10
Top
VC Metrics
Josh Aharonoff
Helping Founders Scale with Proper
Finance & Accounting
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About
this guide
In this guide
you’ll learn about the 10 most
common metrics that VCs
analyze with startups, and how
to calculate them
Josh Aharonoff
Top 10 VC Metrics 2
Contents
1 MRR / ARR 4
2 ACV / ARPU 8
3 CAC 11
4 LTV 14
5 CAC Payback 17
6 Churn 19
7 Net Dollar Retention 22
8 Cash Burn 25
9 Expansion / Contraction 28
10 Sales Quota Attainment 31
Josh Aharonoff
Top 10 VC Metrics 3
1
MRR /
ARR
Josh Aharonoff Swipe
4
1 MRR /
ARR
MRR ARR
Monthly Annual
Recurring Recurring
Revenue Revenue
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Top 10 VC Metrics - MRR & ARR 5
The key
word here is
RECURRING
Setup fees are not
included, as they
are not recurring
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Top 10 VC Metrics - MRR & ARR 6
Investors love
startups with recurring
revenue
high predictability
low churn
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Top 10 VC Metrics - MRR & ARR 7
2
ACV /
ARPU
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8
2 ACV /
ARPU
ACV ARPU
Average Average
Contract Revenue
Value per User
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Top 10 VC Metrics - ACV / ARPU 9
ACV
Is more common
for B2B startups
ARPU
is more common
for B2C startups
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Top 10 VC Metrics - ACV / ARPU 10
3
CAC
Josh Aharonoff Swipe
11
3 CAC
CAC
Customer
Acquisition
Cost
Josh Aharonoff
Top 10 VC Metrics - CAC 12
& M arketing
Sales
Exp ens e
new u ser s
acquire d
This shows how much it costs
to acquire a new customer
This is a very popular metric!
Josh Aharonoff
Top 10 VC Metrics - CAC 13
4
LTV
Josh Aharonoff Swipe
14
4 LTV
LTV
Lifetime
Value
Josh Aharonoff
Top 10 VC Metrics - LTV 15
This reflects the average
amount that you can expect
from a customer over their
lifetime.
This can be challenging to
calculate in the early stages
of monetization, since there
is little data to support the
calculation.
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
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Top 10 VC Metrics - LTV 16
5
CAC
Payback
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17
CAC
New MRR
This shows how long it
takes to make back the money
that you invested to acquire
a new customer
Josh Aharonoff
Top 10 VC Metrics - CAC Payback 18
6
Churn
Josh Aharonoff Swipe
19
6 Churn
Churn reflects
The amount of lost
bookings, or users, who
were once active
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Top 10 VC Metrics - Churn 20
Lost MRR / ARR
ning MRR / ARR
Ope
Churn is the antithesis to growth, and
must be monitored regularly!
EX.
lost $40,000 for an existing
recurring customer contract
Josh Aharonoff
Top 10 VC Metrics - Churn 21
7
Net Dollar
Retention
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22
7 Net Dollar
Retention
M RR / AR R fo r a
Ending / co h ort
cific cu sto m er
spe
ning MRR / ARR
Ope
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Top 10 VC Metrics - Net Dollar Retention 23
Net Dollar Retention helps a
company understand how
much contract value is being
retained over a specific period
of time
A Net Dollar Retention greater
than 100% means that
customers have expanded
their contract value, while a
Net Dollar Retention less than
100% means they have
contracted, or churned
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Top 10 VC Metrics - Net Dollar Retention 24
8
Cash
Burn
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25
8 Cash
Burn
fr om operating
Cash
activit ies
f ro m investing
Cas h
activ iti es
ncing activit)
ies
(not fina
Josh Aharonoff
Top 10 VC Metrics - Cash Burn 26
Cash burn reflects the net
amount of money you are
consuming to operate your
business
It does NOT reflect activity
from financing events, like
fundraising, or debt
Josh Aharonoff
Top 10 VC Metrics - Cash Burn 27
9
Expansion /
Contraction
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28
9 Expansion /
Contraction
Expansion /
Contraction is
a measure of
incremental
bookings from
existing
customers
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Top 10 VC Metrics - Expansion / Contraction 29
Expansion
Increased MRR / ARR bookings
from existing customers
Opening MRR / ARR
Contraction
Decrease d M R R / ARR bookings
from existing customers
Opening MRR / ARR
Expansion MRR / ARR is often times an
important strategy in “Land & Expand”
campaigns
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Top 10 VC Metrics - Expansion / Contraction 30
10
Sales Quota
Attainment
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31
10 Sales Quota
Attainment
fr om a sa les rep
Bo ok in gs
up of s ale s r ep s
or gro
a for the period
Quot
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Top 10 VC Metrics - Sales Quota Attainment 32
Sales reps are a common
method for acquiring
customers with B2B SaaS
Sales Quota
Attainment shows
how well these sales
reps are performing
against their quota.
$ 800k
Sales Reps $1M Annual Quota
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Top 10 VC Metrics - Sales Quota Attainment 33
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Author
Josh
Aharonoff
I help startups Scale their Finance &
Accounting with amazing reporting
& financial operations
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