Blue Goat CyberBlue Goat CyberSMMedical Device Cybersecurity
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    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-roundWhere we fit5 budget rulesInvestor narrative
    The short answer

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

    For a connected Class II device, that means roughly $15–40K at Pre-Seed, $60–150K at Seed, $200–500K at Series A, then transitioning to 1–2% of operating budget 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.

    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%.

    Pre-Seed

    $250K – $1.5M

    typical raise

    Cybersecurity budget

    $15K – $40K

    3 – 5% of raise

    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

    Service-provider fees are only part of it. The full envelope includes:

    • 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.' Investors love hearing this; it signals a team that won't get killed by the FDA later.

    Seed

    $1.5M – $5M

    typical raise

    Cybersecurity budget

    $60K – $150K

    3 – 4% of raise

    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

    Service-provider fees are only part of it. The full envelope includes:

    • 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

    $200K – $500K

    2 – 3% of raise

    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

    Service-provider fees are only part of it. The full envelope includes:

    • 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 is what removes a major Series B objection 18 months early.

    Series B

    $20M – $60M

    typical raise

    Cybersecurity budget

    $500K – $1.5M / year

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

    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

    Service-provider fees are only part of it. The full envelope includes:

    • 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 operating budget

    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

    Service-provider fees are only part of it. The full envelope includes:

    • 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 250+ FDA submissions across 510(k), De Novo, and PMA pathways with a 100% submission success rate. 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

    1. 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.

    2. 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.

    3. 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.

    4. 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.

    5. 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

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