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After investing in 20+ startups & helping many with fundraising, hereโs what actually matters in a Series A.
Everyone talks about user growth, but itโs not enough. Itโs not even close. When VCs look at Series A funding, they want more. They want real, actionable metrics that tell them your business is ready to scale. Here are the top five metrics VCs care about the most ๐
1. ๐๐๐ (๐๐ง๐ง๐ฎ๐๐ฅ ๐๐๐๐ฎ๐ซ๐ซ๐ข๐ง๐ ๐๐๐ฏ๐๐ง๐ฎ๐)
ARR is your bread and butter. It shows the stability and scalability of your model. Aim for strong, consistent growth here, and show that youโre not just making money, but youโre retaining it year after year. If you arenโt a SaaS business, for a marketplace business it will be GMV and GMV growth, for other businesses revenue or transactional revenue and its growth rate.
2. ๐๐ก๐ฎ๐ซ๐ง ๐๐๐ญ๐
How many customers are you losing? This is critical. A high churn rate sends a clear message: your product isnโt sticky enough. Investors want to see that customers love your product and stick with it.
If youโre not measuring churn, youโre not ready to raise.
3. ๐๐ฎ๐ฌ๐ญ๐จ๐ฆ๐๐ซ ๐๐๐ช๐ฎ๐ข๐ฌ๐ข๐ญ๐ข๐จ๐ง ๐๐จ๐ฌ๐ญ (๐๐๐) ๐ฏ๐ฌ. ๐๐ข๐๐๐ญ๐ข๐ฆ๐ ๐๐๐ฅ๐ฎ๐ (๐๐๐)
The ratio of how much it costs to acquire a customer versus the value they bring in is crucial. A 3:1 LTV to CAC ratio is generally considered healthy.
If youโre spending too much to get customers who donโt stick around, itโs a red flag.
4. ๐๐ฎ๐ซ๐ง ๐๐๐ญ๐
How fast are you burning through your cash? Investors want to know if you can efficiently manage your resources. If your burn rate is too high, you may not survive long enough to scale.
Keep your burn rate low and runway long to build investor confidence.
5. ๐๐๐ญ ๐๐๐ฏ๐๐ง๐ฎ๐ ๐๐๐ญ๐๐ง๐ญ๐ข๐จ๐ง (๐๐๐)
This measures how much revenue growth youโre driving from your existing customers. Are you upselling? Are customers buying more from you over time?
NRR above 100% is a strong signal to investors that youโre building a business that can grow without constantly acquiring new customers. These five metrics are non-negotiable. Series A isnโt just about showing potentialโitโs about proving it. VCs arenโt just betting on your vision. Theyโre betting on the numbers. Your job is to know these metrics inside out.
Fundraising is tough. But with the right focus, these metrics can give you the unfair advantage you need to close that Series A and take your start-up to the next level.