Venture benchmarks investors actually use
Most benchmark pages blur two very different things: figures a named publication reports, and conventions the industry repeats. This page keeps them apart. Quote either one freely — a link back to this page is all we ask.
Sourced figures are quoted from the linked publication and dated. Rules of thumb are widely used industry conventions with no single authoritative source, and are labelled separately so nobody cites them as data.
01
Why startups fail
Failure analysis is the most useful benchmark set in diligence, because it tells you which risks actually kill companies rather than which ones are easiest to write about.
35% of post-mortems
No market need
Cited as a contributing reason in an analysis of 111 startup failure post-mortems — the most common single factor.
CB Insights, The Top 12 Reasons Startups Fail (2021)38% of post-mortems
Ran out of cash or failed to raise new capital
The most frequently cited factor overall in the same analysis, usually downstream of a demand or unit-economics problem rather than independent of it.
CB Insights, The Top 12 Reasons Startups Fail (2021)18% of post-mortems
Team problems
Founder disputes, wrong hires and missing capability. This is why founder-market fit and governance sit inside the diligence workstreams rather than beside them.
CB Insights, The Top 12 Reasons Startups Fail (2021)
Cause of death versus cause on the certificate
Treat "ran out of cash" as a symptom and look one step upstream for the demand, pricing or delivery problem that consumed the cash.
Two companies with identical burn fail for different reasons; only the upstream cause is diligenceable before the fact.
02
Unit economics
The thresholds below are the ones investors quote in committee. They are conventions, not measurements, so we label them as such — and they only mean anything once the inputs behind them are verified.
CAC payback
Under 12 months is strong for SMB, under 18-24 months is acceptable for enterprise.
Payback is the closest single number to capital efficiency, and it is computed on gross profit rather than revenue.
LTV to CAC
3x or better, with LTV built from gross margin and observed retention, not list price.
Almost every inflated LTV:CAC comes from using revenue instead of gross profit, or an assumed churn rate.
Net revenue retention
Above 100% signals expansion; below 90% means growth is a treadmill.
NRR determines whether new sales compound or merely replace churn.
Gross margin
70%+ for software; materially lower means the business is partly a services or hardware business.
Margin sets the ceiling on how much can be spent to acquire a customer.
Burn multiple
Net burn divided by net new ARR: under 1.5x is efficient, above 3x needs an explanation.
It normalises efficiency across stages better than growth rate alone.
03
Funding and dilution
Round sizes move with the cycle, so treat any single number as perishable. The structural conventions below move much more slowly.
Dilution per priced round
15-25% is the normal band; a seed round is usually planned around 20%.
Sizing the round from the milestone rather than from a valuation keeps dilution inside the band.
Option pool
10-15% created or topped up at each round, typically pre-money and therefore founder-diluting.
The pool is frequently the largest unnoticed component of a term sheet's real dilution.
Runway raised
18-24 months of runway per round, with the raise starting at 9-12 months remaining.
Fundraising takes a quarter or more; starting below six months converts a negotiation into a rescue.
Milestone coverage
A round should fund the specific evidence the next investor needs, plus a margin for it arriving late.
Rounds sized to a valuation instead of a milestone tend to end one proof point short.
04
Market sizing
There is no benchmark for a correct market size — only a correct method. These are the checks we apply to every number the platform accepts.
Direction of construction
Build bottom-up from buyer counts and prices; reject any figure derived as a percentage of a headline market.
Top-down sizing cannot be falsified, so it carries no information for a committee.
SOM horizon
Derive SOM from channel capacity over a stated period, usually three years, not from an aspirational share.
Capacity is checkable: reps, conversion rates, pipeline coverage.
Label every input
Each input is verified, estimated or assumed, and the weakest label caps the confidence of the output.
One assumed conversion rate can dominate a market size built from otherwise solid data.
Apply them
Run these thresholds against a real deal
The calculators use the same conventions listed above, and the guides explain the method behind each one.