Every founder I work with sends me a metrics spreadsheet with 40+ tabs. Revenue by cohort. CAC by channel. Churn by segment. Feature usage. NPS trends.
VCs will ask for all of it. But only 7 metrics actually drive the investment decision.
ARR & Growth, NRR, Gross Margin, CAC Payback, Burn Multiple, Churn Analysis, Pipeline Velocity. Everything else is context.
The 7 Metrics That Matter
1. ARR and Growth Trajectory
What they’re looking for: Not just the number — the shape of the curve.
- Is growth accelerating or decelerating?
- What’s driving growth (new logos vs. expansion)?
- How does Q4 compare to Q1 last year?
How to present it: Show monthly ARR with a 3-month rolling average trendline. Highlight inflection points and explain what caused them. Deceleration isn’t fatal if you can explain it (e.g., “We slowed growth intentionally to improve unit economics”).
Red flag: “We’ll grow faster after we raise.” Past behavior predicts future behavior.
2. Net Revenue Retention (NRR)
What they’re looking for: Proof that your product creates compounding value.
- Above 120%: Strong product-market fit
- 100-120%: Acceptable, needs explanation
- Below 100%: Major concern
How to present it: Show trailing 12-month NRR by cohort. If recent cohorts show improving retention, highlight this. If you have expansion revenue, break out gross retention vs. expansion separately.
Red flag: NRR calculated on a trailing 3-month basis (hides churn timing).
3. Gross Margin
What they’re looking for: A software business, not a services business.
- 75%+: True software
- 65-75%: Acceptable with explanation
- Below 65%: Services or infrastructure-heavy
How to present it: Be honest about what’s in COGS. Professional services should be separate. If you’re below 70%, show the path to improvement with specific levers.
Red flag: Gross margin that includes revenue from one-time implementations.
4. CAC Payback Period
What they’re looking for: Evidence that you can acquire customers profitably.
- Under 12 months: Exceptional
- 12-18 months: Good
- 18-24 months: Acceptable for enterprise
- Over 24 months: Concerning
How to present it: Show fully-loaded CAC (marketing + sales + overhead allocated) divided by monthly gross profit per customer. Break it down by segment if your enterprise and SMB motions differ.
Red flag: CAC that excludes sales salaries or “brand marketing.”
5. Burn Multiple
What they’re looking for: Efficient growth.
Burn multiple = Net burn / Net new ARR
- Under 1.5x: Exceptional efficiency
- 1.5-2x: Good
- 2-3x: Acceptable if improving
- Over 3x: Burning too much
How to present it: Show quarterly burn multiple trending over time. If it’s improving, emphasize the trajectory. If it’s high, explain why (e.g., “We invested in platform before scaling sales”).
Red flag: Burn multiple that excludes one-time expenses that recur every quarter.
6. Churn Analysis (Logo vs. Revenue)
What they’re looking for: Understanding of why customers leave.
- What’s your logo churn vs. revenue churn?
- Is churn concentrated in any segment?
- What’s driving it?
How to present it: Show both logo and revenue churn by cohort. If you have low logo churn but high revenue churn, that’s a pricing problem. If you have high logo churn but low revenue churn, that’s a segment problem.
Red flag: “We don’t track why customers churn.”
7. Pipeline and Sales Velocity
What they’re looking for: Evidence of repeatability.
- What’s your pipeline coverage (pipeline / quota)?
- What are conversion rates by stage?
- What’s the average sales cycle?
How to present it: Show pipeline by stage with historical conversion rates. If you’re founder-led sales, show that you’ve documented the playbook and have a path to scaling.
Red flag: “Our pipeline is strong” with no stage breakdown or conversion data.
The Metrics They Ask About But Don’t Really Care About
These metrics come up in every diligence but rarely drive decisions:
- NPS/CSAT: Directionally useful, but easily gamed
- Feature usage: Interesting, but hard to compare across companies
- TAM: Everyone has a $50B TAM slide; no one believes them
- Competitive analysis: Useful for context, not for the decision
How to Structure Your Metrics Presentation
Lead with the story, not the spreadsheet.
Your metrics should answer a question: “Why will this company be 10x bigger in 5 years?”
Structure it as:
- Here’s where we are (ARR, growth)
- Here’s proof it’s working (NRR, margins)
- Here’s proof we can scale it (CAC payback, burn efficiency)
- Here’s what’s coming (pipeline, sales velocity)
Every metric should support the narrative. If a metric doesn’t fit the story, either fix the metric or change the story.
Part of the Series A Guide: