This is a major milestone for any SaaS startup, by this stage you’ve proven your product works, found some product-market fit, and built a small (but active) customer base. Now, it’s time to scale – so let’s be savvy about it. Series A investors want clear, data-backed signals that your company is ready to grow efficiently and sustainably, and they want more than just a promising product – so you need to show them that you’re built to last.
You’ll now be focused on understanding and optimising key performance metrics that resonate with investors, so let’s get stuck into the metrics that matter now and remember – we can help! In case you missed them, check out articles 1 & 2 in the series for the earlier metrics you need.
And a reminder of each stage of the journey in a handy pic, here 👇:
Logo Retention
Hello, anyone there? Are you keeping your customers? An easy metric to check, but a vital one, logo retention measures the percentage of customers who stick with your product over time, and that’s exactly what we want. High logo retention is a sign of product-market fit and customer satisfaction, and series A investors look for evidence that you’re not only acquiring customers, but also keeping them.
How to calculate:
- No. of the same customers retained from prior period
Benchmark:
- 85-95%
Extra tips:
- The prior period when you’re first starting is typically monthly, but as the business evolves you typically change to quarterly reporting, so just make sure you’re comparing to the cohort as at the end of the prior quarter
Dollar Retention
Put super simply, dollar retention (net or gross) is how much revenue you keep from existing customers over a given period, including or excluding upgrades, downgrades, and churn. We’re now digging that little bit deeper, showing how much recurring revenue is retained or expanded from your existing customer base.
How to calculate:
- gross = 1 – churned + downgraded ARR / previous months total ARR
- net = 1 + expansion – churned – downgraded ARR / previous months total ARR
Benchmark:
- Gross: 85-95%
- Net: 100-250%+
Extra tips:
- So the Gross Dollar Retention (GDR) is the % of $ value you retain from existing customer (which is why it can never be more than 100%) and it really highlights any underlying problems (product / market fit or service) whereas the net dollar retention (NDR) also takes into consideration any expansion for those customers.
ARR Growth
You’ll already know that Annual Recurring Revenue (ARR) growth is a direct indicator of momentum, and vitally you’ll want to show steady and predictable ARR growth so that investors can see you’ve moved beyond early experimentation and are building a repeatable sales motion.
How to calculate:
- ARR = MRR * 12
Benchmark:
- 80-100%+
Extra tips:
- You’ll sometimes hear the adage of ‘triple, triple, double, double, double’ (T2D3) which is the gold standard for investors who are essentially looking to back a company that is going to grow to be a unicorn ($1 billion valuation). In practice, extremely rare, but it doesn’t stop VCs looking for this. Careful of growth at all costs though and balance this against other retention and, increasingly, profit metrics
Lifetime Value (LTV)
LTV estimates how much profit a customer will generate over their lifetime with the company, so let’s hope it’s a long one! This metric tells investors how valuable your customers are and helps in understanding long-term unit economics. A high LTV (especially when paired with strong retention) shows how much profit, over time, you can expect to make from a customer.
How to calculate:
- Here’s an interesting one (at least to the geek in me):
- LTV = average (lifetime) profit per customer / churn rate
Benchmark:
- LTV:CAC > = 3
Extra tips:
- Why is it (technically) interesting to me is because it really highlights the compounding interrelationship between losing customers, and the erosion of your profits over time
- The LTV to CAC ratio is looked at by investors because often, in essence, that’s what they’re funding – the gap between what it costs to acquire a customer, and the ultimate long term profit that can be generated from them
- LTV is sometimes also (erroneously) calculated as lifetime revenue. This is also an interesting number, along with Average Contract Value (ACV)
CAC Payback
It’s payback time – this metric looks at how long it actually takes to recover the cost of acquiring a customer, calculated through the gross profit generated from that customer.
This metric measures how long it takes to recoup the cost of acquiring a new customer, and startups with strong CAC payback often attract more favourable investor terms.
How to calculate:
- CAC / MRR * recurring gross margin
Benchmark:
- 12-18 months
Extra tips:
- Like LTV, this is interesting to investors because it adds the time dimension of how long the CAC needs to be covered before being paid back – the shorter the better, if you think about time value of money
- Remember too, in early stage high growth situations, you are rapidly acquiring customers, incurring more and more CAC that, compoundingly, needs to be covered until, cumulatively, over time you start to turn a profit. It’s a bit like working capital and, if you’re not carefully watching – and funding – this high growth can actually cause you to run out of money
What’s next?
Series A isn’t just about validating the business, but about proving it can scale. It’s time to shift from tactical execution to strategic planning: building scalable go-to-market teams, expanding product capabilities, and deepening customer insights. Investors want to know if you and your team can take your promising early product and grow into a genuine market leader. Aligning these core metrics with a compelling vision for growth is what sets standout series A pitches apart, so for help with this as always – get in touch to discuss any stage of your cap raising journey – in case you didn’t realise by now, we LOVE metrics and we can help you get where you need to be.
