assess whether the startup is allocating funds efficiently and strategically. They want to see that the spending is aligned with the overall growth strategy and will have a tangible impact on scaling the business.
Investors also look for:
- Clear spending priorities: The allocation of funds should reflect what’s most important for the business at its current stage.
- A connection to key milestones: Investors want to know how the funds will help the company achieve its goals and milestones.
- A balanced approach: The funding should be distributed across areas that drive short-term progress and long-term sustainability.
What this article covers
- The Purpose of the Use of Funds Slide
- Key Elements and How to Structure Them
- How to Visually Present Spending Priorities
- Common Mistakes and Best Practices
- Examples of Effective Use of Funds Slides
Who this article is for
This article is designed for startup founders, entrepreneurs, and business strategists seeking funding and guidance on creating a strong use of funds slide in their pitch deck.
What is a use of funds slide?
The use of funds slide, also known as the use of proceeds slide, outlines how the investment you're seeking will be allocated to support your business's growth. It's an essential part of a pitch deck because it gives investors insight into how their capital will be spent to achieve specific goals and milestones.
By clearly showing how the funds will be distributed across different areas of the business, this slide helps investors understand whether your startup is capital-efficient and focused on high-impact activities that will lead to sustainable growth.
Where it fits in a pitch deck
The use of funds slide is typically placed right after the ask slide, where you specify the amount of funding you request. The ask slide tells investors how much you need, while the use of funds slide explains how you plan to use that money. It bridges the ask slide and your financial projections, connecting the funding request to your growth strategy.
What investors expect to see
Investors look for a few key elements when reviewing your use of funds slide:
- A detailed spending breakdown: This could include percentages or dollar amounts for major spending categories, such as product development, marketing, and hiring. Investors want to see exactly where the money will go.
- A clear link between funding allocation and business growth: Investors want to know that the funds will be used in ways that will accelerate growth and create value.
- A projected timeline for fund deployment: Investors expect to see when and how the funds will be used over time, such as within the next 12 to 18 months. This helps them understand how quickly you intend to move and what milestones you expect to hit due to the funding.
Why the use of funds slide matters to investors
The use of funds slide is important to investors as it informs their funding decisions. It shows them how the funds you're asking for will be allocated to drive the growth of your business.
Investors must feel assured that their money will be used effectively, with a clear return on investment (ROI) and measurable results. This slide helps investors evaluate the strategic planning behind your business, which is essential for gaining their trust.
Key investor questions the slide must answer
When reviewing the use of funds slide, investors are looking for answers to a few critical questions:
- How will the funding be used to achieve key milestones?
Investors want to know that the money will be used to reach specific, measurable goals, such as launching a product, expanding into new markets, or acquiring a significant number of users.
- Does the spending allocation align with business priorities and scalability?
They will assess whether the funds are allocated to the most impactful areas. The spending should align with your long-term strategy and help the company scale.
- How will the investment impact traction, revenue, and market expansion?
Investors want to understand how capital will directly contribute to growing the business in terms of users, revenue, or market presence.
Is the funding balanced across operational and growth needs?
The allocation should cover immediate operational needs and longer-term growth strategies. Overspending in one area, like marketing, at the expense of product development can raise concerns.
Common investor concerns
Investors have several common concerns when reviewing the use of funds slide. Addressing these concerns upfront can help avoid red flags:
- Unjustified spending categories
Investors are wary of large allocations without a clear ROI. For instance, spending a significant portion of the funds on office space without a clear connection to growth can raise doubts about your strategic planning.
- Overspending on non-growth areas
Expenses like high salaries or luxury office spaces may seem indulgent, especially if they aren’t tied directly to scaling the business. Investors want to see that the funds are used to fuel growth, not to make the business comfortable at the outset.
- Lack of strategic planning
Investors want to see how the funds will help you achieve specific milestones. If the use of funds slide lacks a clear link between spending and business growth, they may question the startup’s overall strategic approach.
Main elements of a use of proceeds slide
A well-structured use of the proceeds slide should include several key components that are both clear and investor-friendly. These elements ensure that your spending is transparent, well thought out, and connected to your growth strategy.
Fund allocation breakdown
Investors expect to see how the funds will be allocated across various major spending categories. These categories might include:
- Product development (engineering, R&D, feature expansion)If: you're in the early stages of product development or improving existing features, a large portion of the funding should be allocated here.
- Marketing and customer acquisition (ads, partnerships, branding): Marketing is often one of the most crucial areas for growth. Showing how funds will be spent on customer acquisition can demonstrate a clear path to increased traction.
