MOST WANTED STARTUP METRICS

FOR INVESTORS & LIMITED PARTNERS

Fundraising is a complicated process, but having key metrics to present the attractiveness of the startup at hand is already a big step.

  • What are these metrics?
  • How can you calculate them?
  • What exactly do they indicate?

These are some most common questions startup founders are confronted with.

However, to answer these questions, a founder needs to understand an investors’ goals. A startup will gain the investor’s trust by providing metrics that are valuable to them. Moreover, it is crucial to see how investors’ mood is evolving. By checking the European Venture Sentiment Index report quarterly, you will be up to date with the latest developments in the investors’ world.

In this article, we will have a look at metrics that are interesting for investors. We will point out their practical value and will show how to calculate them.

TOP 10 METRICS TO IMPRESS INVESTORS

1)ย Cash-on cash multiple

2) Return on equity (ROE)

3) Levered free cash flow (LFCF)

4) Customer aquisition cost (CAC)

5) Customer lifetime value (CLTV)

6) Customer churn rateย 

7) Lead velocity rate (LVR)

8) Revenue growth rateย 

9) Annual recurring revenue (ARR)

10) Environmental, social, and governance (ESG) metrics

Finally, there are three general things to keep in mind.

  • First, you should find out your investorsโ€™ goals. This will enable you to provide them with the most valuable and meaningful metrics to him.
  • Second, you should be able to justify the numbers and include them in your pitch.
  • And last but not least, don’t forget to provide information about your industry averages or a specific peer group, if possible, to set the numbers in the right context.
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