MedTech Funding & Cybersecurity Budgets by Stage

Funding Strategy

How much cybersecurity budget to put in your raise.

A stage-by-stage guide for medical device founders: how much to allocate from Pre-Seed to Series C+, what cybersecurity work to buy at each round, and how to talk about it with investors.

Round-by-round Cheatsheet Where we fit 5 budget rules Investor narrative

The short answer

Allocate 2-5% of every round to cybersecurity through Series A.

For a connected Class II device, that means roughly $8-75K at Pre-Seed, $45-200K at Seed, $160-600K at Series A, then transitioning to 1-2% of annual opex as a continuous postmarket program from Series B onward. Underspending here is the single most common reason FDA submissions stall - and the most expensive line item to backfill late.

The cheatsheet

Every stage on one page

Skim this once, then dig into the stage detail below.

Stage	Typical raise	Cyber budget	% allocation	Where the money goes	Round focus	What to skip
Pre-Seed	$250K - $1.5M	$8K - $75K	3 - 5% of raise	~100% external consulting (advisory hours) · No hires, no tooling licenses	Concept validation, founding team, IP, early prototypes.	Full pen test, full SBOM tooling stack, dedicated CISO.
Seed	$1.5M - $5M	$45K - $200K	3 - 4% of raise	~70 - 80% consulting and pen testing · ~15 - 20% SBOM / SCA tooling license	MVP build, first clinical engagement, regulatory pathway lock-in.	Full-fledged PSIRT, bug bounty, or expensive GRC platform.
Series A	$8M - $20M	$160K - $600K	2 - 3% of raise	~85% consulting and testing (the manual pen test is the largest single line, often $50 - 150K+) · ~10% tooling · ~5% fractional security lead	Pivotal study, 510(k)/De Novo/PMA prep, scale engineering.	Full-time CISO before you have postmarket scale - fractional or external is enough.
Series B	$20M - $60M	$200K - $1.2M / year	1 - 2% of raise (now operational, not project)	~40% first in-house hire (PSIRT lead) · ~20% monitoring tooling · ~20% recurring testing and per-release retests · ~20% consulting and external surge capacity	Commercialization, postmarket scale-up, additional indications, EU + global expansion.	Don't over-tool. Process maturity beats SaaS subscriptions.
Series C+ / Growth	$60M+	$1.5M - $5M+ / year	1 - 1.5% of annual opex	~50 - 60% product security org (salaries) · ~20% platforms and tooling · ~15% audit and certification fees (SOC 2, HITRUST, CRA) · ~10% testing and bug bounty payouts	Multi-product portfolio, international, acquisitions, IPO-readiness.	Vanity certifications that don't match your customer ask.

Worked examples

Three product archetypes, stage by stage

Same stage allocations, very different numbers inside them. Find the archetype closest to your product, then read which drivers push you toward the top of each band.

Scenario

Device-only

Embedded Class II device, one wireless or wired interface, no companion app and no cloud backend. Firmware updated on a yearly cadence.

Pre-Seed$8K - $25K

Architecture review and a first-pass threat model so the interface set is deliberate.

Seed$45K - $90K

STRIDE threat model, security risk assessment, SBOM baseline, secure requirements traced into the 62304 file.

Series A$160K - $280K

Full device pen test on production-equivalent units, submission documentation, deficiency support.

Series B+$25K - $34K / yr

Manual-to-continuous SBOM monitoring, annual patch validation, disclosure intake.

Which drivers move

Testing depth: Up. Firmware, hardware ports, and radio testing need bench time and production units.
Interfaces: Down. One trust boundary keeps the model and test scope small.
Patch frequency: Down. Annual releases mean one validation cycle a year.

Watch out: Debug and service ports are the most common finding. Budget for hardware teardown testing, not just software scanning.

Scenario

App plus cloud

Device or SaMD with a mobile app and a hosted backend. Cloud components ship continuously; the regulated device changes quarterly.

Pre-Seed$15K - $45K

Data flow mapping across app, API, and device before the architecture hardens.

Seed$70K - $150K

Multi-component threat model, cloud configuration review, SAST and dependency scanning in CI, SBOM across all three tiers.

Series A$220K - $420K

Application, API, and device pen test, PHI data-handling review, submission package with architecture views.

Series B+$31K - $52K / yr

Continuous SBOM and VEX monitoring, quarterly regression testing, change-control evidence for cloud deploys.

