In my experience, about 66-70% of the time this is bad advice, especially if it is coming from a Very Large VC.
You pretty much know how much to spend already. Often, first-time founders, especially those who had to bootstrap a long-time to get to venture capital, don’t spend the capital they do raise quickly enough. It takes them too long to get comfortable expanding the time horizon on the ROI they are investing.
Most of the first-time founders I’ve invested in aren’t “spending enough” in that they are a bit too slow to make accretive hires.
But … so what.
Every SaaS founder I know, at least as they approach $6m, $8m ARR or so … they figure it out. How to invest $X to get $Y out. They don’t know at first, but they learn, as they cross 50, 100, 200 customers.
Pushing them to learn this quicker does no good IMHO.
Furthermore, sometimes, Big Funds that want to invest more in you (to own more) won’t worry too much about your burn rate and Zero Cash Date. But you should worry more than they do.
So mostly, in my experience, this advice is at often at least a little wrong or self-interested. And importantly, even where it is right … better to let the founders figure it out on their own, IMHO.
The best version of this advice is to help founders learn where to make certain hires faster. Point that out, and where the ROI can be on a great VP of Marketing, on expanding the Customer Success team, and putting a few more sales people on a new but expanding segment of sales. And see where it goes. Don’t tell them to spend more.