First, prepare an image: you’ll need to make it square. Optionally, you can also resize it to the sides of power of 2, with the 512 pixels maximum.
Now, open VTFEdit. Import the image (File > Import).
Make sure that the following options are checked out in General:
Enable Resize and Clamp. Set maximum width and height to 512. Don’t generate Mipmaps and Normal Maps. Leave everything else as-is.
After importing, check the following flags in the bottom-left pane:
Leave every other flag unchecked.
If you’re wondering why transparent regions of your image are black, check View > Mask.
That’s it. Save the spray as a .vtf file (File > Save As…) and generate the .vmt file (Tools > Create VMT File). Drop these two files in the .../materials/vgui/logos directory in your game folder.
Make sure your spray doesn’t surpass the 512 Kb limit. Otherwise, it will be invisible in the game.
Choose the .vtf file as a new spray in the game.