“What's your biggest cost, and why?”

What they're really asking

Are you spending on the right things? Investors rarely care about the question on its own. They're testing whether you know your numbers cold, whether your assumptions are honest, and whether you can explain them simply.

How to answer, step by step

1. Name the top cost lines (usually people).
2. Link each to a growth driver.
3. Show the split by department.

An example answer

People are about 70% of our costs. Over the next 18 months, 40% of spend goes to product and 35% to sales and marketing.

Figures are from Loopdesk, the fictional SaaS company in our sample files. Swap in your own numbers and keep the structure.

The answer that loses trust

Where the proof lives

Before the meeting, find the number behind your answer. In our workbooks it lives in: OpEx, Use of Funds Planner. If you can open that tab and point to it, the follow-up question is easy.