Which drivers move

Interfaces: Up. App, API, and hosted services each add a boundary to model and test.
Threat modeling effort: Up. Three components modeled separately plus cross-boundary flows.
Patch frequency: Up. Continuous cloud delivery needs pipeline security gates and per-deploy evidence.

Watch out: The FDA reviews the cloud backend as part of the device when it affects safety or effectiveness. Treat it as in scope from day one, not as ordinary IT.

Scenario

Multi-interface ecosystem

Connected platform with EHR or partner integrations, hospital network interoperability, and often an AI or ML component in the pipeline.

Pre-Seed$25K - $75K

Interoperability and trust-boundary strategy, early interface reduction decisions.

Seed$110K - $200K

Ecosystem threat model including third-party and AI or ML supply chain, interface control documentation, SBOM with transitive depth.

Series A$340K - $600K

Full-scope pen test with protocol fuzzing, HL7 and FHIR interface testing, hospital security questionnaire package, submission documentation.

Series B+$45K - $68K / yr

Managed monitoring with fleet telemetry, coordinated disclosure handling, monthly patch validation, customer notification workflow.

Which drivers move

Interfaces: Up hard. This is the dominant multiplier at every stage.
Testing depth: Up. Protocol fuzzing and interoperability testing on top of standard pen testing.
Monitoring scope: Up. Fielded-device telemetry and disclosure handling become mandatory in practice.

Watch out: Hospital security review runs in parallel with the FDA. Budget for the questionnaire and third-party assurance package, because it gates revenue even after clearance.

Methodology

Sources and assumptions

Every percentage and dollar figure on this page traces back to one of the inputs below. We would rather show the working than have you defend a number you cannot source.

Where the numbers come from

Dollar bands (stage budgets, scenarios, calculator baseline): Blue Goat Cyber engagement data. Derived from the scoped fee ranges we quote and deliver against for connected Class II medical device programs. This is our own book of work, not a published industry benchmark. Bands are rounded and widened deliberately so they hold across architectures.
Percentage-of-raise allocations (2-5% through Series A): Blue Goat engagement data cross-checked against typical round sizes. We divide the stage dollar band by the typical raise for that stage, then round to a whole-percent range. From Series B onward the denominator switches to annual operating expense, because cybersecurity has become a running program rather than a one-off project.
Deliverable scope (what each budget buys): FDA premarket cybersecurity guidance, February 3, 2026. The line items we price - threat model, security risk assessment, SBOM and vulnerability analysis, architecture views, testing, and postmarket plan - map to the documentation the FDA expects in a premarket submission.
Postmarket recurring cost drivers: FD&C Act Section 524B. Monitoring, SBOM refresh, coordinated vulnerability disclosure, and patch validation are statutory obligations for cyber devices, which is why they are modeled as an annual line rather than an optional add-on.
Threat modeling effort tiers: ANSI/AAMI SW96:2023 and ISO 14971. Effort scales with the number of data flow diagrams and trust boundaries you have to analyze under STRIDE and trace into the risk management file. That structure is what the tiers in the calculator represent.
Testing depth tiers: Scope patterns from medical device penetration tests we run. Each tier reflects a real scope shape: scanning only, application and API, full device including firmware and wireless, and device plus protocol fuzzing. Bench time on production-equivalent units is the main cost step between tiers.

Assumptions this page is using

Baseline product is a connected Class II device pursuing a 510(k) with a single submission cycle. Class III typically adds 30-50%. Pure software with no hardware can shave about 20%.
US market only. EU MDR, the Cyber Resilience Act, and other jurisdictions add scope that is not included in any number on this page.
One submission cycle is assumed. A deficiency response or a second submission round is additional.
Figures are in US dollars, current as of 2026, and are not indexed for inflation.
Pen testing and compliance audits are assumed to stay outsourced at every stage, because the FDA and hospital buyers expect third-party independence.
Internal engineering rework, tooling licenses, and infrastructure are included in the "what this budget covers" envelopes but are not part of any service fee.
Calculator multipliers are compounding and applied to the baseline band. They are calibrated to reproduce our observed ranges at the endpoints, not fitted to a statistical model.
Nothing here is a quote, and no number implies a regulatory outcome. Clearance decisions rest with the FDA.

If your product breaks one of these assumptions, the ranges shift. Bring your architecture to a session and we will size it against the real thing rather than the baseline.

