The G&A line on a startup’s financial model is where most founders fly blind. Engineering headcount has clear benchmarks. Sales spend is calibrated against revenue. Marketing has CAC math. But “general and administrative” — finance, HR, legal, IT, executive comp, facilities, office overhead — is the line most founders set by guesswork and adjust by panic.
We’ve seen Series A companies running 30% of revenue on G&A and wondering why they’re burning faster than expected. We’ve seen Series B companies running 8% on G&A and learning, during diligence for the C, that their finance function isn’t defensible. The right number isn’t universal, but it’s also not unknowable.
This post is for founders building their first real financial plan, finance leads at funded startups trying to calibrate the G&A line, and operators trying to understand where their G&A spend is over-built and where it’s dangerously thin. The goal: a clear, operator-grade view of what G&A includes, what percentage of revenue is normal at each stage, and where to invest more vs. less.
What G&A actually includes
The first place founders get confused is the definition. G&A is everything in your business that isn’t directly producing revenue or directly building the product. The typical components:
Finance. Bookkeeping, controllership, fractional CFO support, financial modeling, AP/AR processing, treasury, audit fees, tax preparation. Either in-house headcount or outsourced firms doing this work.
HR / People. HR leadership, recruiting (sometimes split into talent acquisition as its own line), benefits administration, payroll processing, HRIS systems, learning and development, employee engagement programs.
Legal. General counsel (full-time or outsourced), outside legal fees, compliance and regulatory work, contract review, board governance work, employment law support.
IT and Infrastructure. IT support, hardware, software subscriptions (the non-product, non-engineering ones), security, compliance tools, identity management.
Executive compensation. The portion of CEO, COO, CFO, and other C-level comp not allocated to revenue-generating or product-building functions. (For most early-stage companies, this is the entire executive comp line.)
Facilities and office. Rent, utilities, office services, food, supplies. For fully remote companies, this is much smaller — a coworking budget or home office stipends instead.
Insurance. D&O, E&O, general liability, cyber, employment practices liability.
Professional services. Recurring outside consulting, board fees, banking fees, audit fees, miscellaneous professional services.
The components vary by company, but the function is the same: G&A is the cost of running the business as a business, separate from the cost of building the product and selling it.
G&A as percentage of revenue: what’s normal by stage
The single most asked question we get on this topic: what percentage of revenue should G&A be?
The honest answer is that the percentage depends on stage and revenue level. Here’s the realistic range for venture-backed startups in 2026:
| Stage | Typical Revenue | G&A as % of Revenue | G&A in Absolute Dollars |
|---|---|---|---|
| Pre-seed / Seed | Pre-revenue or <$1M | N/A or >50% | $150K – $500K/year |
| Series A | $1M – $5M | 15% – 25% | $250K – $1.2M/year |
| Series B | $5M – $20M | 12% – 18% | $750K – $3.5M/year |
| Series C | $20M – $75M | 10% – 14% | $2M – $10M/year |
| Pre-IPO | $75M+ | 8% – 12% | $7M – $25M/year |
A few things to notice in this table:
G&A as a percentage of revenue declines as you scale. This is structural, not coincidental. Most G&A functions have meaningful fixed costs (you need a controller whether you’re at $5M or $15M revenue) that don’t scale linearly. As revenue grows, the fixed G&A base spreads across more revenue dollars.
The absolute dollars grow significantly. Even though the percentage shrinks, you’re spending dramatically more on G&A at Series B than at Series A. Going from $400K of G&A spend to $2M of G&A spend is a 5x increase — and it has to happen across the right line items to actually work.
Pre-revenue is a special case. When you have no revenue, G&A as a percentage of revenue is mathematically meaningless. Focus on absolute dollars and runway impact instead.
Outliers exist in both directions. Highly regulated industries (biotech, fintech) often run higher G&A because of compliance overhead. Bootstrapped or hyper-efficient companies sometimes run dramatically lower. The benchmarks are starting points, not absolutes.
