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We work closely with our portfolio companies to refine their metrics, inherently unique to each business.  That said, we see common patterns and common metrics useful for any business. Feel free to use the resources below to add new metrics or double check your current tracking methods if needed.

It’s most important to demonstrate that you’ve made progress towards reducing these 5 risks:

  • Technical Risk – does the technology work?
  • Market Risk – will people pay for this?
  • Business Model Risk – are unit economics profitable and sustanable?
  • Execution Risk – can you accomplish hard things?
  • Fundraising Risk – will you be able to raise more funds?

Your focus here is to show that you’ve de-risked these 5 facets. This looks different for every company, but examples of how to do so include accomplishing key technical milestones or signing LOIs, pilots, or contracts.

Useful Readings, by Business Model

These Y Combinator, Andreesen Horowitz, and Sequoia articles are great places to start: they have key metrics across a number of different business models. Founders Collective talks growth metrics, and Startup Action has good templates for marketplaces, subscription business models, and growth hacking. Below, we have collected articles to help define specific metrics for business models we see frequently.

SaaS Metrics

Marketplace Metrics

E-Commerce Metrics

Common Operating Metrics

Average Revenue Per Account / User

The average value per customer at a given period. ARPA is more common for SaaS and FinTech businesses, ARPU is slightly more broad.

ARPA = ∑ (all customers’ monthly recurring revenue) / # of customers.

ARPU = ∑ (total revenue) / # of users.

Customer Acquisition Cost (CAC)

CAC is an estimate of the cost to acquire a customer. It does not include other fixed or variable costs of the business. 

CAC = ∑ (all sales & marketing expenses) / (# of new customers).


Churn is a measurement of how many customers are not renewing business or cancelling their subscriptions (if a SaaS business).

Churn = 1 – “retention rate” (# of new users / # total users last period).

Customer Lifetime Value (LTV)

Estimate of the average total value of a customer over their lifetime (from signup to churn). CAC / LTV is also important to track, here are two good rules of thumb:

  1. LTV / CAC target > 3x.
  2. Target months to recover CAC < 12.

LTV = ARPA x Gross Margin % / Churn Rate.

Common Financial Metrics

We believe that a successful company should be able to grow without sacrificing its financial performance. That’s why it is important to look at financial metrics as well.

Financial Statements

  • Balance Sheet: it is a snapshot, representing the state of a company’s finances (what it owns and owes) as of the date of publication.
  • P&L: Financial statement that summarizes revenues, costs, and expenses incurred during a specified period.
  • Cash Flow Statement: it includes cash made by the business through operations, investment, and financing—the sum of which is called net cash flow.

Gross Margin

The higher this number is, the more resources a company retains on each dollar of sales, which it can then use to pay other costs or obligations. 

Gross Margin= Total Revenue – Cost of Goods Sold

Working Capital Ratio

Also referred as current ratio is basically the assets a company has, so this ratio indicates whether a company has enough assets to cover any standing or potential liabilities. 

WC Ratio = Current Assets / Current Liabilities 

A healthy ratio should be => 2.0 x

Environmental Social Governance Investments

There are different ways by which investors align their investments with their values. We believe in Environmental Social Governance (ESG) investing. With this philosophy, we examine several aspects of potential investments that are not necessarily shown on their financials or operating KPIs.


This component involves the company’s impact on Earth, in both positive and negative ways. Some of the main topics to analyze in this section include:

  • Carbon footprint and renewable energy usage.
  • Water-related issues and goals, such as usage, conservation, and waste disposal, recycling practices.
  • Green products, technologies, and infrastructure.
  • Environmental benefits for employees such as cycling programs and environmental-based incentives.


This component consists of people-related matters such as:

  • Employee treatment, pay, benefits, engagement and staff turnover.
  • Employee training, development and safety policies.
  • Diversity and inclusion in hiring and in awarding advancement opportunities and raises.
  • Consumer friendliness, customer service responsiveness.


Everything related to the board of directors and how shareholder-friendly vs. management-centric the company is. This looks deeper into how the business is run, and whether the corporate incentives align with the business’s success.

  • Executive compensation, bonuses, and perks.
  • Diversity of the board of directors and management team, and whether the board is qualified.
  • Whether chairman and CEO roles are separate.
  • Transparency in communicating with shareholders.