How Much Does It Cost to Start a SaaS Company in 2025? (Real First-Year Budgets)
Starting a SaaS costs $35K-$150K first year. Complete budget breakdown: development, marketing, tools, legal. Bootstrapped, funded, and well-funded scenarios from 50+ startups. Updated Nov 2025.
You have a SaaS idea. You're ready to start. But how much money do you actually need?
After working with 50+ SaaS founders over the past decade, I can tell you: most founders dramatically underestimate total startup costs.
They budget $30K for development, then run out of money before launch because they forgot about hosting, legal, marketing, tools, and a dozen other expenses.
Or they raise $200K, burn it all in 6 months on over-hiring and fancy tools, and have nothing to show for it.
This guide breaks down exactly what it costs to start a SaaS company in 2025, based on real data from founders I've worked with. You'll see complete first-year budgets at three funding levels, what to prioritize, and how to avoid the expensive mistakes I see every week.
Quick Answer: Cost to Start a SaaS Company in 2025
Here's what you'll actually spend to launch and run a SaaS company for 12 months:
By Funding Level:
- Bootstrapped (savings): $35,000-$65,000 first year
- Funded (seed/pre-seed): $100,000-$200,000 first year
- Well-funded (Series A): $250,000-$500,000+ first year
By Phase:
- Pre-launch (MVP): $20,000-$60,000 (development, design, legal setup)
- Launch (months 1-3): $15,000-$40,000 (marketing, tools, first hires)
- Growth (months 4-12): $30,000-$120,000+ (ongoing dev, marketing, team)
Real-world average from founders I've worked with: $88,000 first year for bootstrapped startups, $135,000 for funded startups.
The expensive mistake: Founders spend 80% on development, 20% on everything else. Should be 30-40% development, 30-40% marketing, 20-30% operations.
For detailed MVP development costs specifically, see: MVP Developer Cost: Complete 2025 Pricing Guide
Complete First-Year Budget: Bootstrapped ($35,000-$65,000)
This is for solo founders or small teams using savings, no external funding.
Pre-Launch (Months 1-3): $22,000-$32,000
Development & Design:
- MVP development: $15,000-$22,000 (simple to medium complexity)
- UI/UX design: $2,000-$4,000 (freelance designer, 5-10 key screens)
- Bug fixes post-launch: $2,000-$3,000
Business Setup:
- Legal (LLC/incorporation): $500-$1,500
- Terms of service + privacy policy: $500-$1,000
- Accounting software setup: $200-$400
Domain & Infrastructure:
- Domain registration: $20-$50
- Initial hosting setup: $100-$300
Total Pre-Launch: $20,200-$32,250
Launch Phase (Months 4-6): $7,500-$15,000
Hosting & Services (3 months):
- Hosting (Vercel, Railway): $50-$150/month = $150-$450
- Database (Supabase, Planetscale): $0-$50/month = $0-$150
- Email service (SendGrid, Postmark): $15-$30/month = $45-$90
- Auth service (Clerk, Auth0): $0-$25/month = $0-$75
- Monitoring (Sentry, LogRocket): $25-$50/month = $75-$150
- Payment processing (Stripe fees): ~2.9% of revenue (variable)
Total services: $270-$915/quarter
Marketing:
- Landing page optimization: $500-$1,000 (copywriter or DIY)
- Initial content (3-5 blog posts): $1,500-$3,000 (if outsourced, or your time if DIY)
- Google/Facebook ads testing: $1,000-$2,000 (small test budgets)
- Email marketing tool (ConvertKit, Mailchimp): $30-$60/month = $90-$180
Tools:
- Project management (Linear, Notion): $0-$20/month = $0-$60
- Customer support (Intercom starter, Plain): $0-$50/month = $0-$150
- Analytics (Google Analytics): Free
- Design tools (Figma, Canva): $15-$30/month = $45-$90
Ongoing Development:
- Feature additions + bug fixes: $2,000-$4,000 (retainer or hourly)
Total Launch Phase: $6,405-$11,445 (3 months)
Growth Phase (Months 7-12): $9,000-$22,000
Hosting & Services (6 months):
- Same as above but scaled up: $800-$2,400 (as usage grows)
Marketing:
- Content creation (blog, guides): $3,000-$6,000
- Paid ads: $2,000-$5,000
- SEO tools (Ahrefs, Semrush): $0-$600 (6 months)
Ongoing Development:
- Feature development: $6,000-$12,000 (6 months retainer)
- Infrastructure improvements: $1,000-$3,000
Tools & Operations:
- Increased tool costs as team grows: $300-$900 (6 months)
Contingency:
- Emergency bug fixes, unexpected costs: $1,000-$2,000
Total Growth Phase: $13,100-$32,900 (6 months)
TOTAL BOOTSTRAPPED FIRST YEAR: $39,705-$76,595
Average: ~$58,000
Reality check: Most bootstrapped founders spend $40K-$65K to get to first revenue, then reinvest earnings into growth.
