Metrics Investors Look For In Assessing A Startup

What metrics and thresholds do VCs look for when assessing a startup for investment, e.g., “What should our monthly churn rate be for Series X?“ 🤔

This is a very common concern for those seeking capital that leads to a host of different questions being asked in the venture capital space❗

Andrew Yeo from AirTree has written a great piece in which he explains why VCs generally consider signals of product-market fit (PMF) over hard thresholds for individual metrics 🔥

These are the red flags and positive signals that Andrew highlights for venture investment across stages:

Red Flags 🛑 🚩

– Low or inconsistent MRR growth

– High and/or increasing churn rate

– High and/or increasing CAC payback periods 

– High CAC compared to LTV 

– Low or declining Gross Margin %

Rocket Ship Signals 🚀🧑‍🚀

– High rate of ARR growth, 2x-3x+ YoY

– Low churn or positive net dollar retention

– Fast CAC paybacks

– Improving LTV/CAC

– High or increasing Gross Margin %

For details, read the article: https://lnkd.in/ga7cVETX

#raisingcapital#investors#metrics#whatvcslookfor#startups#b2bsaas#growth#productmarketfit#capitalraisingbrandelements#airtree#wholesaleinvestor

Click here to view the original Linkedin post.

Looking for a platform to raise capital? Click here to discover how Wholesale Investor can help you.