Disclaimer: I've never been involved in fundraising on either side of the table, but I don't think it makes sense to earmark a fixed marketing budget for an ear

Disclaimer: I've never been involved in fundraising on either side of the table, but I don't think it makes sense to earmark a fixed marketing budget for an early stage company. Fixed budgets are good for fixed, predictable costs, but an early stage company needs to experiment, which means variable costs. It may well turn out after the fact that 30-40% of the funding went to marketing, but trying to fix it beforehand is just going to limit the company's flexibility. Once you do have some experimental data, here's how I'd determine the optimal marketing budget in a simplified model: Assume you have i people interested in your product and the conversion rate is c, so you got ic conversions and would like to make this number go up. You do a small marketing campaign and get m more interested people per marketing dollar spent. You also do some product work and improve the conversion rate by d per development dollar spent. You have an overall budget of b and would like to know the share x to be spent on marketing, with the remaining b - x spent on product. The objective function to maximize is (i + mx)(c + d(b - x)). Take the derivative in x and you get m(c + d(b - x)) - (i + mx)d. Set equal to 0 and rearrange to solve for x = (c/d + b - i/m)/2. (The numbers c/d and i/m have a neat interpretation as the amount of money that would have been spent on improving these factors so far, assuming constant m and d.) The second derivative is -2md, so as long as spending more money improves outcomes, x is the optimal marketing spend.