Where to spend more, where to spend less
The percentage benchmarks tell you whether your total G&A is in a reasonable range. The harder question is: within that envelope, where should you actually be spending?
A breakdown of typical G&A allocation for a Series A or Series B venture-backed startup, expressed as percentage of total G&A:
| G&A Sub-Function | Typical % of G&A | Where to invest more | Where you can defer |
|---|---|---|---|
| Finance | 25% – 35% | If preparing for audit, fundraise, or M&A | If on a steady-state plan with clean books |
| HR / People | 15% – 25% | Past 25 employees, multi-state, or first People hire | Single-state, under 15 people |
| Legal | 10% – 20% | Heavy contract volume, IP, regulated industry | Standard SaaS without complex regulatory needs |
| Executive comp | 15% – 25% | When you need senior hires to execute | When founders can still run functions directly |
| IT / Tools | 8% – 15% | Security, identity, audit-prep tools | Marginal productivity SaaS |
| Facilities | 0% – 10% | If you have a real office | Fully remote = near zero |
| Insurance | 3% – 8% | After Series B (D&O coverage becomes real) | Early-stage minimum coverage |
The single most important thing to understand: the finance and HR functions are the ones founders most consistently under-fund and then regret.
When a startup discovers, during diligence for its Series B, that the accounting for the last 18 months has material errors, the cleanup cost is dramatically larger than the savings of running with a thin finance team. We’ve seen first-audit remediation projects exceed $200K because the underlying books required restatement of revenue, expense accruals, and stock comp accounting. That’s a year of fully-outsourced controller costs to fix one year of skimping.
Same dynamic with HR. Companies that cross 25 employees without a real HR function tend to discover, at month 30, that they have multi-state compliance failures, missing employment posters, inadequate handbooks, and a backlog of HR issues that should have been addressed years ago. The cleanup is expensive and the recruiting damage from “this company isn’t a real place to work” can be permanent.
The functions worth defending in budget cuts are bookkeeping, controllership, payroll, and basic HR compliance. The functions worth scrutinizing closely for waste are tooling (zombie SaaS spend is real), facilities (if you’re not in the office, don’t pay for it), and executive comp (a part-time fractional CFO at $7K/month often outperforms a full-time hire at $25K/month for what an early-stage company actually needs).
The G&A budgeting process — how to actually build it
For founders building their first G&A budget or annual plan, the right process looks roughly like this:
Step 1: Build it bottoms-up by line item, not as a percentage of revenue.
Listing every expected G&A expense by category — finance, HR, legal, tools, exec comp, facilities, insurance — produces a defensible number. Pulling a percentage out of the air (“we’ll budget G&A at 18% of revenue”) produces a number you can’t defend during board meetings or fundraising.
Step 2: Compare your bottoms-up total against percentage benchmarks.
Once you have the bottoms-up number, divide it by your forecast revenue and compare to the benchmarks above. If you’re at 28% G&A on a Series B plan and the typical range is 12–18%, you have a meaningful overhead problem to address. If you’re at 8% on a Series A plan and the range is 15–25%, you’re under-investing in infrastructure that will hurt you in 18 months.
Step 3: Identify the structural drivers.
If you’re outside the benchmark range, understand why. Sometimes it’s defensible (regulated industry, complex international operations, specific recovery from inherited mess). Sometimes it’s a real problem (zombie SaaS, redundant headcount, vendor sprawl).
Step 4: Plan for stage transitions.
Your G&A budget at Series A isn’t the same as your G&A budget at Series B. Plan for the transitions before they happen. The Series A team that doesn’t plan for the controller hire at $5M–$10M ARR ends up scrambling. The Series B team that doesn’t plan for the full-time CFO at $15M–$25M ARR ends up with a fractional CFO running unsustainable hours.
Step 5: Re-budget quarterly, not annually.