How each stage band is built, step by step

Every band on this page is built scope-first: we price the work that stage actually requires, round the range outward, then divide by the typical raise to express it as a percentage. The percentage is a check on the dollar figure, never the source of it.

Pre-Seed

Raise $250K - $1.5M$8K - $75K3 - 5% of raise

1Start from scope, not from a percentage. At pre-seed the only defensible work is a first threat model, a security requirements set, and an architecture review: 40-120 hours of senior time.
2Price that at our engagement rates and round outward: $8K at the bottom (single-system model, no hardware) and $75K at the top (early device plus app, plus a scoping pen test).
3Divide by the raise to sanity-check the allocation: $8K / $250K = 3.2%, $75K / $1.5M = 5.0%. Reported as 3 - 5%.

Seed

Raise $1.5M - $5M$45K - $200K3 - 4% of raise

1Scope adds the full premarket documentation set plus a first real pen test. That is the $65K - $125K baseline used by the calculator, widened for products that are earlier or more complex than baseline.
2Low end assumes a software-only product with an existing threat model ($45K). High end assumes device plus app plus cloud with firmware testing ($200K).
3Check against the raise: $45K / $1.5M = 3.0%, $200K / $5M = 4.0%. Reported as 3 - 4%.

Series A

Raise $8M - $20M$160K - $600K2 - 3% of raise

1Submission-cycle cost stays in the same shape, but you now add postmarket standup, SBOM tooling, secure SDLC rollout, and usually a deficiency-response reserve.
2Low end is one submission plus a year of monitoring ($160K). High end is a multi-product portfolio with continuous testing and a managed disclosure program ($600K).
3Check against the raise: $160K / $8M = 2.0%, $600K / $20M = 3.0%. Reported as 2 - 3%.

Series B

Raise $20M - $60M$200K - $1.2M / year1 - 2% of raise

1The denominator changes here. Cybersecurity is now a running program, so the band is expressed per year rather than per submission.
2Low end is one commercial product under Section 524B maintenance plus periodic testing ($200K/yr). High end adds an in-house security lead, tooling licenses, and multiple product lines ($1.2M/yr).
3Check against the raise: $200K / $20M = 1.0%, $1.2M / $60M = 2.0%. Reported as 1 - 2%.

Series C+ / Growth

Raise $60M+$1.5M - $5M+ / year1 - 1.5% of annual opex

1At this stage the raise is no longer the right denominator, because spend is funded from operations. We switch to annual operating expense.
2Band reflects a staffed internal function (3-10 people), enterprise tooling, continuous third-party testing, and multi-jurisdiction compliance.
3Check against opex: a company running $150M opex at 1% lands at $1.5M; $350M at 1.4% lands near $5M. Reported as 1 - 1.5% of annual opex.

Exact calculation logic behind the calculator

The cost-driver calculator is deterministic arithmetic, not a model. Here is every step it runs, in order, so you can reproduce any number it shows.

Step 1 - Baseline bands
Premarket starts at $65K - $125K and postmarket at $25K - $40K per year. Baseline is a connected Class II device with one wireless interface, an app and API pen test, a single-system threat model, partial secure SDLC, continuous monitoring, and quarterly patch releases. Those six defaults are exactly the calculator's reset state, so an untouched calculator returns the baseline unchanged.
Step 2 - Each driver carries a low and a high multiplier
Every option has two numbers: one applied to the low end of the band and one to the high end. The baseline option of each driver is 1.00 / 1.00, which is why it does not move the result. Cheaper options sit below 1 (scanning-only testing is 0.70 / 0.75), costlier ones above (device pen test plus fuzzing is 1.45 / 1.70). High multipliers are set at or above their low counterparts, so the range widens rather than inverts as complexity rises.
Step 3 - Drivers are routed to a bucket
Testing depth, threat modeling effort, and SDLC maturity apply to the premarket bucket only. Monitoring scope and patch frequency apply to the annual bucket only. Interfaces and trust boundaries apply to both, because an added boundary has to be modeled and tested once and then monitored forever.
Step 4 - Multipliers compound
Within each bucket the selected multipliers are multiplied together, not added: premarketLow = 65,000 x testing.low x interfaces.low x threat.low x sdlc.low, and the same chain for the high end. Compounding is deliberate: a device with firmware testing and an ecosystem of integrations and no secure SDLC is more than the sum of those three problems, because each one enlarges the work the others create.
Step 5 - Assumption posture scales the band
The posture toggle applies one final pair of multipliers to both buckets. Aggressive is 0.85 / 0.90 and assumes clean documentation with no deficiency response or retest cycle. Baseline is 1.00 / 1.00 and is what every other figure on this page uses. Conservative is 1.20 / 1.40 and prices in a deficiency response, one extra test cycle, and documentation rework. It is applied after the six drivers, so it scales the whole result rather than any single line.
Step 6 - Three-year envelope
threeYearLow = premarketLow + (annualLow x 3), and the same for the high end. One submission cycle plus three years of postmarket. No discount rate or inflation index is applied.
Step 7 - Rounding and display
Results are rounded to the nearest $1,000 and displayed in thousands. Rounding happens only at display time, so intermediate multiplication is never truncated. Class III and pure-software adjustments (+30-50% and -20%) are stated as guidance rather than applied automatically, because they depend on the pathway rather than on the six drivers.

