AWS credits: Your startup’s first cloud investment – not free money

If you’re a startup building on AWS, free credits can feel like rocket fuel. Through the AWS Activate program, over 280,000 startups have received more than $6 billion in AWS credits to build and scale their products.

But Activate isn’t the only path. Credits can also be granted through AWS partner programs, startup accelerators, or direct collaboration with AWS-certified partners like TIDORA

AWS credits can be applied toward most AWS services – including compute (EC2, Lambda), databases (RDS, DynamoDB), storage (S3), containers (ECS, EKS), networking, and analytics (Athena, Glue). They generally exclude Marketplace purchases and some third-party or premium services, but for early-stage teams, that still covers nearly everything needed to run production workloads for months without paying a cent.

If you’re just getting started with AWS and want to set things up correctly from day one, check out TIDORA’s blog post – “From Zero to Cloud Hero” It’s a practical guide for founders and engineers on how to build on AWS efficiently before scaling or applying for credits.

When those credits run out – whether by time limit or simply by usage – the “free” infrastructure suddenly becomes a line item on your burn report. For startups on the larger Portfolio tier, this can happen within 12 months, while smaller Founders grants may last up to 2 years if used sparingly. But once your workloads ramp up, credits are often exhausted long before they technically expire. What once felt like a growth accelerator can quickly turn into a financial shock.

AWS credits aren’t just perks. They’re seed capital for your infrastructure, and how you use them determines how long your runway lasts.

‍The pain – free AWS credits build hidden debt

Without cost visibility, AWS credits can vanish quickly. Test environments, temporary analytics jobs, and forgotten container workloads all contribute to silent overspending. Building good habits early – like tagging resources and setting budgets – helps you get the most value out of your credits.

AWS Activate offers two tiers:

• Activate Founders: up to $1,000 in AWS credits for self-funded startups.
  
  
• Activate Portfolio: up to $100,000 in credits for startups backed by accelerators or investors.
  

Those numbers sound big – but without cost visibility, they evaporate quickly. Gartner found that 80 % of organizations worldwide overspend their cloud budgets because they lack a strategy for optimization (Crayon citing Gartner).

Many startups don’t realize the trap: habits formed under credits - like over-provisioning or skipping cost alerts – carry over once the “free period” ends.

‍The consequence – when the meter starts running

According to Flexera’s 2022 State of the Cloud Report, organizations waste an estimated 32 % of their cloud spend, up from 30 % the previous year (Flexera).That’s a third of your potential runway lost to idle resources, oversized instances, and poor monitoring.

Startups often don’t account for:

• Data egress charges when transferring data out of S3, CloudFront, or between regions.
• Over-provisioned EC2 instances running at 5% CPU all month.
  
• CloudWatch logs, metrics, and snapshots kept far longer than needed.
  

Without guardrails, cloud waste quietly eats into capital – long after credits are gone.‍

The solution – turn AWS credits into a cost strategy

AWS gives you the tools to make credits last – if you use them wisely.

Here’s how:

1. Set budgets and alerts early. Use AWS Budgets and Cost Anomaly Detection to track usage per service.
   
2. Automate shutdowns and scale-downs. Schedule dev/test environment stops with AWS Instance Scheduler.
3. Right-size your resources. Use AWS Compute Optimizer to analyze EC2 and EBS utilization.
4. Tag everything. Consistent tagging helps isolate waste by project, team, or feature.
5. Plan for expiration. Track your credit balance and begin cost forecasting at least 2–3 months before they run out.

Used strategically, AWS credits can fund critical milestones – from MVP launch to Series A scaling – without creating infrastructure debt. Need help navigating AWS Activate programs, credits, or optimization strategies?

TIDORA helps startups understand their AWS credit journey – from eligibility and activation to budgeting and usage forecasting.

Our team works directly with founders and CTOs to ensure credits are used strategically, not wasted.‍

The success – from “free” to financially smart

Startups that treat AWS credits as part of their capital structure see real benefits:

• They extend runway by months through active cloud spend optimization.
  
  
• Their infrastructure scales smoothly because budgets are baked in from the start.
  
  
• Investors view their cloud governance as a sign of maturity.
  

The difference between chaos and control often comes down to one mindset: credits aren’t gifts – they’re temporary funding that demands discipline.

Conclusion

AWS credits can kickstart your product journey, but they’re not free money. They’re an investment – one that pays off only when you manage it with the same rigor as your actual funding.

Track them, optimize them, and plan for what happens next. Your AWS bill – and your investors – will thank you.