Startup KPIs investors check
The metrics that come up in almost every diligence process, with the formula for each and the threshold investors use. Thresholds are industry rules of thumb, not guarantees — see the venture benchmarks page for sourced figures.
Short answer
Investors focus on four groups of KPIs: growth (MRR/ARR, growth rate, net revenue retention), unit economics (CAC, LTV:CAC of 3:1 or better, CAC payback under 12 months, gross margin), cash efficiency (burn, runway of 18–24 months, burn multiple below 1.5) and retention (churn and cohort curves).
01
Growth
How fast the company is getting bigger, and whether that growth is real.
Monthly recurring revenue (MRR) and ARR
Recurring revenue from active contracts, excluding one-off fees. ARR = MRR × 12.
Investors reconcile it to bank statements; revenue that appears only in the model is a red flag.
Growth rate
Month-over-month or year-over-year change in revenue. Rule of thumb for seed-stage SaaS: 15–20% month over month is strong.
Check growth from new customers separately from price rises or one large contract.
Net revenue retention (NRR)
Revenue this year from last year's customers, divided by their revenue last year. Above 100% means expansion outweighs churn.
Best-in-class B2B SaaS is commonly cited at 120% or more.
02
Unit economics
Whether each customer is worth more than they cost to win and serve.
Customer acquisition cost (CAC)
Total sales and marketing spend in a period divided by new customers won in that period.
LTV to CAC ratio
Lifetime gross profit per customer divided by CAC. 3:1 or better is the usual target.
CAC payback period
Months of gross profit needed to recover CAC. Under 12 months is strong; over 24 is a concern for most SaaS.
Gross margin
Revenue minus direct cost of delivery, as a percentage. Software businesses typically run 70–80%+.
03
Cash and efficiency
How long the money lasts and how much growth it buys.
Burn rate
Net cash spent per month (cash out minus cash in).
Runway
Cash in the bank divided by monthly net burn. Aim for 18–24 months after a raise; start raising with 9–12 months left.
Burn multiple
Net burn divided by net new ARR. Below 1.5 is efficient; above 3 suggests growth is being bought expensively.
Rule of 40
Growth rate plus profit margin. A combined 40% or more is the common bar for later-stage software.
04
Retention and engagement
Whether customers stay, which is what makes growth compound.
Logo churn and revenue churn
Share of customers, and of revenue, lost each period. Measure both: losing small customers and losing large ones tell different stories.
Cohort retention
Of customers who joined in a given month, how many are still active months later. Investors want a raw, filterable export, not a slide.
Active usage (DAU/MAU)
Daily active users divided by monthly active users, a gauge of how habitual the product is for consumer and workflow apps.
Next step
Put it to work on a real deal
Use the free tools and references, or run a cited AI analysis on your own opportunity.