Worked example you can check by hand

App plus cloud device, full device pen test, multi-component threat model, no formal secure SDLC, continuous monitoring, monthly releases, baseline posture.

Premarket low: 65,000 x 1.25 (device test) x 1.20 (app + cloud) x 1.15 (multi-component) x 1.30 (no SDLC) = ~145,700
Premarket high: 125,000 x 1.40 x 1.30 x 1.30 x 1.50 = ~443,600
Annual low: 25,000 x 1.20 (app + cloud) x 1.00 (continuous monitoring baseline) x 1.30 (monthly) = ~39,000
Annual high: 40,000 x 1.30 x 1.00 x 1.50 = ~78,000
Three-year: 145,700 + (39,000 x 3) = ~262,700 low; 443,600 + (78,000 x 3) = ~677,600 high

Displayed results are rounded to the nearest thousand, so small differences against a hand calculation are rounding, not a different formula.

Definitions

Glossary of terms and assumptions

Every calculator input, budgeting term, regulatory reference, and deliverable named on this page, defined so you can interpret each number without guessing at what it covers.

Glossary

Every assumption, calculator input, and technical term used on this page, defined in plain language. If a number here has to survive a board meeting or an FDA reviewer, you should be able to explain each input behind it.

Calculator inputs

Testing depth: How far third-party security testing goes. Four tiers: automated vulnerability scanning only; manual application and API penetration testing; full device testing including firmware, hardware interfaces, and wireless; and full device testing plus protocol fuzzing. Bench time on production-equivalent units is the main cost step between tiers.
Interfaces and trust boundaries: A trust boundary is any point where data or control crosses between components with different privilege levels, such as device to mobile app, app to cloud API, or cloud to hospital EHR. Each boundary must be modeled, documented, tested, and then monitored, which is why this driver affects both the premarket and the annual budget.
Threat modeling effort: The amount of STRIDE analysis required, measured by how many data flow diagrams and components you have to analyze and trace into the risk management file. Ranges from refreshing an existing model to modeling a multi-component system with an AI or ML pipeline.
SDLC maturity: How much secure development practice already exists in your engineering process. Low maturity means controls and evidence get reconstructed retroactively at submission time, which is the single most expensive way to produce them. High maturity means the evidence is a byproduct of how you already build.
Monitoring scope: The postmarket vulnerability monitoring commitment: from periodic manual SBOM review, through continuous automated monitoring of components, up to a managed program that also handles coordinated vulnerability disclosure intake and researcher communications.
Postmarket patch frequency: How often you ship security-relevant releases. Every release needs regression security testing, an updated SBOM, and refreshed evidence, so a monthly cadence costs materially more per year than an annual one.
Baseline: The calculator's reset state and the product profile every multiplier is measured against: a connected Class II device with one wireless interface, an application and API pen test, a single-system threat model, partial secure SDLC, continuous monitoring, and quarterly patch releases. Premarket $65K - $125K, postmarket $25K - $40K per year.
Multiplier: A factor applied to the baseline band for a selected option. Each option carries a low and a high multiplier, applied to the low and high ends of the range. The baseline option of every driver is 1.00, so it does not move the result.
Compounding: Selected multipliers within a bucket are multiplied together rather than added. Complexity interacts: firmware testing on an integrated ecosystem with no secure SDLC costs more than the three problems priced separately, because each one enlarges the work the others create.
Bucket (premarket vs annual): Which budget a driver feeds. Testing depth, threat modeling effort, and SDLC maturity affect premarket only. Monitoring scope and patch frequency affect the annual program only. Interfaces affect both.
Assumption posture (conservative / baseline / aggressive): A final scaling applied to the whole calculated range after the six drivers. Aggressive (x0.85 - x0.90) assumes clean documentation and no deficiency response. Baseline (x1.00) is the expected case and matches every other figure on this page. Conservative (x1.20 - x1.40) prices in a deficiency response, an extra test cycle, and documentation rework.