Complete First-Year Budget: Funded ($100,000-$200,000)
This is for founders who've raised pre-seed or seed funding ($150K-$500K).
Pre-Launch (Months 1-4): $45,000-$75,000
Development & Design:
- MVP development: $28,000-$45,000 (medium to complex MVP)
- Professional UI/UX: $8,000-$15,000 (full brand + design system)
- QA testing: $3,000-$5,000
- Bug fixes post-launch: $4,000-$8,000
Business Setup:
- Legal (incorporation, contracts, etc.): $2,000-$5,000
- IP/trademark: $1,000-$2,500
- Accounting/bookkeeping: $500-$1,500
Infrastructure:
- Domain + initial setup: $200-$500
Total Pre-Launch: $46,700-$82,500
Launch Phase (Months 5-7): $28,000-$50,000
Hosting & Services (3 months, scaled up):
- Hosting: $150-$400/month = $450-$1,200
- Database: $50-$200/month = $150-$600
- Email + auth + monitoring: $100-$250/month = $300-$750
- Payment processing: Variable (2.9% of revenue)
Total services: $900-$2,550/quarter
Marketing:
- Landing page + funnel optimization: $3,000-$6,000
- Content creation (10-15 posts): $5,000-$10,000
- Paid ads: $5,000-$10,000
- Email marketing: $50-$150/month = $150-$450
Tools:
- Project management: $20-$50/month = $60-$150
- Customer support: $100-$300/month = $300-$900
- Analytics (Mixpanel, Amplitude): $0-$100/month = $0-$300
- CRM (HubSpot, Pipedrive): $50-$150/month = $150-$450
Team:
- Part-time marketer or contractor: $3,000-$6,000/month = $9,000-$18,000
- Ongoing development: $6,000-$10,000/month = $18,000-$30,000
Total Launch Phase: $41,560-$69,300 (3 months)
Growth Phase (Months 8-12): $40,000-$80,000
Hosting & Services (5 months, scaled up more):
- All services combined: $2,000-$5,000 (as you grow)
Marketing:
- Content + SEO: $8,000-$15,000
- Paid acquisition: $10,000-$20,000
- Marketing tools: $500-$1,500
Team:
- First full-time hire (developer or marketer): $25,000-$40,000 (5 months salary)
- Ongoing contractors: $5,000-$10,000
Ongoing Development:
- Feature development: $10,000-$20,000
Total Growth Phase: $60,500-$111,500 (5 months)
TOTAL FUNDED FIRST YEAR: $148,760-$263,300
Average: ~$185,000
Reality check: Funded founders should expect to spend $150K-$200K to reach $10K-$20K MRR in year one.
Complete First-Year Budget: Well-Funded ($250,000-$500,000+)
This is for founders with significant seed or Series A funding ($1M+).
Pre-Launch (Months 1-4): $75,000-$120,000
Development & Design:
- MVP development: $50,000-$75,000 (complex, enterprise-ready)
- Professional design: $15,000-$25,000 (full brand, design system, animations)
- QA + testing: $8,000-$12,000
- Bug fixes: $6,000-$10,000
Business Setup:
- Legal (comprehensive): $5,000-$10,000
- IP/trademark/patents: $3,000-$8,000
- Accounting/CFO services: $2,000-$5,000
Total Pre-Launch: $89,000-$145,000
Launch Phase (Months 5-8): $80,000-$150,000
Hosting & Services (4 months, enterprise-grade):
- Infrastructure: $500-$1,500/month = $2,000-$6,000
- Tools/services combined: $400-$800/month = $1,600-$3,200
Marketing:
- Launch campaign: $15,000-$30,000
- Content creation: $10,000-$20,000
- Paid acquisition: $20,000-$40,000
- PR/press outreach: $5,000-$15,000
Team:
- 2-3 full-time employees: $60,000-$100,000 (4 months combined)
Ongoing Development:
- Active feature development: $20,000-$40,000
Total Launch Phase: $133,600-$254,200 (4 months)
Growth Phase (Months 9-12): $100,000-$200,000
Hosting & Services:
- Infrastructure at scale: $4,000-$10,000 (4 months)
Marketing:
- Aggressive paid acquisition: $30,000-$60,000
- Content + SEO: $15,000-$30,000
- Events/conferences: $5,000-$15,000
Team:
- Growing to 5-7 employees: $80,000-$150,000 (4 months combined salaries)
Ongoing Development:
- Feature development + scaling: $25,000-$50,000
Total Growth Phase: $159,000-$315,000 (4 months)
TOTAL WELL-FUNDED FIRST YEAR: $381,600-$714,200
Average: ~$500,000
Reality check: Well-funded startups should target $50K-$100K MRR by end of year one to justify this spend.