- Hiring and team expansion (new hires, leadership, recruiting costs): Investors want to know how the team will grow. Strategic hires, especially in leadership roles, can signal your plan for scaling operations.
- Operations and infrastructure (logistics, cloud services, manufacturing): Operational costs like cloud services, software, and logistics are critical for supporting growth and ensuring the smooth running of day-to-day activities.
- Sales and business development (B2B partnerships, distribution): Funding for sales and business development can highlight efforts to expand your reach and build partnerships to drive revenue.
Percentage and dollar allocation
Investors typically expect a precise percentage-based and monetary distribution of how you plan to spend the funds. It is easy to understand. You can have a break like this:
Example:
40% ($400,000) – Product Development
30% ($300,000) – Marketing & Sales
20% ($200,000) – Hiring
10% ($100,000) – Operations
Deployment timeline
A deployment timeline is crucial for showing how the funds will be used over time. Investors want to understand when you plan to deploy the funds and what key milestones are expected.
For example:
“$500,000 for product launch in Q2 2025”
"$200,000 for customer acquisition campaigns over the next 6 months."
Including key funding milestones in your timeline allows investors to track progress and understand when results will be achieved.
Expected impact on business growth
Lastly, explain how each spending category will contribute to the business' growth and why it is essential. Investors want to be assured that their money will help the business grow, resulting in more profits.
For example:
- Marketing spend: Expected user acquisition growth could lead to more revenue and customer data for future product development.
- Hiring: Strengthening customer support and operations to handle growing demand.
This shows a clear connection between funding allocation and the desired growth outcomes.
How to present the investment and use of funds slide effectively
Now that you understand the elements of the use of funds slide, it's time to ensure that it is structured for maximum clarity and impact.
Best practices for presentation
Use visuals, pie charts, bar graphs, or tables. Investors prefer data visualization over text-heavy slides. Visuals help them understand where the funds will be spent and the proportions of each category simply.
- Be concise and transparent: Avoid unnecessary details. Focus on the strategic allocation of funds and be clear about the amounts and milestones. Investors appreciate clarity and transparency.
- Ensure alignment with financial projections: The fund allocation should align with your revenue and growth projections. For example, if your forecasts show rapid growth, your use of funds should demonstrate how you’ll scale to meet that growth.
Common mistakes to avoid
- Unrealistic spending allocations: Investors will question an unwise allocation, such as spending 70% of the funds on marketing without developing a product. Ensure the spending breakdown is logical and balanced.
- No timeline for fund deployment: If there's no clear timeline showing when and how the funds will be deployed, investors may hesitate to invest. They need to know that the capital will be spent effectively over time.
- Vague categories like ‘General Expenses’: Avoid using unclear categories. Investors need specific details on where their money will go. Phrases like “general expenses” are too broad and don’t provide insight into how the funds will be used.
How to justify funding allocation convincingly
When presenting your use of funds slide, outline each category where the funds will go and how much will be allocated to each. Also, justify your allocation.
Investors will want to know why you've decided to allocate funds in specific areas and how these decisions align with the potential for growth and return on investment (ROI). Providing data-backed reasoning helps make your case compelling and credible.
Benchmarking against industry standards
One of the most effective ways to justify your funding allocation is to compare it to industry benchmarks. Investors are more likely to trust your allocations if they align with what is typical for startups at your stage or in your industry. This helps demonstrate that you understand the competitive landscape and make informed, strategic decisions.
Pointing to past successes is an effective way to justify your funding allocation. If your startup has already received funding or spent money, use this history to show how those funds have been used efficiently to achieve specific, measurable outcomes.
Investors want proof that your team has and can responsibly manage capital to achieve significant positive results.
Market conditions and competitive positioning
Justifying your funding allocation requires a deeper understanding of market conditions and your startup's competitive positioning.
If you're allocating significant funds to specific areas such as R&D or sales expansion, explain how these investments will help you capture market share or differentiate from competitors.
How to present the use of funds slide for pre-revenue startups
The use of funds slide presents unique challenges for pre-revenue startups. Without revenue, it may not be easy to demonstrate immediate ROI from the funding.
However, you can still effectively present a compelling case by focusing on milestone-driven spending, showcasing efforts to validate your product and establish product-market fit, and explaining how this investment will position the startup for future success.
Focus on milestone-driven spending
When your startup has not generated revenue, investors will want to understand how the funds will drive specific, tangible milestones that set you up for growth.