Budget and finance terms

Premarket, one-off: The cost of producing the cybersecurity documentation and testing evidence for one submission cycle. It does not include a deficiency response or a second submission round.
Postmarket, per year: The recurring annual cost of meeting Section 524B obligations after clearance: monitoring, SBOM and VEX refresh, coordinated disclosure handling, and patch validation support.
Three-year envelope: One submission cycle plus three years of postmarket program cost. Calculated as premarket plus (annual x 3), with no discount rate or inflation index applied. This is the figure to carry into an FP&A model or an investor deck.
Percentage of raise: The stage dollar band divided by the typical round size for that stage, rounded to whole percents. It is a sanity check on the dollar figure, never the source of it. From Series B onward the denominator switches to annual operating expense.
Annual operating expense (opex): Total yearly cost of running the business. Used as the denominator from Series B onward, because at that point cybersecurity is funded from operations as a running program rather than from a financing round as a project.
Planning range: A deliberately widened band intended for budgeting and board conversations. It is not a quote, and no figure on this page implies a regulatory outcome.
Engagement data: Blue Goat Cyber's own scoped fee ranges from work we have quoted and delivered for connected medical device programs. It is our book of work, not a published industry benchmark.
Deficiency response reserve: Money held back for the cybersecurity portion of an FDA deficiency letter, Additional Information request, or Submission Issue Request. None of the base bands on this page include it.

Regulatory and standards

Section 524B: The FD&C Act provision that makes cybersecurity a statutory requirement for cyber devices. It is why monitoring, SBOM maintenance, coordinated disclosure, and patching are modeled as a recurring annual line rather than an optional add-on.
Cyber device: A device that includes software, can connect to the internet, and contains technological characteristics that could be vulnerable to cybersecurity threats. Meeting that definition triggers Section 524B obligations.
FDA premarket cybersecurity guidance (February 3, 2026): The current FDA guidance defining what cybersecurity documentation a premarket submission must contain. The deliverables priced on this page map to that expected documentation set.
ANSI/AAMI SW96:2023: The consensus standard for medical device security risk management. It defines how security risk analysis is structured and how it connects to safety risk management. It supersedes the older AAMI TIR57 approach.
ISO 14971: The risk management standard for medical devices. Security threats must be traced into this risk file so that security findings connect to patient harm rather than living in a separate document.
IEC 62304: The medical device software lifecycle standard. Following it gives you a disciplined software process, but it does not by itself produce the security practices or evidence the FDA expects.
Class II / Class III: FDA risk classifications. Every band on this page assumes a connected Class II device pursuing a 510(k). Class III typically adds 30-50% to the premarket figure.
510(k): The premarket submission pathway demonstrating substantial equivalence to a predicate device. All bands assume a single 510(k) submission cycle.
PCCP: Predetermined Change Control Plan. A pre-authorized plan for making specified changes, most often to AI or ML models, without a new submission. It adds threat modeling scope because the change space itself has to be analyzed.
SaMD: Software as a Medical Device: software with no hardware component that performs a medical function. Removing hardware from scope can shave roughly 20% off the premarket band.
EU MDR / Cyber Resilience Act: European regulatory regimes with their own cybersecurity obligations. Every number on this page is US market only; these jurisdictions add scope that is not included anywhere in the model.

