The Ask Slide: Calculate Funding Amount and Defend Your Use of Proceeds

The Ask Slide: How to Explain Funding Needs in Your Pitch Deck

The Ask slide in your pitch deck is deceptively simple. It is often just one number, yet arriving at that number is one of the most stressful parts of fundraising. Founders wrestle with how to explain funding needs in a pitch deck because they know that number is not just a guess; it is the financial summary of their entire strategic vision. It represents the fuel required to hit the next set of critical milestones.

Getting your ask wrong can mean giving away too much of your company or running out of cash prematurely. This article provides a bottom-up framework for building a credible, defensible ask that shows investors you have a plan, not just a hope. It covers how to calculate your funding needs, articulate your spending plan, and prepare for the tough questions that will inevitably follow.

Part 1: Building Your Ask from the Ground Up

Before you can ask for a single dollar, you must understand a fundamental principle: the Ask is an output, not an input. You do not pick a number that sounds good and work backward. Instead, you build a detailed operational plan that produces the number as its logical conclusion. This approach is central to explaining capital needs to investors effectively.

Start with Milestones, Not a Number

The process begins with milestones. What tangible, measurable goals must you achieve to justify a higher valuation in your next funding round? These goals are the foundation of your entire financial request.

• For a SaaS company, a key milestone might be reaching $1M in annual recurring revenue (ARR).
• For a Biotech startup, it could be completing preclinical in-vivo studies.
• For a Deeptech company, it may be a working prototype that validates core technology.

These milestones define the finish line. They give your fundraise a clear purpose and provide investors with a concrete way to measure your progress and the return on their capital.

The Three Core Cost Drivers

With those goals set, you can build the budget required to reach them. For most Pre-Seed to Series B startups, this plan lives in a spreadsheet, not a complex enterprise system. Your focus should be on three core cost drivers that form the basis of your operational model.

1. People (Headcount): This is almost always the largest driver of your budget. According to a 2022 survey by Burkland Associates, “Payroll accounts for 60-70% of a typical venture-backed startup's spend.” Your hiring plan is the backbone of your financial plan. Map out exactly who you need to hire and when to achieve your milestones. Be specific about roles, from engineers to sales representatives.
2. Go-to-Market (GTM): This category includes all sales, marketing, and customer success costs needed to acquire and retain customers. For a B2B SaaS business, this could include sales commissions, marketing software subscriptions, and conference sponsorships. For an e-commerce brand using a platform like Shopify, it is primarily your advertising spend.
3. Research & Development (R&D) or Cost of Goods Sold (COGS): The nature of this category depends heavily on your industry. For tech companies, this covers engineering tools, cloud hosting, and data infrastructure. For a Biotech company, this is the dominant category, covering lab supplies, Contract Research Organization (CRO) fees, and the direct costs of experiments. A clear understanding of your R&D and COGS is critical.

Building this bottom-up model transforms your ask from a guess into a calculated requirement based on a clear strategic plan. It is the first step in building investor confidence.

Part 2: How Much Funding to Raise

Once you have a milestone-driven budget, the next step is determining the exact funding amount. This process involves translating your operational plan into a financial figure that balances ambition with reality. The key is to secure enough capital to achieve your goals without taking on unnecessary dilution.

Determine Your Runway (18-24 Months)

Your budget provides a projected monthly burn rate, which is the net amount of cash your company spends each month. The first step is to define the time period this funding needs to cover, known as your runway. A common rule of thumb is that “the standard runway target for a funding round is 18-24 months.”

This duration serves two crucial purposes. First, it provides enough time to execute your plan and hit the key milestones you defined. Second, it gives you a sufficient buffer, typically around six months, to focus on raising your next round of funding from a position of strength, not desperation. To calculate your core operating budget, simply multiply your projected average monthly burn by your target runway (e.g., 18 months).

Add a Contingency Buffer (15-20%)

Plans rarely unfold perfectly. As a standard practice, “a contingency buffer of 15-20% should be added to the total budget to calculate the ask.” This buffer is not slush fund money. It is a strategic reserve to cover unforeseen challenges or opportunities. These could include a key hire taking longer to find, an unexpected R&D hurdle, or a competitor’s move that forces you to increase marketing spend. Including this buffer demonstrates foresight and operational maturity to investors.

Sense-Check Against Dilution

Finally, you must test your ask against reasonable dilution expectations. Based on pattern observation, “founders typically sell between 15% and 25% of their company in an early-stage funding round.” You can check your number with a simple formula: Ask Amount / Post-Money Valuation = Dilution %.

For example, if your plan requires a $2M ask and comparable companies are raising at an $8M pre-money valuation, your post-money valuation would be $10M. The resulting dilution is $2M / $10M = 20%, which falls squarely in the target range. If your calculation results in 40% dilution, it may be a sign that your plan is too ambitious for your current valuation or that your valuation expectations are too low. This check helps optimize your ask to fuel success.

Part 3: The Use of Proceeds Story

Investors are not just funding a spreadsheet; they are funding a story of growth. The “Use of Proceeds” section is where you translate your budget into a compelling strategic narrative. This is how you address investor expectations for proceeds. The goal is to show how each dollar contributes directly to value creation, not just how it covers expenses.

