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

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1 MRR /
ARR

MRR ARR

Monthly Annual
Recurring Recurring
Revenue Revenue

Josh Aharonoff

Top 10 VC Metrics - MRR & ARR 5

The key
word here is

RECURRING

Setup fees are not

included, as they
are not recurring

Josh Aharonoff

Top 10 VC Metrics - MRR & ARR 6

Investors love
startups with recurring
revenue

high predictability

low churn

Josh Aharonoff

Top 10 VC Metrics - MRR & ARR 7

 2
ACV /
ARPU
Josh Aharonoff Swipe

8
2 ACV /
ARPU

ACV ARPU

Average Average
Contract Revenue
Value per User

Josh Aharonoff

Top 10 VC Metrics - ACV / ARPU 9

 ACV
Is more common
for B2B startups

ARPU
is more common
for B2C startups

Josh Aharonoff

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

Josh Aharonoff

Top 10 VC Metrics - LTV 16

 5
CAC
Payback
Josh Aharonoff Swipe

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

Josh Aharonoff

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

Josh Aharonoff Swipe

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

Josh Aharonoff

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

Josh Aharonoff

Top 10 VC Metrics - Net Dollar Retention 24

 8
Cash
Burn
Josh Aharonoff Swipe

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

Josh Aharonoff Swipe

28
9 Expansion /
Contraction

Expansion /
Contraction is
a measure of
incremental
bookings from
existing
customers

Josh Aharonoff

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

Josh Aharonoff

Top 10 VC Metrics - Expansion / Contraction 30

 10
Sales Quota
Attainment

Josh Aharonoff Swipe

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

Thanks for
reading!
Did you enjoy this content?
Do you have anything to add?
Questions?

34
 Author

Josh
Aharonoff

I help startups Scale their Finance &

Accounting with amazing reporting
& financial operations

Find out why over 40 startups

trust me each month:

https://www.mightydigits.com/book-meeting

+ Follow me on Linkedin for more Startup Finance & Accounting tips

Josh Aharonoff

Top 10 VC Metrics 35