Deliverables and artifacts

Threat model: A structured analysis of how your system can be attacked, built from data flow diagrams and analyzed with STRIDE, then scored and traced into the risk management file.
STRIDE: A threat classification framework covering Spoofing, Tampering, Repudiation, Information disclosure, Denial of service, and Elevation of privilege. Applied per element of each data flow diagram.
Data flow diagram (DFD): A diagram showing processes, data stores, external entities, and the flows between them, with trust boundaries drawn in. The number and depth of DFDs is the main measure of threat modeling effort.
Security risk assessment: The document that scores identified threats by exploitability and patient harm, records the controls that mitigate them, and shows the residual risk position.
SBOM: Software Bill of Materials: a machine-readable inventory of every software component and dependency in the product, including version and supplier. Required in submissions and maintained for the life of the device.
VEX: Vulnerability Exploitability eXchange: a statement of whether a known vulnerability in an SBOM component is actually exploitable in your product. It is what keeps SBOM monitoring from generating unmanageable noise.
Architecture views: The set of system diagrams the FDA expects in a submission, showing global system, multi-patient harm, updateability and patchability, and security use cases.
Coordinated vulnerability disclosure (CVD): A published process for outside researchers to report vulnerabilities to you, plus the internal workflow to triage, remediate, and communicate them. Required postmarket, and a meaningful annual cost if handled properly.
Penetration test: Manual, expert-led security testing that attempts real exploitation. It is distinct from automated scanning, and it is the evidence the FDA and hospital buyers expect from an independent third party.
Protocol fuzzing: Automated injection of malformed inputs into a communication protocol to find crash and memory-safety defects. It requires bench time on production-equivalent units, which is why it is the most expensive testing tier.
Patch validation: Regression security testing and evidence updates performed on each release so that a fix does not introduce new risk and the documentation stays current.

Round by round

What to budget - and what to actually buy - at each stage

These are the budgets we see work for connected Class II medical devices (the most common profile). Class III adds 30-50%; pure SaMD with no hardware can shave 20%.

The through-line: you buy expertise first, tools second, people last. Pen testing and compliance audits stay outsourced at every stage, because the FDA and hospital buyers expect third-party independence.

How to read the "what this budget covers" box

Service-provider fees are only part of any cybersecurity budget. The boxes below expand each stage's number into its real envelope. External services plus engineering rework, tooling, infrastructure, and submission overhead. Use them to defend the line item internally and to size your FP&A model accurately.

Pre-Seed

$250K - $1.5M

typical raise

Cybersecurity budget

$8K - $75K

3 - 5% of raise

0%of raise5%

Where the money goes

~100% external consulting (advisory hours)
No hires, no tooling licenses

Round focus: Concept validation, founding team, IP, early prototypes.

What to buy

Architecture / threat-modeling working session (we lead, your team contributes)
Initial cybersecurity risk register tied to ISO 14971
Technology choice review - pick connectivity, OS, and crypto with reviewers in mind
Pre-Sub (Q-Sub) cybersecurity strategy memo

What this budget covers

External advisor fees (Blue Goat or equivalent)
Engineering time to act on architecture recommendations
Initial security tooling trials (SAST, secrets scanning) - most have free tiers at this scale
FDA Pre-Sub user fee (typically $0 - no fee currently)

What to skip: Full pen test, full SBOM tooling stack, dedicated CISO.

Investor narrative

“We've baked cybersecurity into our architecture before writing the first line of firmware - here's the threat model.”

Seed

$1.5M - $5M

typical raise

Cybersecurity budget

$45K - $200K

3 - 4% of raise

0%of raise5%

Where the money goes

~70 - 80% consulting and pen testing
~15 - 20% SBOM / SCA tooling license

Round focus: MVP build, first clinical engagement, regulatory pathway lock-in.

What to buy

Formal STRIDE-per-element threat model + AAMI TIR57 alignment
First-pass SBOM (CycloneDX 1.5) + tooling selection
Pre-Sub (Q-Sub) submission with cybersecurity scope
Lightweight pen test of MVP (gray-box, scoped to 1-2 weeks)
SPDF documentation skeleton and SDLC integration

What this budget covers

External services (threat model, Pre-Sub support, scoped pen test)
CI/CD pipeline setup with security gates (SAST, SCA, secrets scanning, dependency updates)
SBOM tooling (CycloneDX generator, SBOM aggregation, license/vuln scanner)
Engineering time to act on threat-model + Pre-Sub findings (often 20-40% of the line item)
Internal SDLC documentation and process build-out (SPDF skeleton)
Vulnerability remediation and patch development for issues surfaced by the lightweight pen test

What to skip: Full-fledged PSIRT, bug bounty, or expensive GRC platform.

Investor narrative

“Our Pre-Sub returned no cybersecurity questions - the FDA agrees with our approach. This de-risks the next round materially.”

Series A

$8M - $20M

typical raise

Cybersecurity budget

$160K - $600K

2 - 3% of raise

0%of raise5%

Where the money goes

~85% consulting and testing (the manual pen test is the largest single line, often $50 - 150K+)
~10% tooling
~5% fractional security lead

Round focus: Pivotal study, 510(k)/De Novo/PMA prep, scale engineering.