From Budget Lines to a Strategic Narrative

This requires a critical distinction: your pitch deck slide should show a strategic growth story, not a line-item budget. The detailed monthly breakdown of costs from your accounting software, whether QuickBooks for a US-based firm or Xero for a UK one, belongs in your appendix for due diligence. The slide itself should group your planned spending into three to five high-level categories that align directly with your milestones. This is best visualized with a simple, clean chart.

For example, a pie chart with three clean slices labeled with their strategic purpose and percentage allocation, such as: Product & Engineering (45%), Sales & Marketing (35%), and G&A (20%).

Example: Use of Funds for SaaS vs. Biotech

The specific categories for your startup use of funds will depend on your business model. Here are two contrasting examples of how to frame your story:

• For a B2B SaaS Company: The buckets would be directly tied to commercial growth and product enhancement. A typical chart might show:
  1. Product Development (40%): Hire 4 engineers to build out enterprise-grade features.
  2. Go-to-Market Expansion (45%): Hire 5 Account Executives and 2 marketers to scale customer acquisition.
  3. Platform & G&A (15%): Upgrade infrastructure and cover operational overhead.
• For a Preclinical Biotech Company: The focus is almost entirely on R&D progress. The buckets reflect scientific, not commercial, milestones:
  1. Lead Compound R&D (60%): Fund IND-enabling studies and process development.
  2. Platform Technology (25%): Hire 2 computational biologists to expand discovery capabilities.
  3. Team & Operations (15%): Cover key scientific leadership salaries and lab overhead.

In both cases, the categories tell a clear story about what the funding will achieve, linking funding to milestones and value-creating activities.

Part 4: Designing and Defending Your Startup Financial Ask Slide

With the hard work of planning and calculation done, designing the startup financial ask slide itself is straightforward. It should be one of the clearest and most concise slides in your deck. Its purpose is to communicate the top-line request and strategy, not to bog the audience down in details.

Key Components of an Effective Ask Slide

An effective Ask slide contains three essential components, presented with absolute clarity:

1. The Ask: A direct statement of the funding amount. For example: “Raising a $2M Seed Round.”
2. The Runway: A simple declaration of how long the funding will last. For example: “To provide 24 months of operational runway.”
3. The Use of Proceeds: A clean visual, like a pie or bar chart, that displays the 3-5 strategic spending categories and their percentage allocations.

That is it. All the underlying detail, such as your hiring plan, GTM budget, and financial assumptions, should be in an appendix. The slide anchors the conversation, while the appendix provides the evidence to support it.

Preparing to Defend Your Assumptions

Presenting the slide is only the beginning. You must be prepared to defend your numbers, as investors will probe the assumptions behind your plan. This is where your bottom-up build becomes your greatest asset. Expect tough questions like:

• “Why do you need five engineers instead of three?”
• “What customer acquisition cost are you assuming for your marketing spend?”
• “Your hiring timeline seems aggressive. What is your recruitment strategy?”

Your ability to answer these questions by referencing your detailed plan, whether it is a simple spreadsheet for a pre-seed round or a full 3-statement model compliant with US GAAP or FRS 102 for a Series B, is what builds credibility. It shows you are not just presenting a number; you are presenting a well-considered plan for growth.

A Credible Ask Signals a Credible Founder

A powerful Ask slide is the product of a rigorous process, not a standalone creation. It demonstrates to investors that you are a disciplined founder who can build a strategy and connect it directly to financial needs. Linking funding to milestones is the most effective way to frame your request and build confidence.

The core steps are clear:

• Start with the milestones you must hit to justify your next valuation.
• Build a bottoms-up budget based on the headcount and resources needed to achieve them.
• Calculate a runway of 18-24 months and add a 15-20% contingency buffer to determine the total ask.
• Translate your detailed budget into a strategic “Use of Proceeds” story with 3-5 key categories.
• Present a clean, simple slide and keep the detailed financial model in your appendix for due diligence.

By following this process, your ask becomes more than a request for money. It becomes a powerful signal of your operational command and strategic foresight, turning one of the most daunting slides into one of your most convincing. See the hub on core financial slides for next steps.

Frequently Asked Questions

Q: How do I calculate the ask if my pre-money valuation is not yet set?A: Focus on your operational needs first. Build your milestone-driven budget to determine how much capital you need to operate for 18-24 months. The ask should be driven by your plan, not a target valuation. You can then test this ask against a range of potential valuations to ensure dilution remains reasonable (typically 15-25%).

Q: What are the most common mistakes on a Use of Proceeds slide?A: The most common errors are being too granular (e.g., listing specific software costs), using vague categories (e.g., "Operations"), having too many slices in the chart (more than five becomes confusing), and failing to connect the spending categories back to the key milestones you outlined earlier in your deck.

Q: Should founder salaries be included in the funding ask?A: Yes, absolutely. Founder salaries are a legitimate operating expense. Investors expect founders to pay themselves a reasonable, market-rate salary to cover living expenses so they can focus fully on the business. This should be built into your headcount plan and monthly burn calculations from the start.