Sifted Talks

November 10, 2021

Where should scaleups be spending their cash? 7 insights from our panel

A mahogany office might sound great, but experts from Dawn Capital, Soldo, Aiven and Mews told a recent Sifted Talks that there are better ways to splurge

Steph Bailey

5 min read

When you’re raising funds as a startup or scaleup, your options are limited. But when it comes to spending, your options can seem infinite. 

Given European startups raised over €49bn from VCs in the first half of 2021 — three times more than the same period in 2020 — what are the most important things for growing companies to spend cash on? 

We peeked into scaleups’ bank accounts and asked the experts what’s worth the money and how spending priorities have shifted throughout the pandemic. Our panel included:

  • Josh Bell, general partner at VC Dawn Capital 
  • Carlo Gualandri, founder and chief executive of spend management platform Soldo
  • Julian Lange, chief financial officer of Aiven, which helps companies manage open source projects  
  • Pavla Munzarova, chief financial officer of Mews, a property management system for hotels  

1/ Before you spend, make sure your money is safe

For Lange, one of the top things he has conversations with founders about is how to make sure newly raised money is kept in a safe place. 

He said companies may for the first time have $100m+ in their bank account, so it is imperative to have a plan on how to keep it there — without building up lots of interest — before you go on a spending spree. 

Before you actually spend anything, make sure you don’t have a leaky bucket… where do you park the money? How do you invest it so it doesn’t incur negative interest? Do you have enough controls around the cash?” — Julian Lange, Aiven

2/ Make sure you have the right chief financial officer (CFO)

Gualandri said the goal when spending money is to convert it into value and not waste it, therefore having the right CFO is vital to guide a company in the right direction.

He added your CFO should know where the scaleup is going and ensure other teams stay responsible. “They are the pillar,” he said, so they must support the team and the rest of the company must support them. 

It’s not just 'let’s play with some money when you get into the 100 millions', it’s serious stuff, so you have to have the right maturity in place… the maturity of the CFO is one of the most important things” — Carlo Gualandri, Soldo

3/ Invest in the right people

According to Bell, at least half of the money being made from Series B or Series C fundraising is going to be spent on people. He said this is the best way to grow a company, so taking time to hire the right staff is vital.

For example, for Lange, it is important to hire people who can adapt to a startup’s culture if they come from a corporate background.

Bell added making sure you have a chief talent officer (or someone with a similar title) that has gone through a scaleup before can be helpful, as well as utilising headhunters and search firms. 

Getting the right talent to grow the journey is never a false economy. The biggest challenge we see is where companies raise a bunch of money and then don’t grow the team appropriately and then can’t deliver on the growth side, they invest in the wrong people or take too long to do it” — Josh Bell, Dawn Capital

4/ Spend money on tech early on

When thinking about what to spend on, Munzarova recommended tech. She said Mews spent money on ramping up the tech it used internally during the pandemic, including customer-related tools that were no longer working for the company. 

She added that investing in tech early is a good idea because setting everything up is not an easy job and it can be more difficult to switch things up further down the line.

It’s important to think about technology early on because as we were scaling we had different tools in the teams and they were not good enough or complex enough for us anymore” — Pavla Munzarova, Mews

5/ Think about your return on investment

Bell noted that scaleups often have a short amount of time to achieve growth before they need to return to investors or other sources of finance for more funding. So when spending, he said think about return on investment. 


In simple terms, this means unnecessary spend items are those that don’t — or won’t — create revenue. 

Certain red flags are very early on in journeys where C-level teams all fly around business class or more. Is that really necessary in terms of marginal cost relative to the impact you can have?” — Josh Bell, Dawn Capital

6/ Save a little on the office, but spend on alternatives

Speaking of unnecessary spending, Bell said a blingy office isn’t needed and can actually be a red flag: “The level of mahogany perhaps isn’t a good signifier for investors coming in.” 

Lange agreed, adding he asked his employees whether they wanted to come into the office and a lot of them said they did, but less often. As a result, he said, spending on team building and things to make home offices more comfortable can be a better investment than a jazzy head office.  

You don’t need as much space and maybe that space looks a bit different, more collaboration space, more quiet space than what the traditional office looked like when you went in every day” — Julian Lange, Aiven

You can watch the full Sifted Talk here:

Steph Bailey

Steph Bailey is head of content at Sifted. Follow her on Twitter and LinkedIn