What to buy

Full eSTAR-ready cybersecurity package (SPDF, threat model, SBOM, pen test, postmarket plan)
Manual exploit-driven penetration testing across device + app + cloud + wireless
Coordinated Vulnerability Disclosure (CVD) program stand-up
Cybersecurity labeling and MDS² preparation
Submission support + reviewer-letter response readiness

What this budget covers

External services (full eSTAR cyber package, manual pen test, retests)
Engineering rework based on pen test findings - typically the largest hidden line item (often 30-50% of total cyber spend)
Patch development, regression testing, and verification for every pen-test finding
CI/CD hardening: signed builds, SBOM generation in pipeline, automated vulnerability gating, reproducible builds
Cryptographic infrastructure (PKI, code-signing certificates, HSM or KMS subscriptions)
FDA submission user fee + cybersecurity-related rework if AI letters arrive
QMS integration work - design controls, V&V evidence, traceability tooling
Cyber insurance / D&O coverage adjustments tied to product launch

What to skip: Full-time CISO before you have postmarket scale - fractional or external is enough.

Investor narrative

“Our cybersecurity package is reviewer-ready. Submission risk is contained. This removes a major Series B objection 18 months early.”

Series B

$20M - $60M

typical raise

Cybersecurity budget

$200K - $1.2M / year

1 - 2% of raise (now operational, not project)

0%of raise5%

Where the money goes

~40% first in-house hire (PSIRT lead)
~20% monitoring tooling
~20% recurring testing and per-release retests
~20% consulting and external surge capacity

Round focus: Commercialization, postmarket scale-up, additional indications, EU + global expansion.

What to buy

Operational PSIRT (in-house lead + external surge capacity)
Continuous SBOM monitoring + VEX program
Annual third-party pen test + targeted retests on releases
EU MDR cybersecurity package (harmonized with FDA)
Customer-facing security documentation, CISA coordination capability
Tabletop exercises and incident response readiness

What this budget covers

Salaries: PSIRT lead, security engineer(s), fractional CISO
Annual third-party pen test + per-release retests + EU MDR-aligned testing
Continuous tooling: SBOM/VEX platform, vuln intel feeds, secrets management, DAST, EDR for cloud
Patch development and hotfix engineering for postmarket vulnerabilities (the real operational cost)
Customer security documentation: MDS², SOC 2 (if cloud), HITRUST or ISO 27001 if hospital procurement asks
Incident response retainer + tabletop exercises
EU MDR conformity assessment cyber evidence (Notified Body fees)

What to skip: Don't over-tool. Process maturity beats SaaS subscriptions.

Investor narrative

“We have a postmarket cybersecurity program with measurable SLAs and a track record of advisories - hospital procurement teams trust us.”

Series C+ / Growth

$60M+

typical raise

Cybersecurity budget

$1.5M - $5M+ / year

1 - 1.5% of annual opex

0%of annual opex5%

Where the money goes

~50 - 60% product security org (salaries)
~20% platforms and tooling
~15% audit and certification fees (SOC 2, HITRUST, CRA)
~10% testing and bug bounty payouts

Round focus: Multi-product portfolio, international, acquisitions, IPO-readiness.

What to buy

Full-time CISO + product security org
M&A cybersecurity due diligence capability
Continuous compliance program (FDA, EU MDR, CRA, HITRUST, SOC 2 where relevant)
Threat intelligence feeds + ML-specific monitoring for AI-enabled SaMD
Bug bounty program (researcher-facing maturity)

What this budget covers

Full product security org (CISO + AppSec + ProductSec + GRC)
Multi-product CI/CD security platform (SAST/DAST/SCA across portfolio, signed pipelines)
Continuous compliance audits (FDA, EU MDR, CRA, HITRUST, SOC 2)
Bug bounty payouts + triage + remediation engineering
M&A due diligence (security review of acquisition targets)
Threat intelligence subscriptions, ML-specific monitoring, security data lake
Incident response and breach insurance

What to skip: Vanity certifications that don't match your customer ask.

Investor narrative

“We're an acquirer's dream - clean security posture, documented program, no skeletons in the SBOM.”

Where Blue Goat fits

Senior medical device security - sized to your stage

We work with founders from architecture through IPO. Our engagement model scales with your round so you're never overpaying for capability you don't need yet - or underspending and accumulating regulatory debt.