G&A spend drifts. Tools get added. Vendors expand scope. Outside fees creep. A quarterly review process catches drift before it becomes a year-long pattern. The review doesn’t need to be elaborate — even a 30-minute session each quarter looking at variance to plan, line by line, catches most issues.
Common mistakes in G&A budgeting
Mistake 1: Treating G&A as the “cut first” line in tough times. Counterintuitively, G&A is often the wrong place to cut during a downturn. The people in G&A roles — finance, HR, legal — are the ones managing the company’s response to the downturn. Cutting them mid-crisis is like firing the doctor during the emergency.
Mistake 2: Letting tools and vendor spend creep. Zombie SaaS, redundant subscriptions, expired-but-still-billing tools. We’ve seen Series A and B companies clawing back $50K–$150K per year from a single audit of recurring software charges. Run a tool audit quarterly. Modern corporate card platforms (like Ramp) flag duplicate subscriptions and unused tools automatically — use them.
Mistake 3: Confusing “lean” with “non-existent.” Some functions should be lean (facilities, exec comp at early stage). Others should never be skimped (basic bookkeeping, payroll compliance, employment law). Knowing the difference is what separates a well-run early-stage company from a future remediation project.
Mistake 4: Outsourcing the wrong things. Outsource the things where you can buy world-class quality cheaply (bookkeeping, payroll mechanics, recruiting tools). Don’t outsource the things where strategic context matters and the work compounds (true CFO leadership, equity comp design, the People function once you cross 50 employees).
Mistake 5: Using full-time hires as the default. Hiring a full-time controller at Series A often costs more than fractional support and delivers less, because you’re paying for capacity you don’t yet use. Use the hybrid model (fractional / outsourced for the functions you don’t need full-time, in-house for the functions you do) until your scale forces the transition.
What to do if you’re outside the benchmarks
If you’re well over the typical G&A range:
- Audit headcount in G&A functions. Often the issue is hiring full-time staff for what could be fractional or outsourced.
- Audit tooling spend. Cancel duplicate subscriptions, eliminate tools nobody uses.
- Audit professional services. Multiple outside firms doing overlapping work is common and costly.
- Review executive comp allocation. If a high-comp executive’s time is mostly G&A-related, the budget pressure is real.
If you’re well under the typical G&A range:
- Don’t celebrate. Under-investment in G&A almost always shows up as a problem 12–24 months later.
- Identify which functions are dangerously thin. Almost always finance and HR.
- Plan controlled investment over the next 6–12 months rather than slashing the underspend immediately.
- Be honest with your board about where the gaps are. A founder who proactively flags “our finance function is thin and here’s the plan to fix it” gets credit. A founder whose thin finance function gets discovered by an auditor or acquirer loses it.
When to bring in operator support
Building a real G&A budget — one that’s defensible, well-allocated across functions, and calibrated to your stage — is the kind of work where outside perspective pays off quickly.
You probably don’t need outside help if you have an experienced finance lead in-house, a clear historical picture of your G&A spend, and a board that’s aligned on the right level of investment.
You likely do want operator support if:
- You’re building your first G&A budget from scratch and aren’t sure what’s normal
- Your G&A spend is outside the benchmarks and you don’t know whether that’s defensible
- You’re planning a major stage transition (Series A to B, or pre-audit) and need to know what G&A investments to make first
- You’re under board pressure to cut G&A and need help identifying what’s safe to cut vs. what’s not
- You’ve inherited a messy G&A budget from a prior CFO and need someone to clean it up
Pegacorn Group works with venture-backed Series A and B startups on G&A planning, finance function design, and outsourced back-office support. If you want help calibrating your G&A budget to your stage and trajectory, let’s talk.
This post pairs with: What does it actually cost to outsource your back office?, The lean startup back office: how to do more with less, When to hire vs. outsource: a decision framework for every back-office function, and When to hire your first HR person.