What to Spend Money On FIRST (Priority Allocation)
Most founders ask: "Where should I spend my limited budget?"
Here's the priority order based on what actually moves the needle:
Phase 1: Get to MVP (Months 1-3)
Priority Allocation:
- Development (70%): MVP that solves core problem
- Design (15%): Clean, professional UI (not award-winning)
- Legal (10%): Basic incorporation, contracts
- Infrastructure (5%): Domain, hosting, basic tools
Budget: $18,000-$50,000 depending on funding level
Goal: Launch something real customers can use in 6-12 weeks.
Phase 2: Get to First 10 Customers (Months 4-6)
Priority Allocation:
- Marketing (40%): Landing page, content, ads testing
- Development (30%): Bug fixes, critical feature additions
- Sales/outreach (20%): Your time doing customer development
- Tools (10%): Essential services only
Budget: $6,000-$40,000
Goal: 10 paying customers (even if discounted or beta pricing). Validate product-market fit signals.
Phase 3: Get to $10K MRR (Months 7-12)
Priority Allocation:
- Marketing (40-50%): Double down on what's working
- Development (30%): Features that paying customers request
- Team (10-15%): First hire (developer or marketer)
- Tools/ops (5-10%): Scale infrastructure as needed
Budget: $15,000-$150,000
Goal: $10K MRR = $120K ARR. You've validated a real business.
Monthly Burn Rate: What's Normal?
Burn rate = How much cash you spend per month.
Bootstrapped Burn Rates
Months 1-3 (pre-launch): $6,000-$10,000/month
- Mostly development costs
- Minimal recurring costs
Months 4-6 (post-launch): $3,000-$6,000/month
- Development slows down
- Marketing increases
- Starting to get revenue
Months 7-12 (growth): $2,000-$5,000/month net burn
- Revenue growing
- Reinvesting profits
Goal: Reach profitability (revenue > costs) by month 8-12.
Funded Burn Rates
Months 1-4 (pre-launch): $12,000-$20,000/month
- Faster development (senior developers)
- Professional design
- Initial team hires
Months 5-8 (launch): $15,000-$30,000/month
- Marketing spend increases
- Team grows to 2-3 people
- Tools and services scale up
Months 9-12 (growth): $20,000-$50,000/month
- Aggressive customer acquisition
- Team of 5-7 people
- Infrastructure scales
Goal: Reach $10K-$20K MRR by month 12. Burn rate justified by growth.
Well-Funded Burn Rates
Months 1-4: $20,000-$35,000/month Months 5-8: $30,000-$60,000/month Months 9-12: $40,000-$80,000/month
Goal: Hit $50K-$100K MRR by month 12 to justify continued funding.
The Biggest Mistakes Founders Make with Budget
Mistake #1: Spending 80% on Development
What founders do:
- MVP: $40,000
- Marketing: $5,000
- Everything else: $5,000
What happens: They build a beautiful product no one knows about. Can't afford marketing. No customers.
What you should do:
- MVP: $25,000 (60%)
- Marketing: $10,000 (24%)
- Everything else: $7,000 (16%)
Build a good-enough MVP fast, spend real money on customer acquisition.
Mistake #2: Hiring Too Early
What founders do: Raise $200K, immediately hire 3 full-time employees. Burn $30K/month. Run out of money in 6 months with no revenue.
What you should do: Stay lean until $10K MRR. Use contractors and part-time help. First full-time hire at $5-10K MRR, second at $15-20K MRR.
Mistake #3: Buying Every Tool on Day 1
What founders do:
- Notion: $10/month
- HubSpot: $800/month
- Intercom: $200/month
- Salesforce: $300/month
- Slack: $8/user/month
- Figma: $15/month
- 10 other tools: $500/month
Total: $1,833/month = $22,000/year on tools before first customer.
What you should do: Start with free tiers. Upgrade only when you hit limits. Essential tools only: email (free), analytics (free), hosting ($50), payment processing (variable).