Pre-Seed / Seed

Architecture + strategy partner

Threat-model workshops, Pre-Sub cybersecurity memos, technology choice reviews, lightweight pen tests.

Series A

FDA submission cybersecurity lead

Full eSTAR-ready package: SPDF documentation, STRIDE threat model, CycloneDX SBOM + VEX, manual penetration testing, postmarket plan, reviewer-letter response.

Series B

Postmarket program builder

CVD program stand-up, EU MDR harmonization, MDS² + customer security documentation, surge PSIRT capacity.

Series C+

Strategic security advisor

Fractional CISO support, M&A diligence, multi-product cybersecurity governance, IPO readiness.

Real numbers: we've contributed cybersecurity work to 275+ devices supported across 510(k), De Novo, PMA, and IDE pathways with a no client failing to clear because of cybersecurity. Most of those companies brought us in between Pre-Seed and Series A.

Five budget rules

How to spend (and not spend) your cybersecurity dollars

Rule 1
Budget cyber as a % of the raise, not a line item afterthought
At Pre-Seed through Series A, plan on 2-5% of the round going to cybersecurity. It's the cheapest insurance against a 6-month FDA deficiency loop later.
Rule 2
Front-load architecture decisions
A $20K threat model in Pre-Seed prevents a $400K firmware re-architecture in Series A. Bring security into the room when you're picking your OS, your radio, and your cloud stack.
Rule 3
Use the FDA's Pre-Sub program - it's free
A Q-Sub with cybersecurity scope returns written FDA feedback in ~75 days. It's the highest-leverage spend in the entire fundraising lifecycle, because it's $0.
Rule 4
Buy outcomes, not headcount, until Series B
Hire fractional or contract security expertise tied to specific deliverables (threat model, pen test, SBOM, CVD policy). A full-time security hire pre-revenue is usually premature.
Rule 5
Don't double-pay for FDA + EU evidence
If you're targeting FDA + CE, design one harmonized evidence package - same SBOM, same threat model, two filings. Saves 4-6 months of duplicated work.

Talking to investors

How to position cybersecurity in the deck

Investors don't want to hear about pen tests. They want to hear about regulatory risk reduction and commercial readiness. Frame cyber spend in those terms:

Don't say

“We're spending $300K on a penetration test and SBOM tooling.”

Say

“We're investing 3% of the round in an FDA-ready cybersecurity package - the same package that's now mandatory under the 2026 final guidance - to remove submission risk and make us procurement-ready for the top 50 hospital systems on day one.”

Go deeper

Related resources

Regulatory Strategy: FDA Pathways & Device Classes

FDA 2026 Premarket Cybersecurity Guidance Decoder

Postmarket VDP & CVD Program Blueprint

EU MDR & IVDR Cybersecurity Guide

Budgeting cybersecurity is one line in a much bigger launch plan. For the wider startup path - idea validation, regulatory strategy, clinical, reimbursement, and commercialization - medtechlaunchguide.com is a free founder playbook we sponsor.

Raising right now?

Get a stage-appropriate cybersecurity budget for your raise.

30 minutes with a senior medical device security engineer. We'll size the right cyber line item for your round, your device class, and your timeline.

Book a budget review See pathways & classes

How much cybersecurity budget to put in your raise.

Allocate 2-5% of every round to cybersecurity through Series A.

Every stage on one page

What actually drives the cost

Estimate your budget from what actually drives it

Three product archetypes, stage by stage

Device-only

App plus cloud

Multi-interface ecosystem

Sources and assumptions

Pre-Seed

Seed

Series A

Series B

Series C+ / Growth

Glossary of terms and assumptions

Calculator inputs

Budget and finance terms

Regulatory and standards

Deliverables and artifacts

What to budget - and what to actually buy - at each stage

What to buy

What to buy

What to buy

What to buy

What to buy

Senior medical device security - sized to your stage

Architecture + strategy partner

FDA submission cybersecurity lead

Postmarket program builder

Strategic security advisor

How to spend (and not spend) your cybersecurity dollars

Budget cyber as a % of the raise, not a line item afterthought

Front-load architecture decisions

Use the FDA's Pre-Sub program - it's free

Buy outcomes, not headcount, until Series B

Don't double-pay for FDA + EU evidence

How to position cybersecurity in the deck

Related resources

Get a stage-appropriate cybersecurity budget for your raise.