Without revenue, focus on key developmental milestones that will directly lead to traction and validation of your business model.
his approach helps investors see how each dollar will be spent to create significant value and prepare the business for revenue generation.
Highlight customer validation efforts and product-market fit initiatives
In the early stages, customer validation and establishing product-market fit are some of the most critical tasks.
Investors will want to know that you've done the necessary groundwork to confirm there's demand for your product and that you're making strategic investments in activities that move you closer to securing that elusive product-market fit.
Show how investment leads to traction and prepares for future fundraising rounds.
In a pre-revenue startup, showing that the investment will lead to short-term milestones and help set the stage for long-term traction and future fundraising rounds is essential.
Startups are often in an iterative phase before they achieve product-market fit, and investors want to understand how the funds will position you for future growth, funding, and scaling.
Use of funds slide example.
Here are a few real-world examples of a use of funds slide:
Shopify
Shopify's slide here uses percentages to show operating expenses, which makes it easy to understand. The slide also demonstrates the company's efficient use of resources and financial health.
This approach instills confidence in potential investors by highlighting Shopify's disciplined financial management and strategic investment focus.
WeWork
WeWork's presentation here outlines its financial strategy and showcases revenue and expense allocations. It utilizes visuals to illustrate how the funds have been allocated, making it easier to understand.
Airbnb
Airbnb's slide here during its early pitch deck used a simple table with three key allocation areas: product development, marketing, and operations. Each category included a percentage breakdown and a one-line explanation.
Visuals were compelling because Investors could immediately see where their money would go.
Nextview
This slide from NextView is a structured table format, projecting key financial metrics and expenses over eight quarters, from Q1 2016 to Q4 2017.
It provides clarity and transparency. The slide here inks fund allocation to business objectives like scaling operations and customer acquisition.
Detailing cash burn and total expenditures reassures investors of thoughtful planning and financial foresight. This makes it easy to understand how funds will drive growth and achieve milestones.
Slidebean
This slide here features a clean, minimalist design. It has bold icons and space for the three key budget allocation categories. Its simple layout effectively communicates critical funding priorities without overwhelming the audience.
Focusing on three main areas highlights the most vital funding, making it ideal for capturing investor attention and conveying financial plans.
Final checklist for an investor-ready use of funds slide
A well-structured slide can make all the difference when presenting your pitch. Therefore, before submitting your presentation, ensure you look at the following:
1. Is the fund allocation clearly broken down by category?
- Ensure the slide clearly outlines how the funds will be divided in the business. Consider each category: product development, marketing, hiring, operations, and sales.
- You can then break down each category into specific items and allocate how much to each item.
Tip: Avoid vague categories such as general expenses. Investors want transparency, so make sure each spending category has a clear, actionable explanation.
2. Does the slide include a percentage or dollar distribution for spending?
- Investors expect to see the amount of money you allocate to each category. Ideally, this should be shown as a percentage and a dollar amount.
Tip: The percentages should add up to 100%, and the dollar amounts should match your requested funding.
3. Are spending priorities aligned with business milestones and growth strategy?
- The allocation should reflect your strategic priorities. For instance, if you're in an early-stage product development phase, most of your funds should be directed toward building and testing your product.
- Ensure the spending breakdown aligns with the growth strategy and helps achieve key milestones.
Tip: If your business plan shows that reaching specific user acquisition goals is critical to growth, allocate significant funds to marketing and customer acquisition. If scaling operations is the priority, focus more on hiring and infrastructure.
4. Does the slide justify spending with metrics, milestones, or industry benchmarks?
- Investors want a clear justification for how the funds will be used. Metrics, milestones, or comparisons to industry benchmarks can support this.
Tip: Always link your allocation to a tangible outcome that investors can relate to. Demonstrating that similar startups have succeeded by spending in these areas strengthens your case.
5. Is the visual presentation clean, professional, and easy to understand?
- Investors typically review dozens of pitch decks, so make sure your use of funds slide is visually appealing and easy to digest.
- Use visuals such as pie charts, bar graphs, or tables to present the information clearly.
Tip: Keep the design simple and use easy-to-understand graphics. Avoid clutter and focus on the core details that matter.
Conclusion
The use of funds slide is an essential tool that helps you gain investor confidence. It shows that you understand how to allocate capital efficiently and strategically. You'll increase your chances of securing funds by ensuring clarity, transparency, and alignment with your growth strategy.
If you need help perfecting your pitch deck, including using funds and slides, consider consulting with pitch deck funding consultation services.