Total: $50-$150/month year one.
Mistake #4: Building for Scale on Day 1
What founders do: Spend $60K on enterprise-grade infrastructure, load balancers, auto-scaling, CI/CD pipelines... for 0 users.
What you should do: Start with simple hosting (Vercel, Railway). Costs $50-$200/month and handles 10,000+ users easily. Upgrade infrastructure when you have real scale problems (1,000+ active users).
Mistake #5: Not Budgeting for Marketing
What founders do: "We'll do organic marketing" (translation: we'll post on Twitter and hope for the best).
What happens: 6 months after launch, still 0 customers. Beautiful product, no distribution.
What you should do: Budget $500-$2,000/month minimum for marketing from day one. Even bootstrapped founders need paid acquisition testing, content creation, or ads.
For complete SaaS development cost breakdown, see: How Much Does It Cost to Build a SaaS in 2025?
How Long Does $100K Last?
Scenario: You raise $100K seed funding.
Aggressive Burn (Out of money in 5 months)
- Month 1-3: Spend $50K on complex MVP + fancy design
- Month 4-5: Spend $30K on team hires
- Month 5: Spend $20K on marketing push
- Result: Out of money by month 5, 0 revenue
Moderate Burn (Out of money in 10 months)
- Month 1-3: Spend $25K on solid MVP
- Month 4-6: Spend $20K on marketing + first customers
- Month 7-10: Spend $55K on growth (team, marketing, features)
- Result: Out of money by month 10, hopefully $5-10K MRR
Conservative Burn (Runway to profitability)
- Month 1-3: Spend $18K on lean MVP
- Month 4-6: Spend $12K on marketing + validation
- Month 7-12: Spend $40K on measured growth
- Month 12+: Revenue covers costs, $30K remaining cushion
- Result: Path to profitability by month 12-15
Recommendation: Plan for 12-18 month runway with any funding you raise.
Can You Start a SaaS for Under $20,000?
Yes, but with limitations.
What $20K Gets You:
- MVP: $12,000-$15,000 (simple, mid-level developer)
- Design: $1,500-$2,500 (freelance designer)
- Marketing: $2,000-$4,000 (minimal content, small ad tests)
- Legal: $500-$1,000 (DIY with templates)
- Tools: $500-$1,000 (free tiers + essentials)
Total: $16,500-$23,500 first 6 months
What You're Giving Up:
- Professional brand/design
- Senior developer (higher quality, faster)
- Aggressive marketing
- Team help (you do everything)
Can It Work?
Yes—if:
- You're technical (do some dev yourself)
- You have time (slow growth is okay)
- You have distribution (existing audience, network)
- Your product is simple
Reality: Many successful SaaS companies started with $15-25K. They just took 18-24 months to reach $10K MRR instead of 12 months.
For guidance on finding affordable developers, see: How to Hire a Developer When You Don't Know Code
Frequently Asked Questions
What I Actually Recommend
After helping 50+ founders budget their SaaS startups, here's my honest advice:
1. Plan for 12-18 Month Runway
Whatever funding you have (savings or raised), budget for 12-18 months. If you have $50K, your monthly burn should be $2.8K-$4.2K. If you have $150K, your monthly burn should be $8.3K-$12.5K.
2. Spend 30-40% on Development, Not 80%
Build a good-enough MVP fast. Spend the savings on marketing. A $20K MVP with $15K marketing budget beats a $50K MVP with $5K marketing every time.
3. Don't Hire Full-Time Until $10K MRR
Use contractors, fractional help, agencies until you have $10K MRR. Your first full-time hire at $5-10K MRR, second at $15-20K MRR. Too many founders burn cash on team before revenue.
4. Start with Free Tools, Upgrade When You Hit Limits
Free tier tools can easily handle 0-1,000 users. Don't pay for HubSpot when you have 0 customers. Upgrade when you actually hit limits.
5. Budget for Marketing from Day One
Even bootstrapped founders need $500-$2,000/month for marketing. Content creation, small ad tests, landing page optimization. Zero marketing budget = zero customers.
Ready to Get Started?
Not sure what your total SaaS startup costs will be? Use our interactive SaaS cost calculator to model your specific budget including development, marketing, tools, and team.
Need help planning your MVP budget? Read our complete guide: MVP Developer Cost: Complete 2025 Pricing Guide
Want strategic help planning your budget and build? I offer free 30-minute discovery calls to discuss your idea, realistic budget, and smart trade-offs for your funding level.
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